Chevron buys Hess for $53bn as Big Oil chomps up the competition
Chevron-Hess deal comes less than two weeks after Exxon Mobil said that it would acquire Pioneer Natural Resources for about $60bn
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.Chevron is buying Hess Corp. for $53 billion and itās not even the biggest acquisition in the energy sector this month as major producers seize the initiative while oil prices surge.
The Chevron-Hess deal comes less than two weeks after Exxon Mobil said that it would acquire Pioneer Natural Resources for about $60 billion.
Crude prices are up 9 per cent this year and have been hovering around $90 per barrel for about two months.
Chevron said Monday that the acquisition of Hess adds a major oil field in Guyana as well as shale properties in the Bakken Formation in North Dakota.
Chevron is paying for Hess with stock. Hess shareholders will receive 1.0250 shares of Chevron for each Hess share. Including debt, Chevron valued the deal at $60 billion.
Chevron said the deal will help to increase the amount of cash given back to shareholders. The company anticipates that in January it will be able to recommend boosting its first-quarter dividend by 8% to $1.63. This would still need board approval.
The company also expects to increase stock buybacks by $2.5 billion to the top end of its guidance range of $20 billion per year once the transaction closes.
The boards of both companies have approved the deal, which is targeted to close in the first half of next year. It still needs approval by Hess shareholders.
Shares of Chevron Corp. declined nearly 3% before the opening bell Monday. Hess Corp.'s stock rose slightly.