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Chevron to buy Hess for $53 billion

23 October 2023

Chevron Corporation agreed to buy Hess Corporation in an all-stock transaction valued at $53 billion. Under the terms of the agreement, Hess shareholders will receive 1.0250 shares of Chevron for each Hess share.

The Chevron-Hess deal is the latest sign of consolidation in the US oil-and-gas industry. It follows the recent agreement by Exxon Mobil to acquire Pioneer Natural Resources for nearly $60 billion.

“This combination positions Chevron to strengthen our long-term performance and further enhance our advantaged portfolio by adding world-class assets,” said Chevron Chairman and CEO Mike Wirth.

The acquisition of Hess adds to the Chevron portfolio a major oil field in Guyana as well as shale properties in the Bakken formation in North Dakota and other assets. Guyana has become a rapidly growing offshore oil producer in recent years, with ExxonMobil, China’s CNOOC, and Hess being the only active oil companies. Hess holds a 30% stake in an Exxon-operated field now producing 380,000 barrels per day (b/d) and expected to produce 1.2 million b/d by 2027.

The acquisition will bring Chevron’s total oil and gas output to about 3.7 million b/d. It will increase Chevron’s shale output by 40%, making it comparable with Exxon’s projected 1.3 million b/d shale output following the Pioneer acquisition.

The transaction has been unanimously approved by the Boards of Directors of both companies and is expected to close in the first half of 2024. The acquisition is subject to Hess shareholder approval, as well as to regulatory approvals and other customary closing conditions.

Source: Chevron