Chevron Finalises $13 Billion Purchase of Noble Energy

Chevron Corporation announced on Monday that it will acquire Noble Energy, including its debt, in an all-stock deal that values Noble at $10.38 a share or 0.12 Chevron share – a %7.5 premium to Noble’s close on Friday.

The deal will value Noble at roughly $13 billion, including debt, and would yield $300 million in potential annual cost savings.

Though based in Texas, Noble Energy is a crucial player in the Israeli energy sector, acting as the lead partner in Israel’s Leviathan and Tamar gas fields. Its assets in the DJ Basin of Colorado and the Permian Basin of New Mexico and West Texas.

Chevron made note of Noble’s holdings in Israel and the US when commenting on the advantages of the deal. “Noble Energy brings low-capital, cash-generating offshore assets in Israel, strengthening Chevron’s position in the Eastern Mediterranean,” it said. “Noble Energy also enhances Chevron’s leading U.S. unconventional position with de-risked acreage in DJ Basin and 92,000 largely contiguous and adjacent acres in the Permian Basin.”

Michael Wirth, Chairman and CEO of Chevron, gave further comment. “Our strong balance sheet and financial discipline gives us the flexibility to be a buyer of quality assets during these challenging times,” he 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.”

“We look forward to welcoming the Noble Energy team and shareholders to bring together the best of our organisations.”

The deal comes on the back of a worldwide oil crash, with prices of Brent crude plunging to historic lows in April as a Russia-Saudi price war and the COVID-19 pandemic severely impacted demand.

Noble currently holds debt of almost $9 billion against assets currently valued at over $17 billion.