Chevron said on Monday, July 20, it would buy Noble Energy in a $5 billion all-stock deal, bolstering its shale presence as a plunge in crude prices have made assets cheaper, reported the Wall Street Journal.
The deal, the largest in the US energy sector this year, comes more than a year after Chevron abandoned its offer for Anadarko Petroleum, outmaneuvered by Occidental Petroleum’s higher bid.
Oil prices plunged to historic lows in April as the coronavirus crisis decimated demand. While prices have recovered from their lows, they remain depressed, making assets cheaper, as a new surge of Covid-19 cases threaten to stall recovery.
“Chevron (is) taking advantage of its strong relative performance versus the US exploration and production companies and capitalizing on the downturn to buy into some high-quality assets,” said Anish Kapadia, head of London-based independent oil and mining advisory Palissy Advisors.
The deal will also give Chevron access to Noble’s flagship Leviathan field, the largest natural gas field in the Eastern Mediterranean, which began producing natural gas late last year.