Chevron to acquire Noble Energy for $5B

SAN RAMON, California and HOUSTON — Oil giant Chevron Corp. (NYSE: CVX) has agreed to acquire Houston-based Noble Energy Inc. (Nasdaq: NBL) in an all-stock deal.

In a statement Monday morning, Chevron said the deal amounts to $10.38 per share and just under $5 per barrel of Noble’s proven reserves among mineral rights it controls, which includes its assets in Weld County. Noble shareholders are expected to hold approximately 3% of Chevron’s stock after the deal is consummated.

The acquisition will increase Chevron’s proven oil and gas reserves by about 18% upon close and give it what it calls an “unconventional position” in the Denver-Julesburg Basin.

The two companies expect to create $300 million in pre-tax savings with the combination.

“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,” Chevron CEO Michael Wirth said.

The deal is the first major acquisition in the post-COVID crash era for oil companies, as the sudden drop in demand for fuel due to plummeting travel dropped oil prices to between $15 and $20 per barrel earlier in the spring, and caused the most important commodity in modern world history to go negative in late April.

Houston-based Noble is the second-largest producer of oil in Weld County, having produced 30.91 million barrels of oil and 215.18 million metric cubic feet of natural gas last year, according to data from the Colorado Oil and Gas Conservation Commission. Almost all of its Colorado production is in Weld County.

Like the rest of the industry, Noble cut its capital expenditures for new drilling in 2020 to between $800 million and $900 million, or about half of its expected budget at the start of the year. The majority of those cuts were made in the Wattenberg Gas Field that spans just east of the Front Range.

Chevron and Noble expect to close the deal in the fourth quarter of this year upon regulatory approval.

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