Chevron buys Hess Corp. for $53 billion in an all-stock deal

Chevron said Monday it will buy smaller rival Hess in a $53 billion all-stock deal, as the oil major looks to increase its presence in oil-rich Guyana.

The deal puts two of the largest oil giants, Chevron and ExxonMobil, face to face in two of the world’s fastest-growing oil basins – shale and Guyana.

Guyana has become a major oil producer in recent years after huge discoveries made by ExxonMobil, its partner Hess, and the Chinese company CNOOC, which together produce 400,000 barrels per day from two offshore ships, and said it could develop up to 10 offshore projects.

To buy Hess, Chevron is offering $171 per Hess share, which means a premium of about 4.9% to the stock’s last close.

CEO John Hess of Hess Corp. is expected to join Chevron’s board of directors once the deal closes around the first half of 2024.

The combined company is expected to grow production and free cash flow faster and for longer than Chevron’s current five-year guidance, the companies said.

“With increased confidence in expected long-term cash generation, Chevron intends to return more cash to shareholders with higher growth in dividends per share and increased share repurchases,” Pierre Preber, Chevron’s chief financial officer, said in a statement.

The deal comes weeks after rival Exxon submitted a $60 billion offer to buy Pioneer Natural Resources, making it the largest producer in the largest American oil field.