Chevron Corporation, the California energy company has entered into a definitive agreement with Noble Energy, to acquire all of the outstanding shares of Noble Energy in an all-stock transaction valued at $5 Billion. This would be a major M&A deal after COVID-19 brought down energy demand, pushing several U.S. oil and gas companies into bankruptcy.
Chevron, is the second-largest stand-alone oil and gas company in the U.S. after Exxon Mobil. Acquisition of Noble will expand Chevron’s reach across Colorado’s DJ basin and 92,000 acres of the Permian Basin. The M&A deal will also enable Chevron to expand into the eastern Mediterranean – the assets off the coast of Israel, a growing hub for gas production.
Although the total enterprise value, including debt, of the transaction is $13 billion, Nobel’s assets, including its proven but undeveloped reserves, are a cheap buy for Chevron.