Chevron announced on Monday that it has entered into an agreement to buy Noble Energy in an all stock deal valued at $5 billion.
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.
“Our strong balance sheet and financial discipline gives us the flexibility to be a buyer of quality assets during these challenging times. 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,” Chevron Chairman and CEO Michael Wirth said in a statement.
The takeover is expected to diversify Chevron’s portfolio with large-scale producing assets in the Eastern Mediterranean and West Africa – where Noble Energy made a final investment decision on the Alen gas monetization project in 2019 with start-up planned for the first half of 2021 – as well as boost the Houston-based oil and gas producer’s portfolio of assets in the Permian, DJ, and Eagle Ford basins.
“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,” Wirth stated.