Chevron announced Monday that it's Canadian subsidiary has reached a $1.5 billion agreement to sell a 30% interest in its Duvernay shale play to Kuwait Foreign Petroleum Exploration's (KUFPEC) Canadian unit.

The Duvernay shale is situated in west-central Alberta and is believed to be among the most promising shale opportunities in NAM. According to Canada's Energy Resources Conservation Board, the Duvernay formation contains an estimated 443 Tcf of gas and 61.7 billion barrels of oil.

Geologists have known for decades that O&G lay within the enormous play, which is as large as South Korea and runs along the foothills east of the Rocky Mountains.

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

Jay Johnson, senior vice president, Upstream, Chevron Corp, commented, "This sale demonstrates our focus on strategically managing our portfolio to maximize the value of our global upstream businesses and is consistent with our partnership strategy...The transaction provides us an expanded relationship with a valued partner. It also recognizes the outstanding asset base we have assembled."

Chevron Canada will hold a 70% interest in the joint venture Duvernay acreage and will retain operatorship following the close of the transaction, scheduled for November 2014.

Since the beginning of its exploration program in the Duvernay shale, Chevron Canada has drilled 16 wells, with initial production rates of up to 7.5 million cubic feet of natural gas and 1,300 barrels of condensate per day.

Almost a year ago, Chevron completed the initial 12-well exploration drilling program in the Kaybob area. The company said at the time, "Early results of our Duvernay exploration program are encouraging...The discovery creates a foundation for future growth in Canada."

A pad drilling program also recently began which is intended to further assess and optimize reservoir performance as well as reduce execution costs and cycle time.