Photo: Budrul Chukrut/SOPA Images/LightRocket via Getty Images

Chevron said Monday that it has entered into an agreement to acquire Noble Energy, a large independent oil-and-gas producer, in a $5 billion all-stock transaction.

Why it matters: It will expand Chevron's footprint in the U.S. shale patch, where the company is competing with rival Exxon.

  • Noble also has operations in the Mediterranean Sea and West Africa.
  • The total deal value, including debt, is $13 billion, according to Chevron. The Wall Street Journal notes that it's the "largest oil-patch tie-up since the coronavirus pandemic delivered a shock to the industry."
  • Some analysts see the coronavirus pandemic leading to substantial new consolidation in the U.S. sector.

Flashback: Chevron was already looking for acquisitions before the pandemic took aim at the oil industry.

  • Last year, Chevron looked to buy Anadarko Petroleum, another large independent player, but declined to enter into a bidding war with Occidental Petroleum, which ultimately bought the company.

What they're saying: Chevron said the deal for Noble would enhance its position in several areas, including the prolific Permian Basin.

  • Overall, the deal will add 18% to Chevron's proven oil-and-gas reserves and provide an estimated $300 million in annual cost-savings, the announcement states.
  • Chevron said the deal improves its international gas holdings, noting it "brings low-capital, cash-generating offshore assets in Israel, strengthening Chevron’s position in the Eastern Mediterranean."

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