WINNIPEG, Manitoba (Reuters) – U.S. oil major ConocoPhillips said on Wednesday that it agreed to buy land from Kelt Exploration Ltd in Canada’s Montney shale oil play, in a $375 million deal.

The 140,000 acres in British Columbia are directly adjacent to ConocoPhillips’ own Montney lands, the company said. The oil resource amounts to 1 billion barrels of oil equivalent.

The deal allows ConocoPhillips to extend its existing position at an attractive cost, Chief Operating Officer Matt Fox said.

It comes three years after Houston-based ConocoPhillips sold much of its Canadian assets to Cenovus Energy, part of a multi-year withdrawal of foreign producers from Canada. In April, ConocoPhillips reduced production at its Surmont Canadian site by 100,000 barrels of oil per day.

Kelt said in a statement that the sale would strengthen its finances during an uncertain economic time, while leaving it a large inventory of future drilling sites.

The deal is expected to close Aug. 21.

(Reporting by Rod Nickel in Winnipeg, Manitoba; Editing by Leslie Adler)

tagreuters.com2020binary_LYNXNPEG6L1Q1-VIEWIMAGE