Page 8 - NorthAmOil Week 22 2021
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NorthAmOil INVESTMENT NorthAmOil
Chevron CEO signals willingness
to sell oil sands stake
ALBERTA CHEVRON’S CEO, Mike Wirth, has made Given the recent Chevron shareholder vote, it
comments suggesting that his company would would be unsurprising if pressure grows on the
consider selling its 20% stake in the Athabasca super-major to sell its oil sands interests too.
project, a Canadian oil sands mine. “We’re not in the kind of fire-sale mentality,”
This comes as the super-major faces growing Wirth said. “But if we got what we think is fair
investor pressure to do more to curb greenhouse value for an asset like that, we’ve been willing to
gas (GHG) emissions and fight climate change. transact on things that are of that scale and kind
Indeed, Chevron shareholders voted last week of relative importance in the portfolio.”
nearly 61% in favour of a proposal to force the The Athabasca project is operated by Cana-
company to cut its Scope 3 emissions – or those dian Natural Resources Ltd (CNRL), Canada’s
generated by customers using its products. (See: largest oil producer. The company is also taking
Oil giants face setbacks from shareholders over cli- steps to decarbonise its operations and is devel-
mate change, page 11) oping, testing or piloting a range of technologies
Speaking at Bernstein’s 37th Annual Strate- to this end.
gic Decisions Conference, Wirth said the stake Indeed, CNRL’s president, Tim McKay, said
in the Athabasca project generates “pretty good last week that out of these technologies, a molten
cash flow” without needing much capital, but carbonate fuel cell had captured his attention.
that he “wouldn’t deem it a strategic position”. Such a fuel cell will be piloted at CNRL’s Scotford
A number of other international companies Upgrader near Edmonton next year as part of a
have already exited the oil sands on concerns project with the Canadian Oil Sands Innovation
about the resource’s emissions intensity, and Alliance (COSIA). It will be 40% funded by the
because of the unfavourable price environment. province’s Emissions Reduction Alberta.
Southwestern strikes $2.7bn
deal to buy Indigo
US APPALACHIAN Basin-focused producer super-chilled fuel is booming and US shipments
Southwestern Energy has announced that it is continue to hit new highs. The company said in
acquiring Indigo Natural Resources in a $2.7bn its June 2 announcement that the deal expands
deal that will give it a position in Louisiana’s its estimated margins for 2022 by 12%, resulting
Haynesville shale gas play. The move comes as from low-cost access to “premium markets” in
a wave of consolidation continues to sweep the the Gulf Coast LNG corridor.
US shale industry. The transaction makes Southwestern the
Indigo is the third-largest privately owned gas third Appalachian Basin-focused producer this
producer in the US, with a pure play position in year to diversify away from its pure-play posi-
the Haynesville. It is currently producing 1.0bn tion, according to energy data analytics firm
cubic feet (28.3mn cubic metres) per day of gas, Enverus. It is also the largest deal for a pure-play
with this set to rise to 1.1 bcf (31.2 mcm) per day Haynesville shale producer since 2008, ahead of
by the time the transaction closes in the fourth Comstock Resources’ acquisition of Covey Park
quarter of 2021. Energy for $2.2bn in 2019.
Southwestern expects the deal to increase This is also the second major recent acqui-
its cumulative free cash flow (FCF) to around sition for Southwestern after it took over fellow
$1.2bn over 2021-23 and boost its high-return, Appalachian producer Montage Resources for
dry gas inventory with over 1,000 locations $865mn in November 2020. Now it is trying
added. The company’s overall net production to take advantage of strengthening gas prices
will rise by around a third to over 4 bcf (113 through an even larger deal.
mcm) per day of gas equivalent, consisting of “The industry is overall bullish on the outlook
around 85% gas. for gas, and Haynesville provides one of the two
In addition, Southwestern will benefit from major sources of low-cost supply along with the
access to the LNG export market on the US Appalachian Basin,” commented Enverus’ ana-
Gulf Coast, at a time when demand for the lyst Andrew Dittmar.
P8 www. NEWSBASE .com Week 22 03•June•2021