Chevron to Acquire Hess Corp in $53 Billion All-Stock Deal to Expand Presence in Guyana
Kersey, Colorado – Chevron Corp announced on Monday its plans to acquire smaller rival Hess Corp in a $53-billion all-stock deal, with the aim of increasing its footprint in the oil-rich region of Guyana. This move puts Chevron in direct competition with Exxon Mobil, as both companies vie for dominance in the rapidly growing oil basins of shale and Guyana.
Guyana has emerged as a major player in the oil industry in recent years, thanks to significant discoveries made by Exxon Mobil, Hess Corp, and China’s CNOOC. The three companies currently produce a combined total of 400,000 barrels per day (bpd) from two offshore vessels, and have expressed the potential to develop up to 10 offshore projects.
Under the terms of the agreement, Chevron will offer $171 for each share of Hess Corp, representing a premium of approximately 4.9% over the stock’s most recent closing price. Additionally, it is expected that CEO John Hess of Hess Corp will join Chevron’s board of directors once the deal is finalized, which is anticipated to occur in the first half of 2024.
The consolidation of the two companies is projected to result in increased production and free cash flow, surpassing Chevron’s existing five-year guidance. This growth is expected to provide greater confidence in long-term cash generation, which in turn will enable Chevron to return more cash to shareholders through higher dividend per share growth and increased share repurchases, according to Chevron’s CFO Pierre Breber in a statement.
This significant acquisition follows a similar move by Exxon Mobil, which recently offered $60 billion to acquire Pioneer Natural Resources, a move that would solidify its position as the largest producer in the largest oilfield in the United States.
About Chevron:
Chevron Corp. is one of the world’s leading integrated energy companies, with operations in over 180 countries. The company is involved in every aspect of the oil and gas industry, from exploration and production to refining and marketing. Chevron is committed to delivering reliable and affordable energy while minimizing its environmental impact.
About Hess Corp:
Hess Corp. is an independent energy company engaged in the exploration, production, and refining of crude oil and natural gas. With operations primarily focused in North America, Guyana, and the Gulf of Mexico, Hess is committed to developing sustainable energy solutions and reducing its environmental footprint.
Reporting by Mrinalika Roy in Bengaluru; Editing by Savio D’Souza and Nivedita Bhattacharjee
Disclaimer: This article was created for informational purposes only and does not constitute financial advice.