Chevron Divests Assets to Canadian Natural

(Reuters) – Chevron is selling its assets in Athabasca Oil Sands and Duvernay Shale to Canadian Natural Resources for $6.5 billion, as part of its divestiture plan.

The all-cash transaction is expected to close in the fourth quarter and is part of Chevron’s strategy to divest $10 billion to $15 billion worth of assets by 2028.

The assets, located in Alberta, Canada, contributed 84,000 barrels of oil equivalent per day (boepd) to Chevron’s production in 2023.

Wood Mackenzie reported that the Duvernay is among Canada’s top shale plays, with eight deals worth $2.9 billion in the past three years.

Post-deal, Canadian Natural will own 90% of the Athabasca Oil Sands project, with Shell owning the remainder.

Additionally, the acquisition will provide Canadian Natural with 122,500 boepd of its target production for 2025.

The company also announced a 7% increase in its quarterly dividend to 56.25 Canadian cents per share, effective January 2025, as the deal is expected to boost cash flow and earnings immediately.

As of June 30, Canadian Natural had a long-term debt of C$9.33 billion.

Meanwhile, Chevron plans to allocate over 75% of its production budget to U.S. shale basins, the Gulf of Mexico, Eastern Mediterranean, Guyana, Australia, and Kazakhstan.

Following an FTC review, Chevron is progressing with its $53 billion deal for Hess, but faces challenges from Exxon’s and CNOOC’s interests in the Guyanese venture, with arbitration set for next May.

Chevron’s shares rose by 1% in a higher oil-price climate before opening.