Chevron (CVX.N) announced on Friday that it is initiating the sale of its natural gas business in Canada's Duvernay Shale as part of its ongoing efforts to streamline global operations following significant acquisitions. The assets, located in the Duvernay field in central Alberta, cover approximately 235,000 acres (951.01 square kilometers) and currently produce around 40,000 barrels of oil and gas per day. Chevron anticipates that the sale could yield up to $900 million.

This move is in line with Chevron's broader strategy to divest between $10 billion and $15 billion in assets by 2028, a plan set in motion after major deals with companies like Hess Corp (HES.N), PDC Energy, and Noble Energy, aiming to substantially increase its oil and gas output. Despite the divestiture in Duvernay, Chevron reassured that its other Canadian operations remain unaffected.

The company emphasized its commitment to optimizing its portfolio by putting high-return assets up for sale. This strategy aims to diversify across asset types and geographies while achieving high cash margins and promoting low carbon intensity production. The pending regulatory approval for the Hess deal is anticipated to conclude in the second half of the year.

Energy Advisors Group's director, Brian Lidsky, estimated the value of the Duvernay Shale properties at $900 million, drawing parallels with recent acquisitions of Duvernay assets by Crescent Point (CPG.TO) and other industry players.

Chevron's involvement in the Duvernay region dates back to 2017 when it initially announced plans to develop the East Kaybob area after three years of appraising the region. By the end of 2022, 243 wells in the Duvernay field had been connected to production facilities.

In 2021, Chevron decided to shelve plans for a significant liquefied natural gas (LNG) project that aimed to export up to 10 million tonnes annually from Kitimat on Canada's west coast. Despite this, the Duvernay remains a prominent shale play in Canada, with other notable companies such as Crescent Point and PetroChina's (601857.SS) Canadian unit holding significant positions in the region. Notably, Athabasca Oil (ATH.TO) and Cenovus Energy (CVE.TO) formed a joint venture last month to accelerate their activities in the Duvernay play.

The Duvernay field has witnessed increased licensing activity and productivity improvements, resulting in a substantial reduction in well costs from a decade ago. Costs have decreased from as high as C$20 million ($14.85 million) per well to the current range of C$10 million to C$15 million, contributing to the region's attractiveness for energy investments.