Chevron Enters Arkansas Lithium Market, Acquires TerraVolta Acreage

A core sample from the Smackover Formation (Karen E. Segrave)

TerraVolta Resources LLC of Houston, backed by the private Energy & Minerals Group (EMG), announced Tuesday that is has sold its two leasehold acreage positions in the lithium brine fields of Arkansas and Texas to Chevron U.S.A. Inc., a subsidiary of Chevron Corporation.

TerraVolta has a supply well in the Smackover geological formation. The purchase marks Chevron’s entry into domestic lithium production.

Chevron’s acquisition from TerraVolta comprises about 100,000 net acres. The company also acquired around 25,000 acres from East Texas Natural Resources LLC of Houston.

The leaseholds are in regions of the Smackover geological formation, specifically spanning northeast Texas and southwest Arkansas.

‘High Lithium Content”

“This formation is of particular interest due to its notably high lithium content and marks Chevron’s first step toward establishing a commercial-scale, domestic lithium business,” a press release from Chevron stated.

Chevron did not immediately respond to requests for comment, and financial details of the transaction were not disclosed.

The release also said that future development will aim to utilize the direct lithium extraction process, a set of advanced technologies employed to extract lithium from brines pumped up from deep underground. Chevron seeks to deploy this emerging technology, which allows for faster and more efficient production and is expected to have a smaller environmental footprint compared to traditional extraction methods.

A press release from TerraVolta stated that the Chevron acquisition will “further” the advances that TerraVolta has made.

“EMG has made multiple investments in the lithium space across the lithium hard rocks and the lithium brines, which includes our investment in TerraVolta,” John Raymond, founder and Executive Chairman of EMG, said in the release. “We applaud the TerraVolta team who has done an outstanding job of strategically constructing an industry leading presence in the Smackover Formation of southern Arkansas and northeast Texas. By virtue of the sale to Chevron, we are excited to see a new entrant to the basin that can help further develop this premium asset into a vital component of the domestic lithium supply chain.”

Domestic Demands

Jeff Gustavson, president of Chevron New Energies, said in the Chevron release that the acquisition represents a strategic investment to support energy manufacturing and expand U.S.-based critical mineral supplies.

“Establishing domestic and resilient lithium supply chains is essential not only to maintaining U.S. energy leadership, but also to meeting the growing demand from customers,” Gustavson said in the release. “This opportunity builds on many of Chevron’s strengths, including subsurface resource development and value chain integration.”

The Arkansas Oil & Gas Commission voted 9-0 on May 28 to set a royalty rate of 2.5% for lithium products derived from a specific brine unit operated by Smackover Lithium LLC, a joint venture of Standard Lithium of Canada and Equinor of Norway.