Chevron To Acquire PDC Energy In $7.6B Deal

• Chevron Corporation (NYSE: CVX) inked a pact to acquire PDC Energy, Inc. (NASDAQ: PDCE) in an all-stock deal worth $7.6 billion, including debt.

• 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.

• Photo via Wikimedia Commons

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