(Reuters) - Canadian Natural Resources Ltd CNQ.TO will sell most of its royalty assets to PrairieSky Royalty Ltd PSK.TO in a C$1.8 billion ($1.4 billion) deal, joining other oil producers in shedding assets to weather a slump in crude prices.

Pipelines at Canadian Natural Resources Limited's (CNRL) Primrose Lake oil sands project are seen near Cold Lake, Alberta August 8, 2013. REUTERS/Dan Riedlhuber

The deal comes just a week after Canadian Natural Chief Executive Steve Laut said the company would not rush to conclude a royalty deal this year.

Cenovus Energy Inc CVE.TO and Encana Corp ECA.TO, which spun off its royalty assets into PrairieSky last year, are the other major Canadian oil and gas producers that have shed assets in the past year to cut debt and raise funds for projects.

Canadian Natural said on Monday PrairieSky would pay C$680 million in cash and about 44.4 million PrairieSky shares for about 81 percent of its royalty volumes.

Canadian Natural’s shares closed at C$33.66 on the Toronto Stock Exchange on Friday, while PrairieSky shares ended at C$26.

Canadian Natural said it would use the cash proceeds to lower its debt-to-book value to about 36 percent from about 38 percent and increase its credit line to C$4.1 billion from C$3.4 billion.

The company, Canada’s No.2 oil and gas producer, said it planned to distribute a majority of the shares that are a part of the deal around its annual shareholder meeting in May.

Cenovus agreed in June to sell its royalty lands to Ontario Teachers’ Pension Plan for C$3.3 billion.

Reuters reported last month that Canadian Natural was in talks with the Canada Pension Plan Investment Board, Ontario Teachers’ and PrairieSky to offload its royalty assets.

The deal, which involves assets spanning about 5.4 million acres in Western Canada and representing about 6,700 barrels of oil equivalent per day, is expected to close this year.

Last week, Canadian Natural announced another cut to its capital expenditure budget for 2015. The latest cut brings down the company’s capital spending plan for next year to C$5.44 billion from about C$8.6 billion planned initially.

($1 = C$1.33)