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Chevron has reached a deal with Noble Midstream to acquire the shares in the pipeline operator it does not already own in an all-stock deal worth $1.32 billion. The agreement comes just a month after Chevron made a slightly smaller offer to purchase the 33.925 million shares. "We believe this buy-in transaction is the best solution for all stakeholders, enabling us to simplify the governance structure and capture value in support of our leading positions in the DJ and Permian Basins," said Colin Parfitt, vice president of Chevron Midstream and chairman of the board of the general partner of Noble Midstream Partners LP. Noble Midstream Partners is a master limited partnership formed by Noble Energy to own, operate, develop, and acquire midstream infrastructure assets. The bulk of the assets reside in the DJ Basin in Colorado, where the partnership's footprint spans across roughly 441,000 acres, and the Delaware Basin in Texas, where it has 110,000 dedicated acres in Reeves County. The final value under the new deal will depend on the price Chevron's shares are trading at when the deal closes, expected in the second quarter.
- North America > United States > Texas > Permian Basin > Delaware Basin (0.99)
- North America > United States > New Mexico > Permian Basin > Delaware Basin (0.99)
- North America > United States > Texas > Permian Basin > Yeso Formation (0.94)
- (24 more...)
Devon Energy and WPX Energy announced today that the two companies plan to merge in an all-stock deal that will create a shale producer with an estimated equity value of $12 billion. The combined company will move forward as Devon Energy and is to be led by a mixed boardroom and the current top boss of the Tulsa-based WPX. The headquarters will be in Oklahoma City, where Devon is already headquartered. Upon the deal's expected closing in the first quarter of next year, Devon shareholders will own about 57% of the combined entity while WPX shareholders will own the remaining stake. On a pro forma basis, the merged Devon is aiming for a year-end output of 280,000 B/D, which would make it the fourth-largest producer of tight oil in the US, according to a company release.
- North America > United States > Texas > Permian Basin > Yeso Formation (0.99)
- North America > United States > Texas > Permian Basin > Yates Formation (0.99)
- North America > United States > Texas > Permian Basin > Wolfcamp Formation (0.99)
- (24 more...)
Chevron announced last week a $14-billion budget for next year that reflects its need to complete a major project in Central Asia before it can unleash more of its capital power on the Permian Basin. The new figure also represents a significant reduction from the previously announced spending plan involving $19 to $22 billion. Chevron points out that the previous spending estimates did not take into account the cost of operating Noble Energy's assets, underlining the depth of the revised budget. The $4.1-billion all-stock acquisition of Noble, which was purchased for its fields in the Permian Basin and offshore Israel, was completed in October. The San Ramon, California-based supermajor said its long-term plan is to spend $14 to $16 billion annually from 2022 to 2025.
- North America > United States > Texas (0.85)
- North America > United States > New Mexico (0.85)
- North America > United States > California > Contra Costa County > San Ramon (0.26)
- North America > United States > Texas > Permian Basin > Yeso Formation (0.99)
- North America > United States > Texas > Permian Basin > Yates Formation (0.99)
- North America > United States > Texas > Permian Basin > Wolfcamp Formation (0.99)
- (24 more...)
The current economic downturn, comprising reduced capital expenditure, production shut-ins, depleted liquidity and bankruptcies, has created volumetric, contractual, and regulatory risk for US midstream operators, according to energy intelligence group Enverus. In a recent analysis, the company said outside of underlying asset economics and breakevens, midstream creditworthiness is exposed to operator solvency and the ability to raise capital. The company also assumes midstream providers remain exposed to operator bankruptcies from an assets and capital perspective, despite optimism that midstream company contracts will hold up in court. The number of bankruptcies in 2020 hasn't eclipsed 2Q 2016 during the previous economic downturn, but the intelligence group said it is unclear if bankruptcies this year will trigger more consolidation because liquidating assets from bankruptcy is less favorable. The bond market remains open, albeit for large, creditworthy counterparties such as integrated oil companies.
- Energy > Oil & Gas > Midstream (1.00)
- Banking & Finance (1.00)
- Government > Regional Government > North America Government > United States Government (0.70)
The US shale sector continues to reel from low oil prices that were sparked by the COVID-19 pandemic and a Saudi-Russia price war back in March. More than three dozen onshore oil and gas producers have since filed for bankruptcy protection in US courts. The process will enable most to restructure their balance sheets and exit the court-supervised protection with a fraction of their previous debt load. Operators in Texas, southern New Mexico, and North Louisiana are among those feeling the worst of the downturn and most say regional oil prices above $50/bbl will be needed to substantially increase drilling activity, according to a survey of upstream executives by the Federal Reserve Bank of Dallas. The Dallas Fed's energy survey was conducted in mid-September and is based on the responses of executives from more than 160 oil and gas firms in the US Eleventh District.
- Energy > Oil & Gas > Upstream (1.00)
- Banking & Finance (1.00)
- Government > Regional Government > North America Government > United States Government (0.90)