Chevron to buy Stabroek block partner for US$53b
Chevron said today it will buy smaller rival US firm Hess in a US$53 billion all-stock deal, as the oil major looks to increase its footprint in oil-rich Guyana.
CNBC said the deal puts two of the top oil giants, Chevron and Exxon Mobil, head-to-head in two of the world’s fastest-growing oil basins – shale and Guyana.
The Stabroek Block is 6.6 million acres. ExxonMobil affiliate Esso Exploration and Production Guyana Limited is operator and holds 45% interest in the Stabroek Block. Hess Guyana Exploration Ltd. currently holds 30% interest and CNOOC Petroleum Guyana Limited holds 25% interest.
Guyana has become a major oil producer in recent years after huge discoveries by ExxonMobil, its partner Hess and China’s CNOOC, which together produce 400,000 bpd from two offshore vessels and have said they could develop up to 10 offshore projects.
To buy Hess, CNBC said that Chevron is offering US$171 for every Hess share, implying a premium of about 4.9% to the share’s last close.
CEO John Hess of Hess Corp is expected to join Chevron’s board of directors once the deal closes around the first half of 2024.
The combined company is expected to up production and free cash flow faster and for longer than Chevron’s current five-year guidance, the companies said.
“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,” Chevron’s CFO Pierre Breber said in a statement.
The deal comes weeks after rival Exxon made a US$60 billion offer for Pioneer Natural Resources that would make it the biggest producer in the largest U.S. oilfield.
