Porter Hedges Represents Chevron in its $525 Million Sale of a Majority Interest in its East Texas Gas Assets to Tokyo Gas

Porter Hedges advised Chevron U.S.A. Inc., a subsidiary of Chevron Corporation (“Chevron”) (NYSE: CVX), in its sale of a 70% interest in its East Texas gas assets to an affiliate of TG Natural Resources LLC (“TGNR”), a company indirectly owned by Tokyo Gas Co., Ltd. (“Tokyo Gas”) and Castleton Commodities International LLC (“CCI”), for $525 million, with $75 million paid in cash and $450 million as a capital carry to fund Haynesville development. Chevron will retain a 30% non-operated working interest (in a joint venture with TGNR) and an overriding royalty interest in the assets.

The transaction is anticipated to generate over $1.2 billion in value to Chevron (at current Henry Hub prices) through the multi-year capital carry, retained working interest, and overriding royalty interest. Chevron expects to maintain future upside through the joint venture structure while accelerating development of a non-core asset through a capital efficient approach.

Chevron is one of the world’s leading integrated energy companies, producing crude oil and natural gas; manufacturing transportation fuels, lubricants, petrochemicals and additives, and developing technologies that enhance its business and the industry.

Tokyo Gas is Japan’s largest provider of city-area gas, primarily serving the Tokyo metropolitan area and surrounding Kanto region. Besides Texas, it also has U.S. operations in the State of Louisiana.

CCI is a global energy commodity merchant with integrated businesses focused on marketing, merchandising, and trading commodities, and the ownership, operation, and development of commodities-related infrastructure assets.

For additional details, see the Chevron press release here.