Anglo Australian energy producer BHP Billiton( ASX:BHP,NYSE:BHP,LSE:BLT), has successfully won a bid to acquire two exploration licenses in the offshore Orphan Basin of Eastern Canada.

The licenses, which were awarded from the Canada-Newfoundland and Labrador Offshore Petroleum Board (C-NLOPB), will give the international oil major full ownership and operatorship of blocks 8 and 12 in the basin.

BHP’s winning bid for the two sectors was US$859 million.

“This frontier opportunity has large oil resource potential which we identified through our Global Petroleum Endowment Study in 2016 and is in a low risk country, with competitive fiscal terms,” Steve Pastor, BHP president operations petroleum, said in the press release.

“This opportunity delivers on our exploration focus in conventional petroleum and will leverage our global deep-water development and operational expertise.”

The C-NLOPB, which oversees the allocation of offshore oil projects, called for bids on 16 parcels of land in the Canada-Newfoundland and Labrador Offshore Area as part of its 2018 call for bids initiative.

Canadian oil producers Husky (TSX:HSE), Suncor Energy (TSX:SU) and private company Equinor Canada were also bid winners. Husky and Equinor will team up for parcel 14 while Equinor and Suncor will partner for a 60 percent/40 percent stake at parcel 15.

The combined grand total raised from all 4 bids was C$1,334,274,381.

Although the acquisition of parcels 8 and 12 is BHP’s first foray into Canadian exploration, the company is confident the project will be lucrative. The company has earmarked US$140 million for exploration work programs as part of the initial planned capital expenditure.

As long as the C-NLOPB signs off on the outlined conditions, BHP expects the finalized license agreements will be issued in December of this year and be effective in January 2019.

Shares of BHP remained flat on Thursday (November 8), trading at AU$33.33.

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Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article.