Chevron has announced the sale of its assets in the Athabasca Oil Sands and Duvernay Shale to Canadian Natural Resources for $6.5 billion.
The all-cash deal, part of Chevron’s plan to divest $10-15 billion in assets by 2028, is expected to close in the fourth quarter of 2024.
The assets, located in Alberta, Canada, contributed 84,000 barrels of oil equivalent per day (boepd) to Chevron’s production in 2023.
The Duvernay Shale, one of Canada’s most productive shale formations, has seen eight deals worth $2.9 billion in the last three years, according to Wood Mackenzie.
Following the transaction, Canadian Natural will hold a 90% stake in the Athabasca Oil Sands project, with Shell retaining the remaining 10%.
Canadian Natural plans to increase its production target by an additional 122,500 boepd by 2025, partly through the Duvernay assets.
Additionally, the company raised its quarterly dividend by 7% to 56.25 Canadian cents per share, payable in January 2025.
Chief Financial Officer Mark Stainthorpe noted that the acquisition would immediately boost cash flow and earnings. As of June 30, Canadian Natural had long-term debt of C$9.33 billion.
Chevron is shifting its focus to key areas, including U.S. shale basins, the Gulf of Mexico, the Eastern Mediterranean, Guyana, Australia, and Kazakhstan, with over 75% of its production budget allocated to these regions.
The company recently passed an FTC review for its $53 billion deal to acquire Hess but still faces a legal challenge from ExxonMobil and CNOOC, Hess’s partners in a Guyana joint venture. A three-judge arbitration panel will review the case in May 2025.
Chevron shares were up 1% in early trading, supported by rising oil prices.
