Chevron Looks To Dump More Permian Assets

Following a previously established trend of divesting Permian oil and gas assets, Chevron has put more assets up for grabs in New Mexico and Texas, according to documents seen by Reuters.

Chevron, the largest property owner in the area with over 2 million acres, has been offloading some assets in that region for a while, contributing to the pick up in oil and gas dealmaking. It has also picked up other assets in the same area, setting aside $4 billion for Permian basin development this year.

Last month, Chevron signed a deal to buy shale firm PDC energy for $6.3 billion—picking up assets next to its existing assets in the Denver-Julesburg and Permian Basins. It also had the highest bids for Gulf of Mexico drilling rights for seven of the ten blocks in oil lease sale number 259 back in March. Overall, Chevron had offered $108 million for 75 different tracts.

Meanwhile, Chevron has listed more than two thousand net acres for sale via auction in New Mexico, and nearly 30,000 acres in New Mexico and Texas, with bids due July 27. The value of the acreage up for grabs via these auctions is estimated at $100 million, Reuters suggested.

The dealmaking is likely a push to offload lower-valued assets in the area and pick up high-performance assets—a path that Chevron set out on years ago, but one that was potentially disrupted or slowed by the Covid pandemic.

Chevron is also in negotiations with shale-gas-rich Algeria over drilling rights there in a deal that could be finalized by the end of this year.

By Julianne Geiger for Oilprice.com