Chevron U.S.A., a subsidiary of Chevron, has announced the sale of a 70% interest in its east Texas gas assets to TG Natural Resources (TGNR) for $525m.
TGNR is jointly owned by Tokyo Gas (93%) and Castleton Commodities International (7%).
The transaction involves a cash payment of $75m and $450m as a capital carry to fund the Haynesville development.
Chevron retains a 30% non-operated working interest in a joint venture (JV) with TGNR along with an overriding royalty interest.
The deal is expected to generate more than $1.2bn in value for Chevron at current Henry Hub prices, owing to the multi-year capital carry, retained working interest and overriding royalty interest.
Chevron aims to maintain future growth through the JV structure, while simultaneously expediting the development of a non-core asset via a capital-efficient approach.
This transaction aligns with Chevron’s strategy to divest $10–15bn of assets by 2028 to optimise its global energy portfolio.
TGNR will gain more than 250 gross locations in its Haynesville inventory as a result of the transaction and extend its inventory life beyond 20 years at the current development pace.
The Haynesville acreage is relatively undrilled, allowing mitigation of parent-child effects between wells.
TGNR CEO Craig Jarchow said: “We are excited to partner with a world-class company like Chevron on this transaction. There is considerable operational overlap between the Chevron acreage and the legacy TGNR acreage, which will allow TGNR to realise synergies of over $170m during the development of the asset.”
Truist Securities acted as the financial advisor to TGNR, while Kirkland & Ellis served as the legal advisor.
In a related move, Chevron recently acquired approximately 4.99% of Hess common shares, reflecting its confidence in a planned $53bn all-stock merger.
The deal has been approved by both US regulators and shareholders, despite facing opposition from Hess’ partners in Guyana, ExxonMobil and CNOOC.
