Chevron will take over Noble Energy for US$5 billion in the first big deal announced since the coronavirus pandemic shook the energy sector.
A Chevron logo appears at a gas station in Miami on July 25, 2011. THE CANADIAN PRESS/AP, Lynne SladkyNEW YORK -- Chevron will take over Noble Energy for $5 billion in the first big deal announced since the coronavirus pandemic shook the energy sector.
Based on Chevron's closing price on Friday, Noble Energy shareholders will receive 0.1191 shares of Chevron for each Noble Energy share. But with the list price comes a lot of debt. While Occidental's valuable holdings in the Permian Basin of west Texas and New Mexico appeared to be a good match, Chevron said at the time that it favoured discipline over “winning at any cost.”The acquisition brings to Chevron low-cost, proven reserves in addition to cash-generating offshore assets in Israel, strengthening the company's position in the Mediterranean. Noble's portfolio will also add to Chevron's U.S. acreage in the Permian Basin and in Colorado's DJ Basin.
Energy demand has bounced back as economies reopen globally. U.S. crude prices that fell for first four months of the year are gaining ground, and have been positive since May. It appears prices may remain positive for July, but prices are seesawing and the longest positive streak this month has been two days.
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