Chevron Corporation entered into a definitive agreement with independent oil and natural gas exploration and production company Noble Energy, Inc. to acquire all of the outstanding shares of Noble Energy in an all-stock transaction valued at $5 billion, or $10.38 per share. Based on Chevron’s closing price on 17 July 2020 and under the terms of the agreement, Noble Energy shareholders will receive 0.1191 shares of Chevron for each Noble Energy share. The total enterprise value, including debt, of the transaction is $13 billion.
The acquisition of Noble Energy provides Chevron with low-cost, proved reserves and attractive undeveloped resources that will enhance an already advantaged upstream portfolio. Noble Energy brings low-capital, cash-generating offshore assets in Israel, strengthening Chevron’s position in the Eastern Mediterranean.
Noble Energy also enhances Chevron’s leading US unconventional position with de-risked acreage in the DJ Basin and 92,000 largely contiguous and adjacent acres in the Permian Basin.
Based on Noble Energy’s proved reserves at year-end 2019, this will add approximately 18% to Chevron’s year-end 2019 proved oil and gas reserves at an average acquisition cost of less than $5/boe, and almost 7 billion barrels of risked resource for less than $1.50/boe.
The transaction is expected to achieve run-rate operating and other cost synergies of $300 million before-tax within a year of closing.
The transaction price represents a premium of nearly 12% on a 10-day average based on closing stock prices on 17 July 2020. Following closing of the transaction, Noble Energy shareholders will own approximately 3% of the combined company.