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The
deal, the largest in the U.S. energy sector this year, comes
more than a year after Chevron abandoned its offer for Anadarko
Petroleum Corp, outmaneuvered by Occidental Petroleum Corp's
higher bid.
Oil prices plunged to historic lows in April as the coronavirus
crisis decimated demand. While prices have recovered from their
lows, they remain depressed, making assets cheaper, as a new
surge of COVID-19 cases threaten to stall recovery.
"Chevron (is) taking advantage of its strong relative
performance versus the US exploration and production companies
and capitalizing on the downturn to buy into some high quality
assets," said Anish Kapadia, head of London-based independent
oil and mining advisory Palissy Advisors.
The deal will also give Chevron access to Noble's flagship
Leviathan field, the largest natural gas field in the Eastern
Mediterranean, which began producing natural gas late last year.
Shares of Noble jumped about 8% premarket, while Chevron was
down about 1%.
The offer values Noble at $10.38 a share or 0.12 Chevron share,
a 7.5% premium to Noble's Friday close. The deal would value
Noble at roughly $13 billion, including debt.
Noble's assets will expand Chevron's presence in the DJ Basin of
Colorado and the Permian Basin across West Texas and New Mexico.
The deal would yield potential annual cost savings of $300
million.
Noble shareholders will own about 3% of the combined company.
The deal will add to Chevron's free cash flow and earnings per
share one year after closing, at $40 Brent, Chevron said.
Chevron had walked away with a $1 billion fee after Occidental
clinched a deal last May to buy Anadarko for $38 billion.
(Reporting by Shanti S Nair, Shariq Khan and Arathy S Nair in
Bengaluru; Editing by Shinjini Ganguli)
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