Chevron acquires Noble Energy for $5 billion, biggest purchase since beginning of pandemic

FILE - This Oct. 8, 2019, file photo the logo for Chevron appears above a trading post on the floor of the New York Stock Exchange. Chevron turned a profit in the first quarter. But the company warned, Friday, May 1, 2020, its financial picture is likely to be depressed in the future because of reduced demand caused by the coronavirus. (AP Photo/Richard Drew, File) (Richard Drew, Copyright 2019 The Associated Press. All rights reserved)

SAN RAMON, California – Chevron announced Monday morning that the company plans to acquire Noble Energy for $5 billion, making it the biggest energy deal since the beginning of the coronavirus pandemic.

In a statement Monday, the total enterprise value and transaction was $13 billion, which included pending debts from Noble Energy. Noble shareholders will also receive 100% of their stock totaling 58 million shares from Chevron, which began in the red Monday morning, dipping down from 2.7% according to CNN Business.

With Chevron’s acquisition, Noble Energy’s assets will expand from West Texas, Delaware and New Mexico, to Israel and West Africa, bringing growth opportunities, according to the statement.

The transaction was approved by Board of Directors of both companies and is expected to close in the fourth quarter of 2020, the company said. The acquisition is subject to approval from Noble Energy shareholders.

“Our strong balance sheet and financial discipline gives us the flexibility to be a buyer of quality assets during these challenging times,” said Chevron Chairman and CEO Michael Wirth. “This is a cost-effective opportunity for Chevron to acquire additional proved reserves and resources. Noble Energy’s multi-asset, high-quality portfolio will enhance geographic diversity, increase capital flexibility, and improve our ability to generate strong cash flow.”

According to CNN Business, Noble Energy’s debt and “proven undeveloped reserves” became an attractive and cheap buy for Chevron.

Noble Energy will own 3% of the combined company, according to Chevron in a statement.

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A graduate of the University of Houston-Downtown, Ana moved to H-Town from sunny southern California in 2015. In 2020, she joined the KPRC 2 digital team as an intern. Ana is a self-proclaimed coffee connoisseur, a catmom of 2, and an aquarium enthusiast. In her spare time, she's an avid video gamer and loves to travel.