Chevron to Buy Noble Energy In $5 Billion All-stock Deal

The deal would value Noble Energy Inc (NBL.O) at about  $13 billion, including debt. The deal will give Chevron more presence in Permian Basin in New Mexico,  West Texas, and the DJ Basin of Colorado.

The deal Chevron Corp (CVX.N) announced on Monday that it will buy Noble at for $10.38 a share, or 0.1191 a Chevron share,  a 7.6% premium over Noble’s Friday closing price of $9.65.The deal gives Chevron assets in the eastern Mediterranean and West Africa.

“Our strong balance sheet and financial discipline gives us the flexibility to be a buyer of quality assets during these challenging times,” said Chevron Chairman and CEO Michael Wirth. “This is a cost-effective opportunity for Chevron to acquire additional proved reserves and resources. Noble Energy’s multi-asset, high-quality portfolio will enhance geographic diversity, increase capital flexibility, and improve our ability to generate strong cash flow. These assets play to Chevron’s operational strengths, and the transaction underscores our commitment to capital discipline. We look forward to welcoming the Noble Energy team and shareholders to bring together the best of our organizations.”

“This combination is expected to unlock value for shareholders, generating anticipated annual run-rate cost synergies of approximately $300 million before tax, and it is expected to be accretive to free cash flow, earnings, and book returns one year after close,” Wirth concluded.

“The combination with Chevron is a compelling opportunity to join an admired global, diversified energy leader with a top-tier balance sheet and strong shareholder returns,” said David Stover, Noble Energy’s Chairman and CEO. “Over the last few years, we have made significant progress executing our strategic objectives, including driving capital efficiency gains onshore, advancing our offshore conventional gas developments and significantly reducing our cost structure. As we looked to build on this positive momentum, the Noble Energy Board of Directors and management team conducted a thorough process and concluded that this transaction is the best way to maximize value for all Noble Energy shareholders. We look forward to bringing together our highly complementary cultures and teams to realize the long-term value and benefits that this combination will deliver.” Source Chevron Investor Relations
Mike Wirth Chairman of The Board and Chief Executive Officer Michael K. (Mike) Wirth, 59, is chairman of the board and chief executive officer of Chevron Corporation.  He was elected to these positions by Chevron’s board of directors in September 2017 and assumed the roles on February 1, 2018.Prior to his current role, Wirth served as vice chairman of the board in 2017 and executive vice president of Midstream & Development for Chevron Corporation from 2016 – 2018. In that role, he was responsible for supply and trading, shipping, pipeline, and power operating units, as well as corporate strategy; business development; and policy, government, and public affairs. Source Chevron


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