Chevron (NYSE:CVX) announced on Friday its decision to market its natural gas business in Canada’s Duvernay Shale, continuing its strategic efforts to streamline global operations following recent major acquisitions. The assets, located in central Alberta and spanning approximately 235,000 acres in the Duvernay field, are estimated to produce around 40,000 barrels of oil and gas daily. According to Energy Advisors Group, a Houston-based advisory firm, the assets could potentially fetch up to $900 million.
This move aligns with Chevron’s plan to divest assets valued between $10 billion and $15 billion by 2028, a strategy set in motion after significant deals with Hess Corp, PDC Energy, and Noble Energy that aim to bolster its oil and gas output. Chevron emphasized its commitment to focusing over 75% of upstream capital expenditures on key areas, including U.S. shale basins, the Gulf of Mexico, the Eastern Mediterranean, Guyana, Australia, and Kazakhstan.
A spokesperson for Chevron expressed confidence in the Duvernay assets, stating, “The business holds significant value in both its current production as well as potential growth opportunities, which we expect to be attractive to other companies with complementary portfolios.” The company clarified that its other Canadian operations remain unaffected by this decision.
The pending deal with Hess Corp, subject to regulatory approvals and expected to close in the second half of the year, further supports Chevron’s strategic realignment. Brian Lidsky, director of Energy Advisors Group, estimated the Duvernay properties’ potential value at $900 million based on recent acquisitions in the region.
Chevron’s involvement in the Duvernay play dates back to 2017 when it announced plans to develop the East Kaybob region. As of the end of 2022, 243 wells in the field had been tied into production facilities. Notably, Chevron’s shift in focus away from a major liquefied natural gas project in Canada in 2021 indicates the company’s dynamic approach to portfolio management.
The Duvernay Shale, recognized as one of Canada’s top shale plays, has attracted attention from various industry players. Chevron’s decision to divest aligns with the broader industry trend, emphasizing optimization and technology advancements in the field. Analysts at brokerage Eight Capital noted a surge in licensing activity, productivity improvements, and decreasing costs, making the Duvernay a key focus for investors in 2024.
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Author Faith Yakubu 
