Everything You Need to Know on Monday: Chevron to Divest Assets Worth $6.5 Billion to Canadian Natural Resources
Good morning mooers! Here are things you need to know about today's market:
●S&P/TSX 60 Index Standard Futures are trading at 1,449.80, down 0.04% from previous close
● China's Gold Reserves Unchanged for Fifth Straight Month in September
● Chevron to Divest Assets Worth $6.5 Billion to Canadian Natural Resources
● Solaris Resources Reports High-Grade Mineralization in Warintza Exploration Drilling
Currency Snapshot
Today, the Canadian dollar is trading at 73.6 US cents, a decrease from the previous close.
Macro
China's Gold Reserves Unchanged for Fifth Straight Month in September
China's central bank did not increase its gold reserves for the fifth consecutive month in September, maintaining holdings at 72.8 million troy ounces. Despite this, the value of its gold reserves rose to $191.47 billion, up from $182.98 billion in August, due to a 28% increase in gold prices this year. Factors driving prices include anticipated U.S. Federal Reserve interest rate cuts, geopolitical tensions, and strong demand from central banks.
The World Gold Council predicts that global central banks, which were active buyers in 2022-2023, will slow purchases in 2024 but keep levels above pre-2022 figures. The People's Bank of China (PBOC), which had been the largest official buyer in 2023, paused its purchases after 18 months of buying, leading to reduced demand from Chinese investors.
WisdomTree commodity strategist Nitesh Shah noted that while the PBOC may want to buy more gold, it is waiting for a more favorable price point, especially with projections of prices rising above $3,000 per ounce in the coming year.
Stocks to watch
Chevron to Divest Assets Worth $6.5 Billion to Canadian Natural Resources
Chevron Corp. has agreed to sell its stakes in oil sands and shale assets in Western Canada to $Canadian Natural Resources Ltd (CNQ.CA)$ Ltd. for $6.5 billion. This includes Chevron's 20% interest in the Athabasca Oil Sands Project and a 70% stake in the Duvernay shale in Alberta. The all-cash deal, effective September 1, is expected to close in the fourth quarter, pending regulatory approval.
This divestiture aligns with Chevron's strategy to focus on growth in other regions, particularly the Permian Basin in the U.S. and the Tengiz field in Kazakhstan, where it is nearing completion of a $48.5 billion expansion. Additionally, Chevron is acquiring Hess Corp. for $53 billion, which would enhance its presence in Guyana's offshore oil fields.
Chevron's shares rose 1.3% ahead of regular trading. This sale is part of a trend among major oil producers, including BP, Shell, and ConocoPhillips, who have divested Canadian oil sands assets, consolidating control with local companies.
Canada's oil sands are among the highest carbon-emitting energy sources, and the industry is evolving following the expansion of the Trans Mountain pipeline, which has opened Asian markets for Canadian crude. The Duvernay shale is a significant producer of condensate, light oil, and gas, with Canadian Natural Resources projecting production of about 60,000 barrels of oil per day by 2025. The deal will be financed through a $4 billion loan, and Canadian Natural Resources announced a 7% increase in its quarterly dividend.
Solaris Resources Reports High-Grade Mineralization in Warintza Exploration Drilling
$Solaris Resources Inc (SLS.CA)$ announced on Monday that exploration drilling at its Warintza project in Ecuador has revealed high-grade mineralization. Key results include 93 meters at 1.01% copper equivalent and 87 meters at 1.23% copper equivalent, with assays from a total of 13 holes targeting the sparsely drilled northwest and northeast sectors. The drilling is part of a 60,000-meter program for 2024, but with 53,000 meters already completed, the company anticipates exceeding its target by the end of Q4. Solaris shares rose $0.05 to close at $3.37 on the Toronto Stock Exchange.
Source: BNN Bloomberg
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