21-07-08 Shell Canada made official its bid to acquire Canadian exploration-and-production company Duvernay Oil in a deal valued at C$ 5.9 bn ($ 5.98 bn) including debt.
A wholly owned subsidiary of Royal Dutch Shell, Shell Canada said it filed its formal offer to acquire all the common shares of Duvernay Oil with securities regulators in Canada, and has mailed its offering circular and related documents to Duvernay shareholders.

On July 14, Shell had announced plans to buy the small gas-focused player as part of plans to boost its unconventional gas reserves. Alberta-based Duvernay is a major acreage holder in Canada's Western Canadian Sedimentary Basin where it has some 1,800 sq km of landholdings and produces some 25,000 bpd of oil equivalent mostly in natural gas, Shell said.
The company holds positions in the emerging Montney tight gas sands trend and plans to increase production to around 70,000 boepd by 2012. Shell said it has around 80,000 boepd of tight gas production in North America, and has been building its acreage positions for future growth.

The Duvernay board has unanimously accepted a cash offer of C$ 83/share. The company's directors have also committed to selling their shares to Shell under the offer, representing some 18.1 % of company. The offer would value Duvernay's fully diluted share capital at C$ 5.9 bn, including debt, and would be a 36 % premium over the average share price over the last 30 days, Shell said.
Duvernay also agreed to pay a non-completion fee of C$ 120 mm. Founded in 2001, Duvernay reported proven reserves of 95.9 mm boe reserves at the end of 2007, of which 521.8 mm cf were gas and 9 mm barrels were oil.

Unconventional gas resources such as Canada's gas sands require advanced techniques to develop.
The Deep Basin, on the western fringe of the Western Canadian Sedimentary Basin, is estimated to hold large volumes of gas in tight, low-permeability reservoirs.