Chevron Sells 70% Stake In East Texas Gas Assets To TGNR For $525 Mln

(RTTNews) - Chevron U.S.A. Inc., a subsidiary of Chevron Corp. (CVX), announced that it has closed on a transaction to sell a 70% interest in its East Texas gas assets to an affiliate of TG Natural Resources LLC or "TGNR", a company indirectly owned by Tokyo Gas Co., Ltd. and Castleton Commodities International LLC or "CCI". The total transaction is valued at $525 million, comprising $75 million in cash and $450 million allocated as a capital carry to support the development of Haynesville.

Chevron said it 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 over $1.2 billion 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.

The transaction supports Chevron's previously announced plans to divest $10 billion - $15 billion of assets by 2028 in order to optimize its global energy portfolio.