[1/3]Men work on an electric drilling rig at a Chevron site in Kersey, Colorado, U.S., October 6, 2022. Portal/Liz Hampton/File Photo Acquire License Rights
Oct 23 (Portal) – Chevron Corp (CVX.N) said on Monday it will buy smaller rival Hess Corp (HES.N) in a $53 billion all-stock deal, as the oil giant wants to expand its presence in the oil and gas sector. rich Guyana.
The deal pits two of the biggest oil giants, Chevron and Exxon Mobil (XOM.N), against each other in two of the world’s fastest-growing oil basins – shale and Guyana.
Guyana has emerged as a major oil producer in recent years following huge discoveries by Exxon Mobil, its partner Hess and China’s CNOOC, producing a combined 400,000 bpd from two offshore vessels and saying they have up to 10 offshore could develop projects.
To buy Hess, Chevron is offering $171 for each Hess share, representing a premium of about 4.9% to the stock’s most recent closing price.
CEO John Hess of Hess Corp is expected to join Chevron’s board once the transaction closes in approximately the first half of 2024.
The combined company is expected to grow production and free cash flow faster and for longer than Chevron’s current five-year forecast, the companies said.
“With greater confidence in projected long-term cash generation, Chevron intends to return more cash to shareholders through higher dividend growth per share and higher share repurchases,” Chevron CFO Pierre Breber said in a statement.
The deal comes weeks after rival Exxon (XOM.N) made a $60 billion offer for Pioneer Natural Resources (PXD.N) that would make the company the biggest producer in the largest U.S. oil patch.
Reporting by Mrinalika Roy in Bengaluru; Edited by Savio D’Souza and Nivedita Bhattacharjee
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