NEW YORK (Reuters) - Chevron Corp (>> Chevron Corporation) has been searching for up to $1.5 billion of equity investment to help develop its Duvernay shale formation assets in Canada and contacted potential investors including private equity firms, according to people familiar with the matter.

Chevron’s subsidiary, Chevron Canada Limited, has exploration leases for approximately 330,000 net acres (1,335 square km) in the Duvernay shale formation. The area is located about 124 miles (200 km) northwest of Edmonton, Alberta.

The San Ramon, California-based oil and gas company has sent an offering memorandum to potential investors over the summer, said the people, who asked not to be named because the discussions were private.

Because oil and gas developments take many years to generate a return for their investors, Chevron was looking for an equity investor with a long-term investment horizon, the people said.

A representative for Chevron declined to comment.

Chevron announced in October that its initial exploration of the Kaybob area of the Duvernay shall formation was complete. At the time, the company said the next step was transitioning to a two-rig drilling program to optimize well and completion design.

A potential equity injection would help Chevron diffuse the development risk for the next phase of the project. Chevron commenced an exploration program in the Duvernay in 2011 and, as of August 2014, had drilled 15 wells, completed 13 using multi-stage hydraulic fracturing, and tied in 10 wells to existing third-party processing facilities. Hydraulic fracturing is more expensive than traditional extraction methods.

Some private equity firms had looked at the opportunity to provide an equity investment into the Duvernay project, but may not ultimately partner with Chevron because of the long investment horizon, according to the people familiar with the matter.

Chevron has recently bulked up its acreage in the Duvernay by 20 percent. In August, the company purchased the interests of Alta Energy Luxembourg, which had nearly 68,000 acres. New York-based private equity firm Blackstone Group LP (>> The Blackstone Group L.P.) was an investor in Alta Energy.

Other lease owners in the Duvernay shale formation include Penn West Petroleum Ltd (>> Penn West Petroleum Ltd), Royal Dutch Shell Plc and Athabasca Oil Corp (>> Athabasca Oil Corp).

(Reporting By Mike Stone in New York)

By Mike Stone