Chevron is buying Hess Corp. for $53 billion and it’s not even the biggest acquisition in the energy sector this month as major producers seize the initiative while oil prices surge.
Crude prices rose sharply in early 2022 with Russia’s invasion of Ukraine and are hovering around $90 per barrel after ticking another 9% higher this year, meaning big drillers are flush with cash and looking for places to invest piles of cash. The Chevron-Hess deal comes less than two weeks after Exxon Mobil said that it would acquire Pioneer Natural Resources for about $60 billion. Upward pressure on oil prices are being applied from a number of fronts including the war in Ukraine.
“In addition, Hess increases Chevron’s estimated production and free cash flow growth rates over the next five years, and is expected to extend our growth profile into the next decade supporting our plans to increase our peer-leading dividend growth and share repurchases.” 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.
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Chevron to acquire Hess Corp. in $53 billion all-share dealBarbara Kollmeyer is based in Madrid, where she leads MarketWatch's pre-markets coverage of financial markets and writes the Need to Know column. She has worked in London and Los Angeles for MarketWatch previously. Follow her on Twitter bkollmeyer.
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