Deal raises Chevron Middle East profile with Israel entry
Adds 18% to Chevron reserves across US shale, Israel
London — Chevron is to buy Houston-based oil and gas producer Noble Energy in a $5-billion deal that marks its entry into the East Mediterranean gas sector as it becomes operator of Israel's Leviathan field, as well as bringing additional US shale resources.
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Register NowThe purchase "provides Chevron with low-cost, proved reserves and attractive undeveloped resources that will enhance an already advantaged upstream portfolio. Noble Energy brings low-capital, cash-generating offshore assets in Israel, strengthening Chevron's position in the Eastern Mediterranean," Chevron said in a statement.
"Noble Energy also enhances Chevron's leading US unconventional position with de-risked acreage in the Denver-Julesburg Basin and 92,000 largely contiguous and adjacent acres in the Permian Basin."
Given Noble's debt sizable debt obligations, the "enterprise value" of the deal is $13 billion, Chevron said.
"Our strong balance sheet and financial discipline gives us the flexibility to be a buyer of quality assets during these challenging times," Chevron chairman and CEO Michael Wirth said. "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."
Noble launched gas production from Israel's Leviathan field last year, and began exporting the Israeli gas to Egypt and Jordan in January, in a deal that broke new ground for the Middle East energy sector. Egypt is an emerging exporter of East Mediterranean gas in the form of LNG.
Chevron added the deal will increase its oil and gas reserves by 18% compared with the year-end 2019 at an average cost of under $5 per barrel of oil equivalent. It said it would also gain 7 billion barrels of "risked resources," a secondary measure of oil and gas holdings, for $1.50/boe.
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July 20, 2020 at 06:29PM
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Chevron buys East Med gas producer, shale driller Noble Energy for $5 billion - S&P Global
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