We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Noble (NBL) to be Acquired by Chevron in All-Stock Deal
Read MoreHide Full Article
Noble Energy has entered into a definite agreement to be acquired by Chevron Corporation (CVX - Free Report) . Chevron is set to acquire all outstanding shares of Noble in an all-stock transaction valued at $10.38 per share or nearly $5 billion. The deal’s total enterprise value will be $13 billion, including the assumption of Noble’s existing debt.
Per the deal, Noble shareholders will receive 0.1191 shares of Chevron for each Noble share. Chevron will issue 58 million shares for the deal and Noble’s shareholders will own 3% of the combined company, post closure of the deal.
What Will Noble Shareholders Receive?
Per management of Noble, this deal was the best way to maximize shareholder value. The transaction price reflects a premium of around 12% on a 10-day basis, based on the closing stock price on Jul 17, 2020.
The premium looks lucrative for shareholders, considering the fact that shares of Noble lost nearly 60.8% of its value from the beginning of 2020 till July 17, 2020.
What Will Noble Offer to Chevron?
This deal, if approved by shareholders of Noble and gets all the necessary regulatory approvals, will close in fourth-quarter 2020 and boost Chevron’s presence in the resource-rich U.S. basin and Eastern Mediterranean region. This combination is expected to result in cost synergies of $300 million and be accretive to Chevron’s free cash flow, earnings, as well as book returns, one year after the closure of the transaction.
Based on Noble’s proved reserves at year-end 2019, this will add nearly 18% to Chevron’s year-end 2019 proved oil and gas reserves at an average acquisition cost of less than $5/barrels of oil equivalent (boe), and almost 7 billion barrels of risked resource for less than $1.50/boe.
Internationally, Noble’s offshore Israel holding and assets in Equatorial Guinea will expand Chevron’s international presence.
Deal Boosts Chevron’s Permian Presence
The price and demand of oil have dropped significantly from the beginning of the year due to the novel coronavirus outbreak and the resultant lockdown. However, the rising probability of the development of vaccine for the virus and opening of economic activities observing safety norms will gradually increase the demand for oil.
This deal in a way will allow Chevron to expand presence in the Permian Basin. It has been trying to expand in resource-rich onshore basins. Last year, Occidental Petroleum (OXY - Free Report) outbid Chevron to acquire Anadarko.
As the current market scenario is not favorable and most of the large oil and gas companies are trying to preserve liquidity amid this unprecedented economic crisis, this deal might not attract any rival bid.
Price Performance
Noble’s shares have outperformed the industry in the past three months.
Zacks Rank and Another Key Pick
Currently, Noble carries a Zacks Rank #2 (Buy). Another top-ranked stock in the same space is Bonanza Creek Energy, Inc. , sporting a Zacks Rank #1 (Strong Buy).
Bonanza Creek delivered an average earnings surprise of 8.7% in the last four quarters. The Zacks Consensus Estimate for 2020 earnings has moved up 4.3% in the past 60 days to $2.65 per share.
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2021. Click here for the 6 trades >>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Noble (NBL) to be Acquired by Chevron in All-Stock Deal
Noble Energy has entered into a definite agreement to be acquired by Chevron Corporation (CVX - Free Report) . Chevron is set to acquire all outstanding shares of Noble in an all-stock transaction valued at $10.38 per share or nearly $5 billion. The deal’s total enterprise value will be $13 billion, including the assumption of Noble’s existing debt.
Per the deal, Noble shareholders will receive 0.1191 shares of Chevron for each Noble share. Chevron will issue 58 million shares for the deal and Noble’s shareholders will own 3% of the combined company, post closure of the deal.
What Will Noble Shareholders Receive?
Per management of Noble, this deal was the best way to maximize shareholder value. The transaction price reflects a premium of around 12% on a 10-day basis, based on the closing stock price on Jul 17, 2020.
The premium looks lucrative for shareholders, considering the fact that shares of Noble lost nearly 60.8% of its value from the beginning of 2020 till July 17, 2020.
What Will Noble Offer to Chevron?
This deal, if approved by shareholders of Noble and gets all the necessary regulatory approvals, will close in fourth-quarter 2020 and boost Chevron’s presence in the resource-rich U.S. basin and Eastern Mediterranean region. This combination is expected to result in cost synergies of $300 million and be accretive to Chevron’s free cash flow, earnings, as well as book returns, one year after the closure of the transaction.
Based on Noble’s proved reserves at year-end 2019, this will add nearly 18% to Chevron’s year-end 2019 proved oil and gas reserves at an average acquisition cost of less than $5/barrels of oil equivalent (boe), and almost 7 billion barrels of risked resource for less than $1.50/boe.
Internationally, Noble’s offshore Israel holding and assets in Equatorial Guinea will expand Chevron’s international presence.
Deal Boosts Chevron’s Permian Presence
The price and demand of oil have dropped significantly from the beginning of the year due to the novel coronavirus outbreak and the resultant lockdown. However, the rising probability of the development of vaccine for the virus and opening of economic activities observing safety norms will gradually increase the demand for oil.
This deal in a way will allow Chevron to expand presence in the Permian Basin. It has been trying to expand in resource-rich onshore basins. Last year, Occidental Petroleum (OXY - Free Report) outbid Chevron to acquire Anadarko.
As the current market scenario is not favorable and most of the large oil and gas companies are trying to preserve liquidity amid this unprecedented economic crisis, this deal might not attract any rival bid.
Price Performance
Noble’s shares have outperformed the industry in the past three months.
Zacks Rank and Another Key Pick
Currently, Noble carries a Zacks Rank #2 (Buy). Another top-ranked stock in the same space is Bonanza Creek Energy, Inc. , sporting a Zacks Rank #1 (Strong Buy).
Bonanza Creek delivered an average earnings surprise of 8.7% in the last four quarters. The Zacks Consensus Estimate for 2020 earnings has moved up 4.3% in the past 60 days to $2.65 per share.
You can see the complete list of today’s Zacks #1 Rank stocks here.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2021.
Click here for the 6 trades >>