Chevron Announced Divestiture of East Texas Gas Assets

SEATTLE (Oil Monster): Chevron Corporation confirmed that it has decided to sell its 70% stake in East Texas gas assets to TG Natural Resources- a joint venture between Japanese Tokyo Gas Co. Ltd. and Castleton Commodities International LLC. The transaction is valued at $525 million.

The divestiture is in alignment with the company’s previously disclosed plans to offload assets worth around $10-$15 billion by 2028. The company aims to focus on core operations, by allocating resources to high-return projects.

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The $75 million cash payment and the $450 million capital carry toward financing the development of the Haynesville shale assets make up the deal value. In the joint venture, Chevron will keep 30% of the non-operated working stake. The company's faith in the asset's long-term potential is demonstrated by its choice to keep its minority investment and royalty interests.

Chevron anticipates that the agreement will create more than $1.2 billion in overall value, taking into account the multi-year capital carry, working interest, and royalty interest, as well as the most recent Henry Hub natural gas prices.

The deal will assist TGNR in becoming a major participant in the shale play in Haynesville. Additionally, by adding more than 250 drilling locations to its current portfolio of Haynesville, the acquisition will greatly increase its position in the Ark-La-Tex region.