Chevron Corp. (NYSE: CVX) announced Monday morning that its wholly owned subsidiary, Chevron Canada Ltd., has sold a 30% stake in the company’s 330,000 net acres of the Duvernay shale play in Western Alberta to a subsidiary of Kuwait Foreign Exploration Company for $1.5 billion. Chevron Canada retains ownership of the other 70% and continues as the operator of the field.

The payment includes a portion in cash at the closing, which is due next month, and the rest will be paid as a carry of a portion of Chevron Canada’s share of the joint venture’s future capital costs in the liquids-rich shale play. According to Canada’s Energy Resources Conservation Board, the Duvernay shale play holds an estimated 443 trillion cubic feet of gas, 11.3 billion barrels of natural gas liquids and 61.7 billion barrels of oil.

Other major companies with a leases in the Duvernay include Encana Corp. (NYSE: ECA), Talisman Energy Inc. (NYSE: TLM), and the Canadian subsidiary of Royal Dutch Shell PLC (NYSE: RDS-A). Canada’s Financial Post reported last week that deals worth more than $32 billion have involved Canadian assets so far this year, compared with a total of just $13 billion in 2013.

There are at least a couple of interesting points in this. First, Chevron clearly does not want to take on all the development costs and risks by itself. Chevron has drilled 16 wells in its portion of the Duvernay play, with initial well production rates of 7.5 million cubic feet of natural gas and 1,300 barrels of condensate per day. That is a fraction of what industry consulting firm Wood Mackenzie forecasts as production by 2020 in the entire play: 1.5 billion cubic feet of gas and 130,000 barrels a day of liquids.

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Here is what a Chevron executive said in the press release:

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 has a long history in Kuwait, and 2013 production in the company’s operations in the partitioned zone between Kuwait and Saudi Arabia produced 87,000 barrels of oil-equivalent per day. Chevron is working on front-end engineering and development project to increase natural gas utilization and eliminate flaring in Kuwait, and a decision on the project is due by year’s end. Selling a stake in the Duvernay to Kuwait may play into the decision on the project in Kuwait.

Chevron’s shares closed at $117.71 on Friday and were inactive Monday morning. The stock’s 52-week range is $109.27 to $135.10.

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