Chevron Divests 70% Stake In East Texas Gas Assets: Details

Chevron U.S.A. Inc., a subsidiary of Chevron Corporation CVX, has finalized a deal to sell a 70% stake in its East Texas natural gas assets to TG Natural Resources LLC (TGNR), an entity backed by Tokyo Gas Co., Ltd. and Castleton Commodities International LLC (CCI).

The transaction, valued at $525 million, includes $75 million in cash and $450 million allocated as a capital carry to finance Haynesville development.

Following the sale, Chevron will maintain a 30% non-operating working interest in a joint venture with TGNR, along with an overriding royalty interest in the assets.

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Tokyo Gas holds approximately 93% of TGNR, while CCI owns the remaining 7%.

The agreement is expected to yield over $1.2 billion in value for Chevron based on current Henry Hub prices. This estimate stems from a blend of the capital carry, retained ownership stake, and overriding royalty interest.

The deal’s structure enables Chevron to maintain future growth potential while accelerating asset development through an efficient capital approach.

The asset sale aligns with Chevron’s broader plan to streamline its global energy portfolio. The company has set a target of divesting $10-15 billion worth of assets by 2028.

Chevron focuses on producing oil and gas, refining fuels, and advancing industry technologies and aims to expand its traditional energy operations while reducing carbon emissions and investing in renewables, carbon capture, hydrogen, and emerging technologies.

Price Action: CVX shares are trading lower by 0.26% at $166.85 in premarket at last check Tuesday.

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