Crescent Point Energy has agreed to acquire Royal Dutch Shell’s Kaybob Duvernay shale light oil assets in Alberta, Canada for $707m in a cash-cum-stock deal.

The consideration comprises $550m in cash and 50 million common shares of Crescent Point Energy.

According to the Canadian oil and gas company , the deal enables it to foray into a liquids rich play with more than 10 years of high-return, low risk drilling inventory.

The assets involved in the sale have production of nearly 30,000 barrel of oil equivalent per day (boe/d) from more than 270 wells. Out of this, 57% is condensate, 35% is shale gas, while 8% is natural gas liquids (NGL).

As part of the transaction, Crescent Point Energy will be transferred about 450,000 net acres in the Fox Creek (Kaybob) and Rocky Mountain House (Willesden Green) areas.

Crescent Point Energy president and CEO Craig Bryksa said: “The Acquisition is aligned with our core principles to focus on strategic initiatives that enhance our balance sheet strength and sustainability. It is expected to enhance our free cash flow generation, leverage ratios and ESG profile.

“The depth of high-return drilling inventory also provides optionality within our capital allocation framework. We view the Kaybob assets as low-risk given that they have been delineated over the past decade and key infrastructure and market access are already in place.”

Shell will look to bring various drilled and uncompleted wells into production before the closing of the deal in April 2021, which will be subject to regulatory approvals.

The move will boost the production from the Kaybob Duvernay assets to around 35,000boe/d during the second quarter of this year.

The deal is being executed by Shell’s affiliate Shell Canada Energy.

Shell upstream director Wael Sawan said: “Divesting these assets underpins Shell’s effort to focus the Upstream portfolio to deliver cash.

“While we believe these assets hold value, the divestment allows us to focus on our core Upstream positions like the Permian Basin, with integrated value chains, thereby building a resilient, lower-risk and less complex portfolio.”

Shell said that it will maintain its shale gas positions in the Groundbirch project in British Columbia and also its shale gas and liquids positions in the Gold Creek project in Alberta.