2. Chevron to buy Anadarko in oil mega-deal
Oil-and-gas giant Chevron said today that it's acquiring the big independent player Anadarko Petroleum in a $33 billion cash and stock deal.
Why it matters: Chevron, the second-largest U.S.-based multinational oil company, said the move would bolster its position in key domestic onshore and offshore fields — notably the surging Permian Basin region of Texas and New Mexico, which produces over 4 million barrels of oil per day.
"The combination of Anadarko’s premier, high-quality assets with our advantaged portfolio strengthens our leading position in the Permian, builds on our deepwater Gulf of Mexico capabilities and will grow our LNG business." — Chevron CEO Mike Wirth, in statement
Quick take: The deal underscores how oil majors are aggressively expanding their operations in the onshore shale business, especially in the Permian.
- "The combination of the two companies will create a 75-mile-wide corridor across the most attractive acreage in the Delaware basin," the announcement says, referring to a portion of the Permian that's confusingly named after another state.
- Last month ExxonMobil announced updated Permian growth plans, while BP last year announced the $10.5 billion acquisition of BHP Billiton's U.S. onshore holdings.
Of note: The deal is not solely about bolstering U.S. assets, Chevron said. "Chevron will gain another world-class resource base in Mozambique to support growing LNG demand," the announcement notes.
What they're saying: It's the biggest acquisition among oil-and-gas producers since Shell announced the purchase of the BG Group in 2015, according to the consultancy Wood Mackenzie.
- Once the deal closes, Chevron will have the second-largest production among the oil and gas majors behind ExxonMobil.
- “Chevron now joins the ranks of the ultra-majors — and the big three becomes the big four," says Roy Martin, a senior research analyst with Wood Mackenzie.
- “The acquisition makes the Majors’ peer group much more polarized. ExxonMobil, Chevron, Shell and BP are now in a league of their own," he said.
What's next: The transaction will be 75% stock and 25% cash with an overall value of $65 per share, the companies said. Both companies' boards have signed off on the deal, and they expect it to close during the second half of the year.
- The transaction must still be approved by Anadarko shareholders and regulators, the joint announcement notes.
- The total value of the deal, including Chevron's assumption of Anadarko's debt, is $50 billion.