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

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

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

Chevron will also take over Anadarko's 15 $bn debt. The deal comes as oil majors like Exxon Mobil look to carve out a dominant position in the Permian basin, the largest USA shale field and the driver of a boom in American oil production.

-Shale & Tight: The combination of the two companies will create a 75-mile-wide corridor across the most attractive acreage in the DE basin, extending Chevron's leading position as a producer in the Permian.

Anadarko also has a handful of overseas ventures, including a major liquefied natural gas project in Mozambique that Chevron said would help bolster one of its major global businesses.

The merger would be the sixth largest in the industry and the biggest since Shell bought BG Group for £47...

The deal, which is subject to shareholder and regulatory approval, is expected to close in the second half of 2019. The combined company's cash flow previous year, $36.5 billion, would have exceeded Exxon's.

BofA Merrill's Doug Leggate thinks "the upside from synergies, significant asset sales and de-risking of several aspects of APC's mix such as LNG development will transfer much of the remaining value uplift" to CVX; the firm upgraded CVX to Buy from Neutral with a $140 price target.

Chevron said the combined entity would have had daily output of 3.596 million barrels equivalent of oil past year, closing in on Shell's 3.666 million.

The acquisition comes as the USA has reversed a decades-long decline in oil production, thanks to new technology that has allowed it to tap hitherto unreachable, so-called "tight oil", that had been locked deep beneath the surface in shale rock.

Chevron Corp. shares were trading at $119.94 per share on Friday afternoon, down $6.05 (-4.80%).

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Shares of Anadarko surged 33 per cent, reflecting the 39 per cent premium offered by Chevron compared to Thursday's closing market price.

With the acquisition of the independent energy producer company, Chevron will become a more formidable challenger for other of "Big Oil" majors.

Chevron Chief Executive Mike Wirth has signaled in recent months that he was interested in potential deals.

Phil Flynn, senior market analyst with the PRICE futures group, said it's clear Chevron is investing in the shale revolution.

Anadarko submitted the second most applications for permits to begin drilling in Wyoming past year, but it trailed behind in actual production.

Based on Chevron's closing price on April 11, Anadarko shareholders will receive just under 0.4 shares of Chevron and $16.25 in cash for each Anadarko share, giving them around 9 percent of the merged company.

The company plans to add rigs for the Anadarko acreage, but still estimated a US$1 billion reduction of the combined capital spending of the two companies because of economies of scale, he added.

-Chevron will issue 200 million shares and pay US$8 billion in cash. Some of Anadarko's assets may be sold after the deal closes, the company said. Credit Suisse Group cut their price objective on shares of Anadarko Petroleum from $73.00 to $67.00 and set an outperform rating on the stock in a research report on Wednesday, February 6th. DNB Asset Management AS increased its stake in Anadarko Petroleum by 15.0% during the 1st quarter.

Evercore and Goldman Sachs are financial advisers to Anadarko, while Wachtell, Lipton, Rosen & Katz and Vinson & Elkins LLP are its legal advisers.

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