HOUSTON – (Realty News Report) – Chevron Corp. announced Monday that it has agreed to acquire Houston-based Noble Energy in an all-stock transaction valued at approximately $5 billion, or $10.38 per share.
The transaction would mark the largest takeover in the energy sector since the coronavirus pandemic affected the U.S. earlier this year.
Noble Energy holds substantial assets worldwide, including about 92,000 acres in the Permian Basin in West Texas.
Earlier this year Noble Energy employed roughly 2,300 people, but the company implemented furloughs and other cost-cutting measures after oil prices fell sharply, at one point even dipping below zero in the spring.
Noble Energy maintains its headquarters on the former Compaq Computer campus in northwest Houston, near the intersection of Louetta Road and Highway 249.
Chevron, which remains headquartered in California, also has a significant presence in Houston, occupying major towers downtown, including the former Enron headquarters building.
Noble Energy’s offshore, cash-generating operations in Israel bolster Chevron’s position in the Eastern Mediterranean. Noble Energy also strengthens Chevron’s U.S. unconventional footprint with de-risked acreage in the DJ Basin of Colorado, enhancing Chevron’s geographic diversity and resource base.
“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.”
Last year Chevron engaged in a bidding contest with Occidental Petroleum for Anadarko Petroleum. Occidental ultimately acquired Anadarko, a deal that left one of Anadarko’s 30-story office towers in The Woodlands largely vacant.
The future of Noble Energy’s suburban office space has not been decided. Chevron has recently consolidated hundreds of employees at its downtown Houston campus, and moving some of Noble’s workforce downtown could be considered as the companies integrate and the real estate implications of the acquisition become clearer.
“The combination with Chevron is a compelling opportunity to join an admired global, diversified energy leader with a top-tier balance sheet and strong shareholder returns,” said David Stover, Noble Energy’s chairman and chief executive officer.
In a statement, Stover said the Chevron offer “is the best way to maximize value for all Noble Energy shareholders.”
July 20, 2020 Realty News Report Copyright 2020
Caption: Chevron tower in downtown Houston. 2020 Copyright Photo by Ralph Bivins.
File: Chevron Buying Houston’s Noble Energy
