In a deal announced Wednesday, Exxon Mobil Corp (NYSE:XOM) plans to acquire Canadian oil and gas company Celtic Exploration Ltd. (TSE:CLT), for $2.6-billion.

The acquisition will help the world’s largest publicly traded energy company to increase its production and expand its asset base in western Canada. The deal will get Exxon access to vast tracts in the liquids-rich Montney shale, in the province of British Columbia, along with holdings in the Duvernay shale and other areas in the province of Alberta.

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“This acquisition will add significant liquids-rich resources to our existing North American unconventional portfolio,” Andrew Barry, president of Exxon Mobil Canada, said in a statement. “Our financial and technical strength will enable us to maximize resource value by leveraging the experience of Exxon Mobil Corporation (NYSE:XOM) subsidiary XTO Energy”.

As per the terms of the deal, ExxonMobil Canada will pay C$24.50 for each share of Celtic Exploration Ltd. (TSE:CLT), which is 35 percent above the closing price of Celtic on the Toronto Stock Exchange on Tuesday. Also, Celtic shareholders will receive half a share in a new company for each common share tendered. The deal, unanimously approved by Celtic’s board of directors, is valued at C$3.1 billion, including payments for Celtic’s convertible debentures, and Celtic’s bank debt and working capital obligations. The new entity led by Celtic’s current management team, will have a gas property at Grand Cache, Alberta; a liquids-rich natural gas property at Inga, British Columbia; and an oil prospect at Karr, Alberta.

The oil and gas industry is witnessing a lot of acquisitions in North America, as major oil producers struggle to boost output in a sector where vast energy resources are located in, and tightly controlled by, countries like Brazil and Russia.

Apart from the acquisition by Exxon Mobil Corporation (NYSE:XOM), energy rich provinces of Alberta and British Columbia in Western Canada, home to the bulk of Celtic’s assets, have witnessed numerous foreign takeovers. The bid from Chinese state-owned oil major CNOOC Ltd’s for Nexen Inc. (TSE:NXY), and Malaysian state oil company Petronas’ C$5.2 billion bid for Progress Energy Resources Corp. (TSE:PRQ), is currently under review by Canadian government.

The deal, which includes a C$90 million breakup fee payable under certain circumstances by Celtic Exploration Ltd. (TSE:CLT), is subject to approval from Celtic shareholders and from Canadian regulators. Celtic was advised by FirstEnergy Capital, RBC Capital Markets, and the law firm, Borden Ladner Gervais.