Chevron to acquire PDC Energy Inc. for $7.6 billion

Published: May. 22, 2023 at 9:53 PM CDT
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MIDLAND, Texas (KOSA) - Chevron has entered into a definitive agreement to acquire PDC Energy Inc.

The stock and debt transaction totals to $7.6 billion.

President of Cargile Investment Management Mickey Cargile says this is the second deal Chevron has done in the past three years.

“Chevron has so much extra cash right now because they’re producing so much oil and gas, the nation’s largest producer of oil and gas, so this is a smart way for them to keep replacing their reserves,” said Cargile.

“PDC’s attractive and complementary assets strengthen Chevron’s position in key U.S. production basins. This transaction is accretive to all important financial measures and enhances Chevron’s objective to safely deliver higher returns and lower carbon,” said Chevron Chairman and CEO Mike Wirth in a news release.

Last year Chevron was producing about 140,000 barrels per day in the DJ basin, after acquiring PDC they expect production in 2024 to increase to 400,000 barrels a day.

According to Chevron this will add a billion barrels of resources at less than $7 a barrel.

“Your going to continue to see these types of deals that the large companies the Exxons and Chevrons will continue to acquire the smaller companies and that’s just a smart way for them to replace their reserves but also helps make a cash event for the companies they are acquiring,” said Cargile.

“This transaction will bring two of the basin’s best operators together, and we believe enable continued output growth, lower operational costs, environmental stewardship, and value creation for years to come,” said PDC Energy’s President and CEO Bart Brookman in a media call earlier today.

Chevron expects this would raise their annual capex by $1 billion to $14 to $16 billion per year through 2027.

Wirth also noted that Chevron has a track record of successfully integrating companies and they look forward to welcoming PDC employees to join them in delivering lower carbon energy to a growing world.