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Chevron Considers Sale of Haynesville Assets

Chevron is considering offloading its assets in the eastern Texas portion of the Haynesville shale play after the massive acquisition of Hess Corp.

The supermajor is considering other options for the assets as well, Reuters reported, citing unnamed sources. The sources noted that Chevron’s output from part of these assets is around 40 million cubic feet of gas daily.

Chevron has plans to divest from $15 billion worth of assets over the next five years, after a string of acquisitions boosted its shale acreage by as much as 700,000 acres, and production by half a million barrels of oil daily.

"Chevron is evaluating opportunities for our East Texas assets and is committed to safely delivering high returns and lower carbon," a spokesperson for the company told Reuters.

The Haynesville shale formation is one of the biggest reservoirs of natural gas in the U.S., with an estimated 304 trillion cu ft of technically recoverable gas.

It is also in close proximity to the Gulf Coast and LNG terminals there. As such, it could be an attractive opportunity for prospective buyers amid robust demand expectations for LNG demand. These expectations have spurred a capacity-building rush in the U.S., which is seen pushing North America’s total to a twofold increase by 2027, to 24.3 billion cu ft daily.

Chevron, meanwhile, is growing in international oil. The acquisition of Hess Corp. for $53 billion gave the supermajor access to the oil wealth of Guyana, where Hess was the partner of Exxon in the prolific Stabroek Block that has already yielded a dozen major discoveries.

By buying Hess, Chevron will get 30% ownership in more than 11 billion barrels of oil equivalent discovered recoverable resource with high cash margins per barrel, strong production growth outlook, and potential exploration upside, Chevron said when it announced the acquisition.


By Charles Kennedy for Oilprice.com

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