Canadian Natural Expands Stake in Athabasca Project

Highlights

• Canadian Natural Resources increases its stake in the Athabasca Oil Sands Project, further solidifying its position in Alberta’s energy sector. 
• The acquisition also includes Chevron's interest in the Duvernay shale, enhancing Canadian Natural’s production potential. 
• This transaction is expected to generate significant cash flow for Canadian Natural, with production gains projected by 2025. 

Canadian Natural Resources Limited, a leading player in the oil and gas sector, has announced the acquisition of a 20% interest in the Athabasca Oil Sands Project (AOSP) from Chevron Canada, a subsidiary of Chevron Corporation. With this purchase, Canadian Natural now holds a 90% stake in the AOSP, further strengthening its position in Alberta’s resource-rich oil sands. 

Additional Acquisition of Duvernay Shale 

In addition to increasing its ownership in the AOSP, Canadian Natural Recourses Limited (TSX:CNQ) is acquiring a 70% operated interest in the Duvernay shale, located in Alberta. These assets are known for their significant reserves and production potential. The total transaction is valued at approximately US$6.5 billion, to be paid in cash to Chevron. This acquisition is a strategic move, adding approximately 122,500 barrels of oil equivalent per day to Canadian Natural’s projected production by 2025. 

Expanding Production Capacity and Reserves 

The acquisition will not only enhance Canadian Natural's production capabilities but also boost its overall reserves. The assets will add 1,448 million barrels of oil equivalent to the company’s total proved and probable reserves. These additions align with Canadian Natural's long-term strategy to drive free cash flow generation and strengthen its portfolio in Alberta's oil sands and shale operations. 

Both the AOSP and Duvernay shale assets are expected to offer Canadian Natural significant growth opportunities, particularly in oil sands mining and upgrading. The acquisitions are set to close by the fourth quarter of 2024, with an effective date of September 1, 2024. 

The company highlighted the benefits of the acquisition, with Canadian Natural’s president, Scott Stauth, emphasizing the immediate potential for cash flow generation. Canadian Natural CFO, Mark Stainthorpe, further stated that this acquisition enhances their “world-class Oil Sands Mining and Upgrading asset.” 

Chevron’s sale is part of its broader strategy to divest between $10 billion and $15 billion in assets by 2028, as previously announced. The acquired assets contributed 84,000 barrels of oil equivalent in 2023, demonstrating the potential for Canadian Natural to leverage these resources in the coming years.