Chevron U.S.A. Inc., a subsidiary of Chevron, has closed on a transaction to sell a 70% interest in its East Texas gas assets to an affiliate of TG Natural Resources ('TGNR'), a company indirectly owned by Tokyo Gas and Castleton Commodities International ('CCI'), for $525 million, with $75 million paid in cash and $450 million as a capital carry to fund Haynesville development. Chevron will retain a 30% non-operated working interest in a joint venture with TGNR and an overriding royalty interest in the assets. Tokyo Gas and CCI own an approximate 93% and 7% interest in TGNR, respectively.
The transaction is anticipated to generate over $1.2 billion in value to Chevron at current Henry Hub prices through the multi-year capital carry, retained working interest, and overriding royalty interest. Chevron expects to maintain future upside through the joint venture structure while accelerating development of a non-core asset through a capital efficient approach.
This transaction supports Chevron’s previously announced plans to divest $10-15 billion of assets by 2028 in order to optimize its global energy portfolio.
Chevron is one of the world’s leading integrated energy companies. We believe affordable, reliable and ever-cleaner energy is essential to enabling human progress. Chevron produces crude oil and natural gas; manufactures transportation fuels, lubricants, petrochemicals and additives; and develops technologies that enhance our business and the industry. We aim to grow our oil and gas business, lower the carbon intensity of our operations and grow new businesses in renewable fuels, carbon capture and offsets, hydrogen, power generation for data centers, and emerging technologies. More information about Chevron is available at www.chevron.com.
Source: Chevron via businesswire
