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Major transactions
involving conventional
Permian acreage are
comparatively unusual.

Chevron reportedly selling $1bn

of conventional Permian assets

PERMIAN BASIN SUPER-MAJOR Chevron is selling two sets non-core acreage at higher valuations than such
of conventional oil and gas assets in the Per- assets would have been able to achieve last year.
mian Basin, Reuters reported this week citing Indeed, a growing number of assets are up for
sources familiar with the matter. According to sale or have already changed hands in the Per-
the sources, the assets are valued at more than mian – though unconventional assets account
$1bn combined, with one noting they could for the majority of these transactions. Accord-
fetch up to $1.2bn depending on the strength of ing to a separate Reuters report from mid-June,
oil futures. Royal Dutch Shell is considering selling some or
The assets are comprised of $879mn worth all of its Permian assets, which could be worth
of conventional fields for which Chevron has more than $10bn in total.
retained an investment bank to market, plus Occidental has also recently struck a deal to A growing number
more than $200mn of assets available for sale sell some of its non-core Permian properties
elsewhere in the basin. to an affiliate of private equity-backed Colgate of assets are up
The assets are operated by Chevron and Occi- Energy Partners III for $508mn.
dental Petroleum – both of which had conven- Despite higher interest in shale assets, espe- for sale or have
tional operations in the Permian long before it cially in a region as prolific as the Permian,
emerged as a shale region. They are reported to interest in Chevron’s conventional properties already changed
span 57,000 net acres (231 square km), with pro- in the basin cannot be ruled out. Indeed, var- hands in the
duction of about 10,100 barrels of oil equivalent ious producers specialise in buying mature
per day (boepd). According to Reuters, initial assets and maximising the recovery from Permian.
bid proposals had been planned for June 10, with them.
a July 1 sale date targeted for the larger package. The reported push by Chevron to offload
The news service did not specify whether there non-core assets follows a shareholder vote in
had been any interest in the assets. May that went 61% in favour of a proposal to
Chevron has been evaluating other potential make the super-major cut its Scope 3 emis-
asset sales in the Permian and elsewhere, one sions – those resulting from use of its products
of Reuters’ sources said, and could sell off older by customers. Although the proposal does not
assets over the remainder of the year as it seeks require Chevron to set a target for how much it
to step up spending on the energy transition. needs to cut such emissions or by when, it illus-
Indeed, the super-major has previously said that trates the mounting pressure on the company to
it was considering how to optimise its portfolio. decarbonise. Against that backdrop, it comes as
The report comes as stronger oil prices no surprise that selling non-core assets may look
increasingly encourage producers to sell increasingly appealing.™

Week 26 01•July•2021 www. NEWSBASE .com P9