On May 22, 2023, Chevron announced that it had entered into a definitive agreement with PDC Energy, Inc. Chevron will acquire all of the outstanding shares of PDC in an all-stock transaction valued at $6.3 billion, or $72 per share.
On May 22, 2023, Chevron announced that it had entered into a definitive agreement with PDC Energy, Inc.The PDC acquisition looks like another savvy move for Chevron as it adds to its reserves at a very low acquisition cost per barrel. The acquisition is expected to close in the second half of 2023.
Chevron is one of the world’s largest integrated supermajor energy companies. The company has operations in more than 180 countries and produces oil and natural gas, refined products, chemicals, and other energy-related products. Chevron anticipates the transaction to be accretive to all key financial measures within the first year after closing and to add about $1 billion in annual free cash flow at $70 per barrel Brent and $3.50 per Mcf Henry Hub.Recall that in 2019, Chevron tried to acquire Anadarko in the sixth-largest oil and gas deal in history. The deal would have given Anadarko $33 billion, and it would have assumed Anadarko’s $17 billion debt for a total cost to Chevron of $50 billion.
Anadarko accepted the offer from Occidental, and the share prices of the two companies have diverged since. According to data extracted from market data provider , since the beginning of 2019, Chevron has a total return of 74%. Occidental’s performance over that time frame is a total return of 7%. This is a testament to Chevron’s financial discipline.
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