Oops, something went wrong 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. "Chevron divests east Texas gas assets to TGNR for $525m" was originally created and published by Offshore Technology, a GlobalData owned brand.   The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. Sign in to access your portfolio