Chevron Corp.’s wholly owned subsidiary Chevron Canada Ltd. has reached agreement to sell a 30% interest in its Duvernay shale play to Kuwait Foreign Petroleum Exploration Co.’s wholly owned subsidiary, KUFPEC Canada Inc., for $1.5 billion, according to a press release. The total purchase price includes cash paid at closing as well as a carry of a portion of Chevron Canada’s share of the joint venture’s (JV’s) future capital costs. The Duvernay is located in west-central Alberta and is believed to be among the most promising shale opportunities in North America.

The agreement creates a partnership for appraisal and development of liquids-rich shale resources in about 330,000 net acres in the Kaybob area of the Duvernay.

Following the closing of the transaction, Chevron Canada will hold a 70% interest in the JV Duvernay acreage and will remain the operator. The transaction is expected to close in November 2014.

Chevron Canada has drilled 16 wells since beginning its exploration program, with initial well production rates of up to 212 Mcm/d (7.5 MMcf/d) of natural gas and 1,300 bbl/d of condensate. A pad drilling program recently commenced that is intended to further evaluate and optimize reservoir performance as well as reduce execution costs and cycle time.