US-based oil major Chevron has announced that it has come to a definitive agreement to acquire Hess Corporation in its entirety for an estimated $53 billion in stock.
Chevron believes that the acquisition will bolster its portfolio of assets and increase free cash flow and production more rapidly and for longer than the company estimated in its most recent five-year guidance. Hess owns some 465,000 net acres of quality assets in the Bakken oil fields of North Dakota that promise to have a long duration, with Hess Midstream’s integrated assets supporting the development of these.
Perhaps most notable, though, is Hess’s 30% stake in Guyana’s Stabroek block, which is operated by ExxonMobil. According to Chevron, this asset is extraordinary, with its production expected to grow into the next decade as it produces crude oil that has both a low-carbon intensity and some of the best cash margins in the industry. Chevron says that Hess CEO John Hess will likely join its board.
Mike Wirth, the CEO and Chairman of Chevron, said that the acquisition would reinforce:
“….long-term performance and further enhance our advantaged portfolio by adding 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.”
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