Chevron buys PDC Energy in a $7.6 billion deal

(Reuters) – Chevron Corp (CVX.N) said on Monday it will acquire PDC Energy Inc (PDCE.O) in an all-equity deal for $7.6 billion, including debt, adding new drilling stock to US oil and gas. Protectorates.

The company has come under pressure on Wall Street to show it can continue to expand production beyond 2027 as its major shale holdings in the Permian Basin of West Texas and New Mexico near its peak production.

The PDC Energy deal is the second in three years to increase Chevron’s shale operations in Colorado and Wyoming. Chevron is already one of the largest producers in the Denver-Julesburg basin after its acquisition of Noble Energy in 2020 for $13 billion.

The company said in a statement that with the acquisition of PDC, Chevron will add 10% to its proven reserves at an expected cost of less than $7 per barrel.

The oil major injected cash from surging crude prices last year and held $15.7 billion at the end of the first quarter, about three times what it needs for operating activity.

The company had said in April that it expected to cut some of its cash.

The PDC deal is expected to add $1 billion to Chevron’s annual free cash flow. The deal values ​​PDC at $72 a share, which is a premium of 10.56% from Friday’s close and carries a stock value of $6.3 billion.

Chevron said the deal was unanimously approved by the boards of directors of the two companies and is expected to close by the end of the year.

See also  YouTuber MrBeast rejects Elon Musk's offer to upload videos to X

Additional reporting by Arunima Kumar in Bengaluru; Editing by Krishna Chandra Elori

Our standards: Thomson Reuters Trust Principles.

Leave a Reply

Your email address will not be published. Required fields are marked *