The acquisition provides development opportunities adjacent to Chevron's position in the Denver-Julesburg (DJ) Basin and additional acreage to Chevron's leading position in the Permian Basin.
The deal, valued at $72 per share, will add $1 billion to annual free cash flow. It will add new drilling inventory to Chevron's U.S. oil and gas reserves.
Based on Chevron's closing price on May 19, 2023, PDC shareholders will receive 0.4638 shares of Chevron for each PDC share.
In addition, the deal increases Chevron's proved reserves by 10% at an acquisition cost under $7 per barrel of oil equivalent.
The transaction is expected to achieve run-rate cost synergies of around $100 million before tax within a year of closing.
The deal is expected to close by year-end 2023.
Chevron will realize about $400 million in capex efficiencies post-closing.
Chevron expects to increase capex by ~$1 billion per year, raising its guidance range to $14 to $16 billion through 2027.
Price Action: CVX shares are trading lower by 1.90% to $152.30 on the last check Monday. PDCE shares are up by 8.47% to $70.64.
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