Chevron Corp. (NYSE: CVX) agreed to sell a 30% stake in a venture to develop oil and natural gas from Canada’s Duvernay Shale to Kuwait Petroleum Corp., giving the Middle East producer a foothold in a top North American play, Bloomberg said Oct. 6.

Chevron, the second-largest U.S. oil and gas producer, said the $1.5 billion purchase price includes cash and an agreement to contribute to the venture’s capital costs. Chevron has drilled 16 exploration wells in the area so far, the San Ramon, Calif.-based company said in a statement Oct. 6.

The Duvernay area in Alberta is among the most promising shale opportunities in North America. So far, wells in the region have proven more expensive and taken longer to drill than similar shale formations in the U.S., Tudor Pickering Holt & Co. said in a research note.

There’s “still a lot of wood to chop” in the Duvernay, with per-well costs potentially coming down by $1.5 million, the Houston-based investment bank said in a separate note Oct. 2. More sophisticated drilling by larger companies “may allow year-round drilling and drive material cost saving.”

Chevron’s move comes as other Duvernay Shale holders such as Athabasca Oil Corp. (TSE: ATH), Penn West Petroleum Ltd. (NYSE: PWE; TSE: PWT), Trilogy Energy Corp. (TSE: TET) and Talisman Energy Inc. (NYSE: TLM; TSE: TLM) explore partnerships. Talisman, whose second-largest shareholder is billionaire Carl Icahn, sees a joint venture in Duvernay as an opportunity to boost shares.

The Duvernay, in central Alberta, holds an estimated 443 trillion cubic feet of gas and 61.7 billion barrels of oil, according to a report last year by the Energy Resources Conservation Board.

Kuwait has relied on traditional drilling while hydraulic fracturing and horizontal drilling have helped the U.S. unlock oil and gas reserves in shale plays. The Kuwait Oil Co. has identified a shale gas deposit and was planning to develop the resource soon, chairman and managing director Sami al-Rushaid said during a conference last year without disclosing any details.

Chevron’s deal with Kuwait appears to “be at a good price,” said Peter Hutton, a London-based analyst for RBC Capital Markets, who rates Chevron a Hold and owns none. The sale will reduce Chevron’s cash burn as it invests heavily in new developments through 2017, Hutton said Oct. 6 in a note to clients.

RBC assumes Chevron will sell $4 billion of assets this year, reducing cash burn to $7.2 billion.

Chevron will keep a 70% share in the venture and remain the operator. It built its Duvernay holdings last year with the purchase of 67,900 acres from Alta Energy Luxembourg S.a.r.l. for an undisclosed price.

“We remain encouraged by the early results of our exploration program,” Jeff Shellebarger, president of Chevron’s North American unit, said in the statement.

The deal is between Chevron and Kuwait Foreign Petroleum Exploration, a unit of state-run Kuwait Petroleum, which manages investments outside the Middle Eastern country.