Chevron announced that it will sell its assets in the Athabasca Oil Sands and Duvernay Shale to Canadian Natural Resources for $6.5 billion, Reuters reported.
The operation, which will close in the fourth quarter, is part of its strategy to divest assets worth between $10 billion and $15 billion before 2028.
The assets, located in Alberta, Canada, provided Chevron with a production of 84 thousand barrels of oil equivalent per day (boepd) in 2023. The Duvernay area is one of the main shale deposits in Canada and has been the subject of eight operations worth $2.9 billion over the past three years, Wood Mackenzie reported in January.
Following the deal, Canadian Natural will own 90 per cent of the Athabasca Oil Sands project, while Shell will own the remainder.
The company said that, together with the Duvernay assets, it would add 122,500 boepd to its production target in 2025. It also increased its quarterly dividend by 7 percent, to 56.25 Canadian cents per share, payable in January 2025 Its chief financial officer, Mark Stainthorpe, said the deal will increase cash flow and profits immediately. Canadian Natural had long-term debt of C$9.33 billion as of June 30. Chevron, for its part, intends to invest more than 75 percent of its production budget in the shale basins of the United States, the Gulf of Mexico, the eastern Mediterranean, Guyana, Australia and Kazakhstan. It recently passed an FTC review of its $53 billion deal for Hess, but will have to overcome a challenge from Exxon and CNOOC, Hess’s partners in a Guyanese joint venture. An arbitration tribunal made up of three judges will study the case next May. Analysts at RBC Capital Markets said in a note that “this deal helps clean up the portfolio ahead of the pending closure of Hess,” and added that they expect free cash flow to improve in 2025. Chevron shares rose 1.1 percent before the opening of the session in an environment of higher oil prices.
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