With its eyes set on the Stabroek Block, oil giant Chevron Corporation announced, today, that it has entered into an agreement with Hess Corporation to acquire all of its outstanding shares in an all-stock transaction valued US$53 Billion.
Hess is one of three developers in the Stabroek Block with a 30 percent interest. To date, more than 11 billion barrels of oil equivalent have been discovered in the Stabroek Block.
Under the agreement, Hess shareholders will receive 1.0250 shares of Chevron for each Hess share.
In a statement, the multinational energy corporation, based in the US, said the acquisition of Hess will further diversify its already advantaged portfolio.
“The Stabroek block in Guyana is an extraordinary asset with industry leading cash margins and low carbon intensity that is expected to deliver production growth into the next decade,” the US oil giant said while adding that Hess’ Bakken assets will add greater value Chevron’s DJ and Permian basin operations, and further strengthen domestic energy security.
Chevron Chairman and Chief Executive Officer (CEO), Mike Wirth said the combination positions Chevron to strengthen its long-term performance and further enhance its advantaged portfolio with the addition of world-class assets.
“Importantly, our two companies have similar values and cultures, with a focus on operating safely and with integrity, attracting and developing the best people, making positive contributions to our communities and delivering higher returns and lower carbon,” Wirth said.
Weighing in on this new development, Chevron’s CFO, Pierre Breber said the consolidation of the two companies will accelerate the rate of production and further extend Chevron’s free cash flow growth.
“With greater confidence in projected long-term cash generation, Chevron intends to return more cash to shareholders with higher dividend per share growth and higher share repurchases,” Breber said.
Hess CEO, John Hess is expected to join Chevron’s Board of Directors, and according to him, the strategic combination will create a premier integrated energy company.
“I am proud of our people and what we have achieved as a company, which has one of the industry’s best growth portfolios including Guyana, the world’s largest oil discovery in the last 10 years, and the Bakken shale, where we are a leading oil and gas producer. Chevron has a world-class diversified portfolio of assets and one of the industry’s strongest balance sheets and cash return profiles. I believe our strategic combination creates a company that is stronger in every respect, with the leadership, asset portfolio and financial resources to lead us through the energy transition and deliver significant shareholder value for years to come,” Hess said.
As a result of the merger, Chevron is now in line to benefit from the more than 11 billion barrels of oil equivalent discovered in the Stabroek Block Offshore Guyana, in addition to Bakken’s 465,000 net acres of high-quality, long-duration inventory supported by the integrated assets of Hess Midstream.
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