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Reuters: UPDATE 1-Exxon, Shell to sell Canada gas project stake

Tue Jun 26, 2007 6:53 PM BST

CALGARY, Alberta, June 26 (Reuters) – Exxon Mobil Corp. (XOM.N: Quote, Profile , Research) and Royal Dutch Shell Plc (RDSa.L: Quote, Profile , Research) want to sell their combined 18 percent stake in the proposed C$700 million ($654 million) Deep Panuke gas project off Nova Scotia’s Atlantic coast, the broker handling the auction said on Tuesday.

Bids on Exxon Mobil’s 12 percent and Shell’s 6 percent of the long-delayed development are due Aug. 8, IndigoPool, the Houston-based acquisition and divestiture service, said in an email.

EnCana Corp. (ECA.TO: Quote, Profile , Research) is the operator of Deep Panuke, with a 78 percent interest. It restarted efforts to develop it last year after halting its application in 2003 over high costs.

A regulatory decision for the field, which would produce 300 million cubic feet a day by 2010, is expected over the next few months.

Located 250 km (155 miles) southeast of Halifax, Nova Scotia, it would be the region’s second producing gas development after the Sable project, which started up in 1999.

Exxon Mobil and Shell are partners in Sable and have been in talks with EnCana over the possibility of providing gas transport to shore.

The oil majors gained Deep Panuke interests after EnCana drilled on their acreage to determine the extent of the reserves following the 1998 discovery, EnCana spokesman Alan Boras said.

Boras declined to say if EnCana might be interested in biding for the Exxon Mobil and Shell stakes.

($1=$1.07 Canadian)

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