Chevron Corp. (CVX.US) is reportedly set to sell its Texas natural gas assets to Tokyo Gas Co. for $1 billion.
According to people familiar with the matter, Chevron (CVX.US) is in talks to sell its East Texas natural gas assets to Tokyo Gas for up to $1bn.
The people said negotiations over a potential deal for Chevron's investment in the Haynesville shale oilfield portfolio have been ongoing for months as the Japanese utility seeks to expand its access to the country's abundant fuel reserves and secure its energy supply. Japan relies on imported fossil fuels to meet its energy needs.
Last December, Tokyo Gas acquired the rights to the Haynesville Basin through its $2.7bn acquisition of Rockcliff Energy. The utility already is a major producer in the basin, producing about 1.3tn cubic feet of natural gas there every day.
The deal would mark another step in Chevron's $30bn divestment plan as it looks to complete its $53bn acquisition of Hess (HES.US). The energy giant plans to sell $10bn to $15bn of non-core assets by 2028 to optimize its global energy portfolio.
In a filing to the US Securities and Exchange Commission in March, the company said it was “evaluating strategic opportunities in the Haynesville area”.
The assets include 72,000 acres of mostly undeveloped land, but it is unclear how much gas is believed to be on the land.
Shortly before the report was released, Chevron agreed to sell its $6.5bn stake in Alberta to Canadian Natural Resources (CNQ.US).