Chevron completes $53B acquisition of Hess
July 18 (UPI) -- Chevron, one of the world's leading energy companies, completed its $53 billion acquisition of Hess after all legal hurdles were cleared, including the company's vast oil fields off the coast of Guyana.
The deal involving the two public companies was originally announced on Oct. 23, 2023.
Chevron, headquartered in Houston, received a favorable arbitration ruling from the International Chamber of Commerce, denying Exxon Mobil's claim of a right of first refusal over Hess' assets in the Stabrock Block, an oil development site off Guyana adjacent to Brazil and Venezuela in South America.
Hess, headquartered in New York, has a 30% stake in the oil reserve. Exxon leads the project with 45%. China National Oil Corp., which also challenged the acquisition, has 25% stake.
"We disagree with the ICC panel's interpretation but respect the arbitration and dispute resolution process," Exxon said in a statement to CNBC after the ruling. "We welcome Chevron to the venture and look forward to continued industry-leading performance and value creation in Guyana for all parties involved."
Chevron Chairman and CEO Mike Wirth said in a statement: "This merger of two great American companies brings together the best in the industry. The combination enhances and extends our growth profile well into the next decade, which we believe will drive greater long-term value to shareholders."
Also on Friday, the Federal Trade Commission cleared CEO John Hess to join Chevron's Board of Directors, pending board approval.
"I'm pleased with the FTC's unanimous decision," Wirth said. "John is a respected industry leader, and our board would benefit from his experience, relationships and expertise."
John Hess said: "We are proud of everyone at Hess for building one of the industry's best growth portfolios, including Guyana, the world's largest oil discovery in the last 10 years, and the Bakken shale, where we are a leading oil and gas producer. The strategic combination of Chevron and Hess creates a premier energy company positioned for the future."
Chevron already is the leader in reserves worldwide.
The company has 463,000 acres off high-quality inventory in Bakken in North Dakota, Montana and Canada, as well of 31,000 barrels of oil equivalent per day in the Gulf of Mexico/America and gas assets in Southeast Asia with 57,000 barrels per day. Chevron also has assets in the Permian Basin in West Texas/southeastern New Mexico, DJ Basin in northeastern Colorado/southeastern Wyoming, Eastern Mediterranean, Kazakhstan and Australia.
"This accretive transaction is expected to drive significant free cash flow and production growth into the 2030s," Chief Financial Officer Eimear Bonner said. "We are quickly integrating our two companies and expect to achieve $1 billion in annual run-rate cost synergies by the end of 2025. All of this should enable even higher returns to shareholders over the long-term."
Hess shareholders will receive 1.0250 shares of each Chevron share.
The combined company's capital expenditures budget is projected to be between $19 billions and $22 billion, Chevron said.
Chevron's stock price was down 0.95% to 149.94 a few hours before closing on the New York Stock Exchange. Hess stock was halted on Friday due to the sale.
Chevron produces crude oil and natural gas; manufactures transportation fuels, lubricants, petrochemicals and additives; and develops technologies.
Chevron is a descendant of Standard Oil that broke away in 1911 and merged with Texaco in 2001. Exxon Mobil is also a descendant of Standard Oil.
Chevron in 2025 had the third-largest revenue of a U.S. company at $193 billion, behind Exxon-Mobil with $340 billion and Shell at $281 billion.
Saudi Aramco is the top publicly traded company with revenue of $478 billion, according to CompaniesMarketCap. Chevron ranks sixth worldwide with Exxon Mobil fourth.
Hess ranked 88th in the world with $12.5 billion.
Hess Oil and Chemical was founded in 1933 by Leon Hess in Asbury Park. N.J. The company opened its first oil refinery in 1966. In 1968, Hess merged with Amerada and changed its name to Hess Corp.
Hess, which has 1,797 employees, sold its gas stations to Speedway, which was acquired by 7-Eleven in 2021.
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