Chevron Corp. has entered into a definitive agreement with Hess Corp. to acquire all of the outstanding shares of Hess in an all-stock transaction valued at $53 billion, or $171 per share based on Chevron’s closing price on October 20, 2023. Under the terms of the agreement, Hess shareholders will receive 1.025 shares of Chevron for each Hess share. The total enterprise value, including debt, of the transaction is $60 billion.
“This combination positions Chevron to strengthen our long-term performance and further enhance our advantaged portfolio by adding world-class assets,” said Chevron Chairman and CEO Mike Wirth. “Importantly, our two companies have similar values and cultures, with a focus on operating safely and with integrity, attracting and developing the best people, making positive contributions to our communities and delivering higher returns and lower carbon.”
The acquisition of Hess upgrades and diversifies Chevron’s portfolio, according to the oil company. The Stabroek block in Guyana is an extraordinary asset with industry leading cash margins and low carbon intensity that is expected to deliver production growth into the next decade, Chevron said. Hess’ Bakken assets add another leading U.S. shale position to Chevron’s DJ and Permian basin operations and further strengthen domestic energy security. The combined company is expected to grow production and free cash flow faster and for longer than Chevron’s current five-year guidance. In addition, John Hess is expected to join Chevron’s Board of Directors.
“Building on our track record of successful transactions, the addition of Hess is expected to extend further Chevron’s free cash flow growth,” said Pierre Breber, Chevron’s chief financial officer. “With greater confidence in projected long-term cash generation, Chevron intends to return more cash to shareholders with higher dividend per share growth and higher share repurchases.”
John Hess added, “This strategic combination brings together two strong companies to create a premier integrated energy company. ... Chevron has a world-class diversified portfolio of assets and one of the industry’s strongest balance sheets and cash return profiles. I believe our strategic combination creates a company that is stronger in every respect, with the leadership, asset portfolio and financial resources to lead us through the energy transition and deliver significant shareholder value for years to come.”
The transaction price represents a premium of 10.3% on a 20-day average based on closing stock prices on October 20, 2023. Click here for more details of the acquisition.
Chevron is one of the world’s leading integrated energy companies. It produces crude oil and natural gas; manufactures transportation fuels, lubricants, petrochemicals and additives; and develops technologies that enhance our business and the industry. It also is a partner in ExtraMile Convenience Stores, a Pleasanton, California-based chain of more than 1,000 c-stores across seven western states.
- ExtraMile ranked No. 8 on CSP's 2023 Top 202 list of the largest c-store chains in the United States.
Hess Corp., a former convenience retailer that sold its store assets to Speedway in 2014, is a leading global independent energy company based in New York and engaged in the exploration and production of crude oil and natural gas with leading positions offshore Guyana, the Bakken shale play in North Dakota, the deepwater Gulf of Mexico and the Gulf of Thailand.
Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.