Chevron (CVX) is in talks to sell its natural gas assets in East Texas to Tokyo Gas (TKGSF), Japan’s largest gas supplier, according to the Financial Times. The deal includes CVX’s Haynesville shale assets, which are valued at approximately $1 billion and cover around 72,000 acres of primarily undeveloped land. The potential gas reserves associated with these assets have not yet been revealed.
This potential sale comes on the heels of Chevron’s recently finalized $6.5 billion deal to sell stakes in various oil sands and shale assets to Canadian Natural Resources (CNQ).
The Deal Holds Strategic Value for Both Parties
The Tokyo Gas deal holds significant value for both companies. For Chevron, this asset sale is part of the company’s strategy to divest non-core assets valued between $10 billion and $15 billion by 2028.
With these divestments, CVX aims to streamline its portfolio and focus on core assets. Moreover, the company seeks to free up capital and facilitate the completion of its $53 billion acquisition of Hess (HES), the largest deal in its history.
For Tokyo Gas, the acquisition aligns with its goal of securing a stable supply of natural gas for the Japanese market by capitalizing on the considerable gas reserves in the United States.
Is CVX a Good Stock to Buy?
Turning to Wall Street, CVX has a Moderate Buy consensus rating based on eight Buys and five Holds assigned in the last three months. At $173.08, the average Chevron price target implies 16.36% upside potential. Shares of the company have declined over 6% over the past six months.
