The US subsidiary of Chevron Corporation has sold a 70% interest in its East Texas gas assets to an affiliate of TG Natural Resources (TGNR) in a US$525m deal. Chevron will retain a 30% non-operated working interest in a joint venture with TGNR and an overriding royalty interest in the assets. The transaction expects to generate over US$1.2bn in value to Chevron at current Henry Hub prices through a multi-year capital carry of US$450, retained working interest, and overriding royalty interest. For TGNR, a Haynesville shale operator co-owned by Tokyo Gas (93%) and Castleton Commodities International (7%), the transaction represents an addition of more than 250 gross locations to its existing inventory and the extension of its inventory life beyond 20 years.
The deal supports Chevron’s previously announced plans to divest US$10-15bn of assets by 2028 to optimize its global energy portfolio.
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