Chevron announces sale of majority interest in its East Texas (U.S.) gas assets
Chevron U.S.A. Inc., a subsidiary of Chevron Corp., has closed on a transaction to sell a 70% interest in its East Texas gas assets to an affiliate of TG Natural Resources LLC (TGNR), a company indirectly owned by Tokyo Gas Co. Ltd. (Tokyo Gas) and Castleton Commodities Intl. LLC (CCI), for $525 MM, with $75 MM paid in cash and $450 MM as a capital carry to fund Haynesville development.
Chevron will retain a 30% non-operated working interest in a joint venture with TGNR and an overriding royalty interest in the assets. Tokyo Gas and CCI own an approximate 93% and 7% interest in TGNR, respectively.
The transaction is anticipated to generate > $1.2 B in value to Chevron at current Henry Hub prices through the multi-year capital carry, retained working interest and overriding royalty interest. Chevron expects to maintain future upside through the joint venture structure while accelerating development of a non-core asset through a capital efficient approach.
This transaction supports Chevron’s previously announced plans to divest $10 B–15 B of assets by 2028 to optimize its global energy portfolio.
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