Chevron to acquire Anadarko Petroleum for $33 billion (CVX press release)

Chevron to acquire Anadarko Petroleum for $33 billion (CVX press release)

Anadarko also has a Mozambique LNG project, part of one of the industry's largest planned current investments.

In oil and gas production terms, the deal puts Chevron neck-and-neck again with Royal Dutch Shell Plc for the title of the second-largest integrated major oil company, slightly behind Exxon.

Anadarko employs about 1,100 people in Colorado, but has a much larger presence in Texas.

Chevron has entered into a definitive agreement with Anadarko to acquire all of the outstanding shares of Anadarko in a stock and cash transaction valued at 33 billion US dollars, or 65 dollars per share, the company said in a statement.

Chevron's deal values Anadarko at $65 per share, a 37% premium to its Thursday close.

Pioneer, Concho and Parsley shares rose 11.5 percent, 8.8 percent and 11.7 percent respectively on Friday following the announcement of the sale of Anadarko, amid investor speculation over who the next takeover target will be. The Houston-based company's willingness to ink a sale, rather than capitalize on oil prices rebounding, illustrates the significant challenges facing many USA shale producers.

Chevron has agreed one of the largest takeovers in the global oil industry with a $50 billion deal to buy Anadarko, an independent American producer.

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"Consolidation in deep water and the shales makes complete industrial sense", Christyan Malek, head of EMEA oil and gas research at JPMorgan, said by email.

Wirth said Chevron was particularly attracted to Anadarko's high-quality oil assets, from its natural gas assets in Mozambique to the Gulf of Mexico offshore production and its Permian Basin shale. Chevron would also assume $15 billion in debt.

Anadarko shares surged 32.1 percent in pre-market trading to $61.80, while Chevron fell 3.1 percent to $122.10. The combined company will also control a 75-mile-wide corridor across the Delaware Basin, just beside the Permian Basin, a region bountiful with natural gas that has been exploited through shale drilling.

Chevron's Permian production of oil, natural gas and associated liquids hit 16.2 billion barrels of oil equivalent (BOE) in 2018. Widening the measure to include chemicals and state-owned companies, both would be eclipsed by Saudi Aramco's US$69 billion acquisition of a majority stake in local petrochemical company Sabic this year. The company said will boost its share repurchase rate by US$1 billion to US$5 billion per year upon closing of the deal. The company's substantial Permian holdings of 2.2 million net acres have already realized production growth of 71% in the past year with Chevron targeting a CAGR of 30-40% through 2020.

If approved, the transaction is expected to improve Chevron's cash flow profile together with substantial annual cost synergies and attractive returns for shareholders. Morgan Stanley set a $72.00 price target on shares of Occidental Petroleum and gave the company a "buy" rating in a research report on Thursday, February 14th.

"We are the best company to combine with Anadarko and Anadarko is the best company to combine with us", Wirth said in an interview.

"We expect the Anadarko acquisition to close during the second half of 2019". Evercore Inc. and Goldman Sachs Group Inc advised Anadarko alongside law firms Wachtell, Lipton, Rosen & Katz and Vinson & Elkins LLP.