Shell Offers to Acquire Duvernay's Outstanding Shares for C$5.9B

Royal Dutch Shell plc has announced a proposal by its wholly owned subsidiary Shell Canada Limited, to offer (the "Offer") to acquire all of the outstanding shares of Duvernay Oil Corp.

The Offer will be a cash offer of C$83 per share of Duvernay. The Offer would value Duvernay's fully diluted share capital at approximately C$5.9 billion, including debt, and would be a 36% premium over the average share price over the last 30 days.

The Board of Duvernay has voted unanimously to recommend the Offer to shareholders.

In connection with the Offer, directors and officers of Duvernay have entered into lock-up agreements pursuant to which they have agreed to tender all of their shares in connection with the Offer, subject to certain exceptions, representing in aggregate some 18.1% of the fully diluted share capital of Duvernay. In addition, Duvernay has agreed in certain circumstances to pay a non-completion fee of C$120 million, and the parties have agreed to customary non-solicitation covenants.

Duvernay is a leading acreage holder in the Western Canadian Sedimentary Basin. The company has some 1,800 square kilometers of landholdings there, including positions in the emerging Montney tight gas trend. Duvernay has reported over 25,000 barrels oil equivalent per day (boe/d) of production, predominantly in natural gas, with plans to increase production to around 70,000 boe/d by 2012. Shell has around 80,000 boe/d of tight gas production in North America, and has been building its acreage positions for future growth.

"Shell has a proven track record in North America tight gas activities. Duvernay could become a valuable part of the Shell portfolio, where we can add value through technology and scale. The combination of Duvernay's acreage with Shell's proven operating experience and financing capabilities make this transaction attractive to all shareholders," said Shell's Chief Executive, Jeroen van der Veer.

Full details of the Offer will be included in a take-over bid circular and related documents, which will be filed shortly with securities regulators and mailed to Duvernay shareholders.

The Offer is subject to regulatory approvals and other conditions contained in the formal offer documents, including the tendering of at least two-thirds of Duvernay's fully diluted share capital.