Chevron Corporation has concluded a definitive agreement with Noble Energy to acquire all of Noble Energy’s outstanding shares in an all-stock transaction valued at US$5bn or US$10.38 per share
Noble Energy brings in Israel low-capital, cash-generating offshore assets, reinforcing Chevron’s position in the East Mediterranean. Noble Energy also enhances Chevron's leading unconventional position in the US with de-risked acreage in the DJ Basin and 92,000 largely adjacent and contiguous acres in the Permian Basin.
Chevron chairman and CEO Michael Wirth, said, “Our strong balance sheet and financial discipline gives us the flexibility to be a buyer of quality assets during these challenging times.”
“This offers Chevron a cost-effective opportunity to acquire additional proven reserves and resources. The multi-asset, high quality portfolio of Noble Energy will enhance geographic diversity, increase capital flexibility and enhance our ability to generate strong cash flow. These assets are playing into the operational strengths of Chevron and the transaction underlines our commitment to capital discipline.”
“This combination is expected to unlock value for shareholders, generate expected annual run-rate cost synergies of approximately US$300mn before tax, and is expected to increase free cash flow, earnings and book returns one year after closing,” Wirth added.
David Stover, Noble Energy’s chairman and CEO, commented, “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.
“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.
“The Noble Energy board of directors and management team conducted a thorough process and concluded that this transaction is the best way to maximise value for all Noble Energy shareholders. We look forward to bringing together our highly complementary cultures and teams to realise the long-term value and benefits that this combination will deliver.”