Chevron announced on 7 October that it will sell its interests in the Athabasca Oil Sands Project (AOSP) and Duvernay Shale for $6.5 billion to Canadian Natural Resources.
The all-cash deal includes Chevron’s 20% nonoperated stake in the AOSP and its 70% operated interest in the Duvernay Shale, both in Alberta, Canada, which contributed 84,000 BOE/D, net of royalties, to Chevron last year.
Chevron began marketing its Duvernay asset in January, which spans 340,000 gross acres and averaged 17,500 B/D of condensate and natural gas liquids, along with 126 MMcf/D of natural gas in 2022.
Canadian Natural, already the leading crude producer in Canada and the second-largest gas producer, said the acquisition will boost its overall production by approximately 122,500 BOE/D next year.
The company stated that the increase will be partially driven by the Duvernay assets, with an expected output of 60,000 BOE/D, including 179 MMcf/D of natural gas and 30,000 B/D of liquids. The remainder of the target is anticipated to come from 62,500 B/D of synthetic crude oil, following an increase in its working interest in the AOSP to 90%.
The 20% AOSP share also includes the Muskeg River and Jackpine mines, the Scotford upgrader, and the Shell-operated Quest carbon capture and storage facility.
Additionally, Canadian Natural will add nearly 267,000 gross acres of nonproducing oil sands leases, along with 1.45 billion BOE of proved and probable reserves in the acquisition.
Canadian Natural added in its statement that its board approved a 7% increase to the company’s quarterly dividend in 2025, raising it to $0.5625 per share and marking the 25th straight year of dividend increases.
Chevron’s decision to divest its Canadian assets aligns with its plan to sell $10 to $15 billion worth of holdings by 2028. The company is offloading assets while waiting to close its $53-billion acquisition of Hess Corp., which was recently approved by US regulators.
However, the deal, announced nearly a year ago, is on hold until arbitration next May with ExxonMobil and the China National Offshore Oil Company (CNOOC), following their challenge to Chevron’s attempt to acquire Hess and its 30% stake in their Guyana consortium.
Chevron said the deal with Canadian Natural has an effective date of 1 September and may close during the fourth quarter of 2024, pending regulatory approvals. The remaining 30% interest in Chevron’s Duvernay lease is held by KUFPEC Canada, a subsidiary of the Kuwait Foreign Petroleum Exploration Company.