Chevron (CVX) said it agreed to buy independent oil and gas producer Noble Energy (NBL) in an all-stock transaction valued at $5 billion. Noble Energy stockholders will receive 0.1191 of a share of Chevron stock for each Noble Energy share. The agreement values Noble Energy stock at $10.38 per share, a 7.5% premium to Noble Energy’s shares’ Friday closing price.
Once the transaction is complete, Noble Energy’s oil and gas assets will increase the scope of Chevron’s operations in the Denver-Julesburg Basin of Colorado and the Permian Basin that stretches across West Texas and New Mexico. Chevron will also receive Noble Energy’s assets in the eastern Mediterranean Sea and West Africa. Chevron’s offer for Noble Energy came more than one year after it had to cancel a takeover bid for Anadarko Petroleum, which was eventually acquired by Occidental Petroleum (OXY).
Energy companies face a crisis as the COVID-19 pandemic has crushed demand for oil, sending prices ever lower. A number of oil firms, especially those involved in shale, have already gone bankrupt.