Canadian Natural Resources has agreed to acquire the Alberta, Canada assets of Chevron Canada, an indirect subsidiary of Chevron, for a consideration of $6.5bn.
The transaction includes Chevron’s 20% non-operated interest in the Athabasca Oil Sands Project (AOSP) and its 70% operated interest in the Duvernay shale formation, in addition to associated assets.
The Athabasca Oil Sands Project includes Chevron’s interests in the Muskeg River and Jackpine mines, the Scotford Upgrader, and the Quest Carbon Capture and Storage facility.
Upon the completion of the acquisition, Canadian Natural Resources will hold a 90% working interest in the AOSP, resulting in an estimated increase of 62,500 barrels per day (bbl/d) in synthetic crude oil (SCO) production.
The deal also involves the acquisition of non-producing oil sands leases spanning 267,000 gross acres, of which 100,000 acres are net to Canadian Natural Resources.
Beyond the oil sands, the transaction will grant Canadian Natural Resources a 70% operated interest in the Duvernay shale play, which is expected to contribute 60,000 barrels of oil equivalent per day (BOE/d) by 2025. This production volume will consist of 179 million cubic feet per day (MMcf/d) of natural gas and 30,000bbl/d of natural gas liquids.
The assets accounted for 84,000BOE/d of Chevron’s total production in 2023. This divestment aligns with Chevron’s broader strategy to divest between $10bn-$15bn in assets by 2028 to optimise its global asset portfolio.
Canadian Natural Resources president Scott Stauth said: “These assets are a great fit for Canadian Natural Resources and will allow us to further implement our strong operating culture and drive significant value for shareholders.
“We have made significant progress in driving efficiencies at AOSP over the last seven years since the original acquisition in May 2017. We expect further efficiencies and improved performance going forward as a result of our relentless focus on continuous improvement.”
Following the transaction, Chevron employees working within the acquired operations will be integrated into Canadian Natural Resources’ workforce.
The acquisition is anticipated to augment Canadian Natural Resources’ production by an additional 122,500BOE/d in 2025 and contribute approximately 1,448 million barrels of oil equivalent (MMBOE) in total proved plus probable reserves.
The company plans to utilise its operational expertise to maximise the value of the acquired Duvernay assets, with a projection to increase production to 70,000BOE/d by 2027.
Canadian Natural Resources aims to exit 2024 with a debt-to-book capitalisation ratio of 30%.
Subject to regulatory approvals and other conditions, the deal is anticipated to close in Q4 2024.
