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Chevron buys Hess Corp in $53 million deal

Stellar Snippets

The second-largest oil company in the U.S., Chevron, announced that it will buy independent energy company Hess Corp for $53 billion.

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The corporation has crude oil and natural gas production in Guyana, the North Dakota Bakken Shale play, the deepwater Gulf of Mexico, and the Gulf of Thailand.

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The news comes weeks after rival Exxon Mobil acquired Natural Resources for $7 billion more at $60 billion.

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Guyana has become the third-largest oil producer in Latin America, following Brazil and Mexico.

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With this, Exxon and Chevron come in direct competition with each other as they battle to develop drilling in Guyana once the deal closes in 2024.

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Chevron expects its production and cash flow to grow, based on its current five-year guidance. CEO John Hess will join the Chevron board.

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Investors will get 1.025 Chevron shares for each Hess share they hold, or $171 per share. The total deal value comes to about $60 billion, including debt.

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These acquisitions are because oil markets are being stretched out. There have been cutbacks in production in Russia and Saudi Arabia.

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