BY Richard Summerfield
Chevron Canada, a subsidiary of Chevron Corporation, has agreed to sell its assets in Athabasca Oil Sands and Duvernay Shale to Canadian Natural Resources in a $6.5bn deal.
The all-cash deal is expected to close in Q4 2024, subject to regulatory approvals and other customary closing conditions, and is part of the company’s strategy to divest $10bn to $15bn of assets by 2028.
The deal will see Chrevon sell its 20 percent non-operated interest in the Athabasca Oil Sands Project, 70 percent operated interest in the Duvernay shale, and related interests, all located in Alberta, Canada, to Canadian Natural Resources. The assets contributed 84,000 barrels of oil equivalent per day (boe/d) of production, net of royalties, to Chevron in 2023. Canadian Natural Resources said that these acquisitions add targeted 2025 production of approximately 122,500 boe/d, and the addition of approximately 1448 million boe/d of total proved plus probable reserves.
“These assets are a great fit for Canadian Natural and will allow us to further implement our strong operating culture and drive significant value for shareholders,” said Scott Stauth, president of Canadian Natural. “We have made significant progress in driving efficiencies at AOSP over the last 7 years since the original acquisition in May 2017. We expect further efficiencies and improved performance going forward as a result of our relentless focus on continuous improvement.
“The light crude oil and liquids rich Duvernay assets fit well with our current operations in the area and will drive significant value from our area knowledge and significant experience in this type of resource play,” he continued. “Both acquisitions provide Canadian Natural with immediate free cash flow generation and further opportunities to drive long term shareholder value.”
“This is a great opportunity to add to our world class Oil Sands Mining and Upgrading asset at AOSP, as well as light crude oil and liquids rich assets in Alberta,” said Mark Stainthorpe, chief financial officer of Canadian Natural. “Both of these acquisition properties are targeted to provide significant free cash flow generation on a go forward basis. Having operated the AOSP mines and knowing the assets well, eliminates the risks associated with a brownfield or greenfield project. These transactions are immediately cash flow and earnings accretive to Canadian Natural shareholders.
“Given our strong balance sheet and significant free cash flow generation we are in an excellent position to take advantage of these opportunities that don’t come along very often,” he added.
News: Chevron to sell assets worth $6.5 billion to Canadian Natural Resources