Chevron (CVX) Sells Gulf Of Mexico Oil Fields To Cantium
Zacks Investment Research | Jul 09, 2017 09:44PM ET
Integrated energy company, Chevron Corporation (NYSE:CVX) recently sold five fields in Gulf of Mexico’s Outer Continental Shelf and in Louisiana state waters to Cantium LLC, a private and independent oil and gas company. Cantium is funded by York Capital Management and Sole Source Capital.
Investors should know that in the first quarter of 2017, production from the properties of Chevron in the Gulf of Mexico increased significantly, which helped the company to achieve $80 million in earnings from the upstream business during this period.
Deal Details
The deal will provide Houston-based Cantium ownership of Chevron's Bay Marchand and Main Pass assets. The transaction includes 300 active wells, 151 platforms, the Port Fourchon onshore treatment plant, caissons, and several offshore structures. The deal amount was not disclosed by the companies. It is expected to be completed by the second half of this year. Cantium might retain some of the Chevron workers following the acquisition.
Cantium, established in 2016, wants to continue operations in the assets based in Covington, LA.
Chevron's View
The deal is in line with Chevron’s last year plan to divest $10 billion shallow water assets during 2016-17. This will enable the company to focus on its deepwater assets. The divestment plan is part of the company’s strategy to increase cash margin.
Chevron's divestment plans of lower margin barrels include the assets in Bangladesh, Canada, South Africa, Gulf of Mexico and Indonesia. Among these, sales and purchase agreements have already been signed for Original post
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