Chevron (CVX.N) announced on Monday that it is selling its assets in the Athabasca oil sands and Duvernay shale formation to Canadian Natural Resources (CNQ.TO) for $6.5 billion. The all-cash deal is expected to close by December 6 as part of Chevron’s broader divestiture strategy to raise $10 to $15 billion by 2028, focusing on U.S. shale and Kazakhstan.
This sale bolsters Chevron’s financial flexibility in its ongoing battle with Exxon over its $53 billion bid for Hess, a deal that has cleared an FTC review but will face arbitration next May. Chevron’s Canadian assets in Alberta contributed 84,000 barrels of oil equivalent per day (boepd) in 2023, and the sale will offload high-cost operations, aligning with a trend among oil majors to move away from the oil sands.
With the acquisition, Canadian Natural will own 90% of the Athabasca oil sands project, with Shell retaining the remaining 10%. Canadian Natural plans to add 122,500 boepd to its production by 2025, with an investment of $400 million next year. The company also raised its quarterly dividend by 7%, citing that the deal will enhance cash flow and earnings immediately.
Shares of Chevron rose 0.7%, while Canadian Natural’s stock surged nearly 3.7%, benefiting from a favorable oil price environment.