Chevron Corporation has entered into a definitive agreement to acquire Hess Corporation in an all-stock transaction valued at $53 billion. This acquisition will bolster Chevron’s portfolio with Hess’s assets, particularly its 30% interest in the Stabroek Block in Guyana, a world-class resource with an estimated recoverable resource of more than 11 billion barrels of oil equivalent.

The transaction is expected to close in the first half of 2024, subject to Hess shareholder approval, regulatory approvals, and other customary closing conditions. Upon completion, Chevron will issue approximately 317 million shares of common stock to Hess shareholders. The deal represents a premium of approximately 10% based on Hess’s 20-day average closing price.

Mike Wirth, chairman and CEO of Chevron, stated that the acquisition of Hess strengthens Chevron’s long-term position and further diversifies its portfolio. He emphasized the strategic importance of the Stabroek Block and the value it brings to Chevron’s future production and cash flow.

Hess CEO John Hess commented that the transaction represents compelling value for Hess shareholders and positions the company to participate in Chevron’s future success. He highlighted the strategic alignment between the two companies and the benefits of combining their respective strengths.

Analysts view the acquisition as a positive move for Chevron, enhancing its growth prospects and providing access to a significant and growing resource base. The Stabroek Block is considered one of the most promising oil discoveries in recent years, and Chevron’s acquisition of Hess will give it a substantial stake in its development.

The acquisition is expected to be accretive to Chevron’s earnings per share and free cash flow within the first year after closing. Chevron plans to maintain its disciplined capital allocation framework and continue to prioritize shareholder returns.