OAN’s James Meyers
8:34 AM – Monday, October 23, 2023
Chevron announced that they are buying rival company Hess amid uncertainty in the oil markets.
The deal was announced on Monday for $53 billion, with a total deal value of $60 billion including debt.
Chevron will now have more access to U.S. shale production in Texas’ Permian Basin, a part of the industry where Chevron has been a leader for years.
“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.
The latest deal between Chevron-Hess comes after Exxon Mobil said that it would acquire Pioneer Natural Resources for almost $60 billion less than two weeks ago.
Additionally, Chevron said the new deal will increase the company’s free cash flow, which will allow the company to do more share repurchases. The oil company also said it would increase buybacks of its stock by $2.5 billion to $20 billion a year.
Meanwhile, it is unclear whether Chevron or ExxonMobil will face antitrust dilemmas to complete their deals.
Shares of Chevron fell 3% in premarket trading following the announcement of the deal, while Hess’ shares rose slightly.
Furthermore, Hess CEO John Hess said the deal would make the company “stronger in every respect” and would deliver shareholder value.
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