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Image courtesy of Chevron.

Chevron agreed Monday to sell a 30 percent interest in its Duvernay shale play to Kuwait Foreign Petroleum Exploration Company’s wholly-owned subsidiary, KUFPEC Canada, for $1.5 billion.

The sale will be made through Chevron’s wholly-owned subsidiary Chevron Canada.

The total purchase price includes cash to be paid at closing as well as an agreement for KUFPEC Canada to cover a portion of Chevron’s share of the joint venture’s future capital costs.

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

The Duvernay is located in west central Alberta.

Following the closing of the transaction, Chevron Canada will hold a 70 percent interest in the joint venture Duvernay acreage and will remain the operator.

The transaction is expected to close in November 2014.

Chevron initially undertook a 13 well exploration program at the play using multi-stage hydraulic fracturing tied in to existing third-party processing facilities.

In the second half of 2014, Chevron started up a 32-well appraisal program at Duvernay, comprising eight pads with four wells per pad.

The new program is intended to evaluate well production rates and reservoir performance.