Kuwait Foreign Petroleum Exploration Company, the exploration arm of Kuwait’s national oil company, has agreed to buy a 30 per cent stake in Chevron’s Duvernay shale play for $1.5bn.

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

The Duvernay shale formation is located in central Alberta and is one of North America’s largest shale deposits.

Following the closing of the transaction, Chevron Canada will hold a 70 per cent interest in the joint venture 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 programme, with initial well production rates of up to 7.5 million cubic feet of natural gas and 1,300 barrels of condensate a day.

“We remain encouraged by the early results of our exploration programme and view the Kaybob Duvernay as an exciting growth opportunity for the company,” says Jeff Shellebarger, president of Chevron North America Exploration and Production Company.

A pad drilling programme recently commenced, which is intended to further evaluate and optimise reservoir performance as well as reduce execution costs and cycle time.

Pad drilling involves drilling multiple wellbores from a single surface location.