Alberta (Business Emerge), October 7: Chevron announced on Monday that it is selling its assets in the Athabasca Oil Sands and Duvernay Shale to Canadian Natural Resources for $6.5 billion. This all-cash transaction is part of Chevron’s broader divestment strategy, aiming to offload $10 billion to $15 billion in assets by 2028. The deal is expected to be finalized in the fourth quarter of this year.
The Canadian assets, located in Alberta, generated 84,000 barrels of oil equivalent per day (boepd) for Chevron in 2023. With this acquisition, Canadian Natural Resources will increase its share in the Athabasca Oil Sands project to 90%, with the remaining 10% still owned by Shell. In addition to acquiring the Duvernay Shale assets, the company expects to boost its production by 122,500 boepd by 2025.
Chevron’s decision to divest these assets aligns with its focus on concentrating over 75% of its production budget on U.S. shale basins, the Gulf of Mexico, the Eastern Mediterranean, Guyana, Australia, and Kazakhstan. The company recently passed an FTC review for a $53 billion deal to acquire Hess, although it still faces a legal challenge from Exxon and CNOOC regarding a joint venture in Guyana, which will be addressed in arbitration next May.
The Duvernay Shale has been among Canada’s most prominent shale plays, with approximately eight deals totaling $2.9 billion executed in the last three years, according to Wood Mackenzie.
In addition to the new acquisition, Canadian Natural Resources announced a 7% increase in its quarterly dividend to 56.25 Canadian cents per share, payable in January 2025. CFO Mark Stainthorpe stated that the new assets would immediately contribute to cash flow and earnings.
As of June 30, Canadian Natural Resources reported a long-term debt of C$9.33 billion.