Spanish oil and gas company Repsol has agreed to sell its Canadian assets to local natural gas company Peyto Exploration & Development (Peyto) in a deal valued at $468m (C$636m).

In a statement, Repsol said the deal covers all mining rights, facilities and infrastructure related to its oil and gas exploration and production operations in Canada.

This includes the Greater Edson area assets that have a net production of 23 thousand barrels of oil equivalent per day (boed), which is mainly gas.

For Repsol, the sale forms part of efforts to focus on operations in OECD countries, particularly on the US.

Separately, Peyto said the assets increase its Deep Basin land area by adding 455,000 net acres in the greater Edson region and roughly 23,000boed of production capacity.

Peyto noted that it has also discovered more than 800 gross locations that offer several years' worth of high-quality drilling inventory and a route to 100,000boed for the acquired properties.

Furthermore, the deal brings complementary infrastructure that includes five operating natural gas plants (one suspended) with a total net capacity of 400 million cubic feet per day, around 2,200km of operating pipelines and a 12 MW cogeneration power plant.

Peyto president and CEO Jean-Paul Lachance said: "This acquisition marks a very important milestone for Peyto. The Repsol assets fit perfectly with Peyto's existing Deep Basin acreage and offer a significant number of top-tier undeveloped locations that will immediately compete for capital within our portfolio.

“Furthermore, we have identified many opportunities to leverage our low-cost operational expertise on these assets, which we expect will yield significant annual cost savings.”

In April this year, Repsol signed a deal with China’s Sinopec to buy its 49% stake in Repsol Sinopec Resources UK, a North Sea oil and gas exploration joint venture.