HOUSTON – (Realty News Report) – Chevron Corp. announced Monday that it has agreed to buy Houston-based Noble Energy, in an all-stock transaction valued at $5 billion, or $10.38 per share.
The deal would be the biggest energy company takeover since the coronavirus pandemic hit the U.S. earlier this year.
Noble Energy has vast energy assets around the world, including 92,000 acres in the Permian Basin of West Texas.
At the beginning of the year, Noble Energy had 2,300 employees but there have been furloughs and cutbacks following the crash of oil prices, which dipped below zero this spring.
Noble Energy has its headquarters around for former Compaq Computer campus in northwest Houston, near the intersection of Louetta Road and Highway 249.
Chevron, which continues to be based in California, occupies major towers in downtown Houston, including the former headquarters building for Enron.
Noble Energy also has cash-generating offshore assets in Israel, strengthening Chevron’s position in the Eastern Mediterranean. Noble Energy also enhances Chevron’s leading U.S. unconventional position with de-risked acreage in the DJ Basin of Colorado.
“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 locked up in a bidding war with Occidental Petroleum to buy Anadarko Petroleum. Occidental ended up buying Anadarko, which resulted in one of Anadarko’s 30-story office towers in The Woodlands becoming largely vacant.
The future status of Noble’s suburban office space was not immediately determined. But recently Chevron has consolidated hundreds of employees to its downtown campus and the issue of relocating Noble’s people to downtown Houston might be discussed as a future option as the real estate impact of Chevron buying Houston’s Noble Energy unfolds.
“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 CEO.
In a press release, Stover said the Chevron buy-out “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