Chevron to begin marketing shale-gas assets in Canada's Duvernay (updated)

Veren

19/01/2024 17:34

(Adds sales price estimate, details on Duvernay in paragraphs
6, 8-12)
    By Nia Williams and Sabrina Valle
       HOUSTON, Jan 19 (Reuters) - 
    Chevron  CVX.N  on Friday said it will put its shale-gas
business in Canada's Duvernay Shale for sale as it continues to
streamline global operations following several big acquisitions.
    The assets, which produce about 40,000 barrels of oil and
gas a day from about 235,000 acres in the Duvernay field in
central Alberta, could fetch up to US$900 million.  
    Chevron has said it plans to offer between $10 billion and
$15 billion in assets following deals with Hess Corp  HES.N ,
PDC Energy and Noble Energy that will significantly expand its
oil and gas output. 
    "We have a strong position and are proud of our performance
in the Duvernay," a spokesperson told Reuters. "The business
holds significant value in both its current production as well
as potential growth opportunities, which we expect to be
attractive to other companies with complementary portfolios."
    The company's other Canadian operations are unaffected, the
spokesperson said. 
    Brian Lidsky, director of Houston-based advisory firm Energy
Advisors Group, estimated the properties could be worth $900
million based on recent acquisitions of Duvernay properties by
Crescent Point  CPG.TO  and others.
    Chevron first announced plans to develop the East Kaybob
region of the Duvernay play in Alberta in 2017 after three years
appraising the area. At the end of 2022, 243 wells in the field
had been tied into production facilities.
    In 2021, Chevron shelved plans to build a major liquefied
natural gas project exporting up to 10 million tonnes per year
from Kitimat on Canada's west coast.
    The Duvernay is one of Canada's top shale plays. Other
companies with significant positions in the region include
Crescent Point and PetroChina's  601857.SS  Canadian unit. Last
month, Athabasca Oil  ATH.TO  and Cenovus Energy  CVE.TO  formed
a joint venture to accelerate their activity in the play.
        The field has seen a surge in licensing activity and 
productivity improvements, with costs coming down from as high
as C$20 million  ($14.85 million) per well a decade ago to C$10
million-C$15 million today, analysts at brokerage Eight Capital
said. 
  
        "The Duvernay is starting to become a key focus for the
industry, and is thus likely to get investors’ attention in
2024," its analysts wrote in a research note this month.
  
        "Operators have done enough drilling to understand how
to optimize the technology."
  

    ($1 = 1.3467 Canadian dollars)
  

 (Reporting by Nia Williams in British Columbia and Sabrina
Valle in Houston; editing by Gary McWilliams and David Gregorio)
 ((Gary.McWilliams@thomsonreuters.com; +1 469-691-7668;))