Mike Wirth, chairman and chief executive officer of Chevron Corp., during a Bloomberg Television interview in New York, US, on Monday, Sept. 18, 2023. Wirth said oil probably is headed for the $100 mark soon amid tightening supplies. Photographer: Christopher Goodney/Bloomberg
[Note: This story is also published at Forbes.com]
Less than two weeks after ExxonMobil’s all-stock buyout of Permian Basin giant Pioneer Natural Resources, fellow U.S. major Chevron said it is buying Houston-based independent Hess Corp. in another all-stock transaction. The acquisition of Hess will not only make Chevron a major player in the Bakken Shale basin in North Dakota and Montana, but also make it a 30% partner in the gigantic Stabroek block offshore Guyana in which ExxonMobil serves as operator.
Chevron said in a release issued early Monday it has entered into a definitive agreement to purchase Hess with an all-stock transaction valued at $53 billion, or $171 per share based on Chevron’s closing price on Friday, October 20, 2023. Under the deal’s terms, shareholders of Hess will receive 1.0250 shares of Chevron for each Hess share. The total enterprise value, including debt, of the deal is $60 billion, slightly less the total value of $64.5 billion for ExxonMobil’s deal with Pioneer.
In addition to its Bakken and Guyana assets, Hess brings with it sizable operations in the Gulf of Mexico, along with significant free cash flow from a Southeast Asia natural gas business. “This combination positions Chevron to strengthen our long-term performance and further enhance our advantaged portfolio by adding world-class assets,” said Chevron Chairman and CEO Mike Wirth. “Importantly, our two companies have similar values and cultures, with a focus on operating safely and with integrity, attracting and developing the best people, making positive contributions to our communities and delivering higher returns and lower carbon.”
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