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Chevron Corp. (NYSE:) has acquired Hess Corp (NYSE:). for $53 billion, marking a significant move in the energy industry and broadening its US shale operations. The acquisition, led by Chevron CEO Michael Wirth, includes a 30% stake in Guyana’s Stabroek Block, the largest crude discovery in a decade. The project could potentially triple production to 1 million barrels a day by the end of this decade.
The acquisition brings Chevron billions of barrels of resources offshore Guyana and Bakken shale amid US onshore consolidation. This follows ExxonMobil (NYSE:)’s recent purchase of Pioneer Natural Resources (NYSE:) Co., which made Exxon America’s top producer in the Permian oil field, overtaking Chevron. According to InvestingPro data, Chevron has a market cap of 301.67B USD and a P/E ratio of 10.17, indicating its substantial size and profitability.
The deal also grants Chevron a partnership in ExxonMobil’s Stabroek oil assets. Wirth expects this partnership to enhance Chevron’s long-term performance and boost domestic energy security. The company’s diversification from over-dependence on the Tengiz project and US Permian through Noble Energy (NASDAQ:) procurement is also expected to be bolstered by this acquisition. InvestingPro Tips highlights that Chevron has a perfect Piotroski Score of 9 and has raised its dividend for 35 consecutive years, suggesting strong financial health and a commitment to returning capital to shareholders.
The deal incorporates Hess Midstream and Southeast Asian gas assets into Chevron’s portfolio. It also brings 11 billion barrels of oil equivalent, 465,000 net acres of Bakken inventory, Gulf of Mexico assets, industry-leading cash margins, low carbon intensity, and a potential LNG facility. Hess, with a market cap of 49.37B USD and a P/E ratio of 33.48, according to InvestingPro data, has been consistently increasing earnings per share and has maintained dividend payments for 37 consecutive years, as per InvestingPro Tips.
The Stabroek Block holds approximately 11 billion barrels of recoverable reserves. This was described as a “fairy tale” discovery by Exxon’s upstream boss, Neil Chapman. Hess funded the Liza 1 well that led to these significant oil discoveries in Guyana’s deep water after Shell (LON:) Plc pulled out.
With these acquisitions, Chevron and Exxon now control two of the fastest-growing production zones outside OPEC: Guyana and the Permian oil field. The companies’ strong performance is supported by their robust financial metrics and positive analyst outlooks, as detailed in the InvestingPro Tips and real-time metrics. For more insights like these, visit InvestingPro.
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