Chevron (CVX.N) is selling its assets in the Athabasca oil sands and Duvernay shale formation to Canadian Natural Resources (CNQ.TO) for $6.5 billion, the oil giant said on Monday as it puts in motion its divestiture plan.The all-cash deal, which is expected to close by Dec. 6, is a part of its strategy to raise $10 billion to $15 billion by 2028 through asset sales, while increasing focus on regions such as U.S. shale and Kazakhstan.
After the deal, Canadian Natural will own 90% of the Athabasca oil sands project, while Shell (SHEL.L), owns the rest."(The deal) offloads a high-cost asset in the oil sands from Chevron and the Duvernay asset, which seems not to be competitive with the Permian position...," said Allen Good, analyst at Morningstar."Oil majors have been moving away from the oil sands in recent years, this continues the trend."
Canadian Natural said along with the Duvernay assets, it would add 122,500 boepd of its target production in 2025. Both together would result in an added investment of $400 million next year, company executives said in a conference call.The company also raised its quarterly dividend by 7% to 56.25 Canadian cents per share, payable in January 2025, with its finance chief Mark Stainthorpe saying the deal will add to cash flow and earnings immediately.
