Chevron (CVX) has announced Monday that it will acquire Texas-based Noble Energy (NBL) in an all-stock transaction for $5 billion ($10.38 per share).
It’s the biggest energy deal to take place since the start of the COVID-19 pandemic, which has totally wiped out the oil industry and basically most others as well.
At the moment, Noble Energy is in the red for $8 billion. The total enterprise value of the transaction, once the debt is added, is $13 billion. But it doesn’t mean much in an industry where natural gas fields, new discoveries and deals between countries are the currency of skyrocketing stock buys.
By the time the ink dries, California-based Chevron will be a major player in Israel’s energy market, taking the place of Noble Energy as a partner with Delek Group (TASE: DLEKG) in operating the Tamar and Leviathan off-shore natural gas fields along Israel’s Mediterranean coast.
“Noble Energy brings low-capital, cash-generating offshore assets in Israel, strengthening Chevron’s position in the Eastern Mediterranean,” Chevron said in its release announcing the acquisition.
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“We have successfully repositioned our portfolio and executed on our strategy to improve capital efficiency and deliver shareholder value,” Noble Energy Chairman and CEO Dave Stover said in a statement on the company’s website.
The discovery and operation of the Tamar and Leviathan natural gas fields was a game-changer for Israel and for the region, but the infamous Israeli bureaucracy combined with the pesky political rebellion by the grassroots Islamist activist populations in Egypt and Jordan who fought to trash the energy deals signed with Israel by their leadership made life very difficult for the partnership.