Saturday, December 9, 2023

Chevron will pay more than 7,000 million for PDC Energy

US oil company Chevron Corporation has reached an agreement for the acquisition of 100% of the producer PDC Energy for a total amount of US$6,300 million (€5,829 million) in shares, which will rise to US$7,600 million (€7,031 million) when including the company’s debt, whose purchase will strengthen the company’s position in the shale oil segment.

Under the agreed conditions and the closing price of Chevron shares on May 19, PDC shareholders will receive 0.4638 Chevron shares for each PDC share. Collectively, Chevron will issue approximately 41 million shares of common stock.

The transaction, which represents a 14% premium over the average price of PDC’s shares over the previous ten sessions, has been unanimously approved by the boards of directors of both companies and is expected to close by the end of 2023, subject to approval from PDC shareholders and regulators.

“PDC’s attractive and complementary assets strengthen Chevron’s position in key production basins of USA.”, said Chevron Chairman and CEO Mike Wirth, who said the transaction furthers Chevron’s goal of safely delivering higher yields and fewer carbon emissions. carbon.

In this sense, Chevron anticipates that the transaction will add around US$1,000 million (€925 million) in annual free cash flow at a Brent price of 70 dollars a barrel, while the oil company expects to increase its capital expenditures by around 1,000 million dollars a year, raising its forecast range to between US$14,000 and 16,000 million (€12,953 and 14,803 million) for 2027.

On the other hand, Chevron expects the transaction to achieve cost synergies of around $100 million (€93 million) before tax within one year of closing the transaction.


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