Chevron agrees to acquire Noble Energy in all-stock deal

Oil major Chevron will acquire all of independent oil and natural gas E&P firm Noble Energy’s shares after the companies signed a definitive agreement valued at about $5bn, or $10.38 a share.

The total enterprise value of the transaction is $13bn, including net debt and a book value of non-controlling interest.

According to Chevron, the acquisition of Noble Energy will add low-cost, proved reserves and attractive undeveloped resources to the oil major, further enhancing the company’s upstream portfolio.

The deal boosts Chevron’s presence in the Eastern Mediterranean with the addition of offshore natural gas assets in Israel.

It also enhances Chevron’s US shale holdings in the Denver-Julesburg basin.

Chevron Chairman and CEO Michael Wirth said: “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.

“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 organisations.”

Expected to be closed in the fourth quarter of this year, the transaction is subject to Noble Energy shareholder approval, necessary regulatory approvals, and customary closing conditions.

Earlier this month, Chevron’s wholly-owned subsidiary Chevron Australia Downstream acquired Puma Energy (Australia) Holdings for AU$425m ($292.2m).

In a separate development, Australian independent firm Santos has warned investors that it expects to book a pre-tax non-cash impairment charge in the range of $700m-800m before tax in its H2-2020 results.

According to Santos, the impairment charge is due to the crash in global oil and gas prices as a result of the Covid-19 pandemic.