Chevron has announced the sale of its Athabasca Oil Sands and Duvernay Shale assets to Canadian Natural Resources for $6.5 billion in an all-cash deal. This divestiture is part of Chevron’s plan to raise $10-$15 billion by 2028, allowing the company to sharpen its focus on high-return areas like U.S. shale and Kazakhstan.
Strategic Move in Asset Divestiture
The sale, expected to close by December 6, marks Chevron’s ongoing move away from higher-cost oil sands projects. Canadian Natural will now control 90% of the Athabasca Oil Sands, with Shell holding the remaining stake. This strategic move also strengthens Chevron’s financial position as it competes with Exxon (NYSE: XOM) for a $53 billion bid to acquire Hess.
Production Boost for Canadian Natural
Canadian Natural will increase its production by 122,500 barrels of oil equivalent per day (boepd) by 2025 from both the Duvernay and Athabasca assets. Chevron’s former assets contributed 84,000 boepd in 2023, highlighting their value in Canada's energy sector. Canadian Natural plans to invest an additional $400 million next year to integrate these assets.
Market Impact
Following the announcement, Chevron shares rose 0.7%, while Canadian Natural’s stock surged nearly 3.7%, buoyed by rising oil prices and expectations of enhanced cash flow from the acquisition.
