Noble shareholders OK sale to Chevron
Noble Energy shareholders Friday approved Chevron’s offer to acquire the Houston oil and gas company, paving the way for the $13 billion deal to close soon.
More than 90 percent of Noble shareholders voted in favor of the merger proposal, according to a company filing with the Securities and Exchange Commission.
“We are pleased that Noble Energy shareholders resoundingly support the pending transaction with Chevron,” Noble CEO David Stover said in a statement. “Today’s approval marks an important milestone on the path to becoming part of an even stronger global energy platform. We thank our shareholders and other stakeholders for recognizing the many benefits that will be realized, and the significant value that will be created, through this combination.”
Noble shareholders approved the Chevron deal in spite of several legal challenges from investors, including from billionaire Paul Singer’s New York-based hedge fund Elliott Management Corp. Some investors argued that Noble would be better off independent, while others raised concerns about executive com
pensation.
But ultimately, oil and gas companies are increasingly looking to consolidate operations as they face the prospect of low oil prices for years and declining demand for fossil fuels amid climate change concerns. The idea behind this new wave of consolidation is that larger companies may be better equipped to weather the oil downturns and the coming energy transition.
Devon Energy on Monday announced plans to acquire WPX Energy for $2.56 billion, creating one of the nation’s largest shale producers in West Texas. The two Oklahoma-based companies said the merger is expected to save $575 million in costs and is expected to close in the first quarter of 2021.
Chevron said it was interested in acquiring Noble primarily because of its complementary assets both in theU.S. and around the world.
Noble’s U.S. assets in
clude 92,000 acres in the Permian Basin ofWest Texas; 336,000 acres in the DJ Basin of Colorado; and 35,000 acres in the Eagle Ford of South Texas. Noble’s international operations also include offshore assets in the waters of Equatorial Guinea of West Africa and the eastern Mediterranean near Israel and Cyprus.
The acquisition also will boost Chevron’s proven oil and gas reserves by 18 percent. About 75 percent of Noble’s proven crude reserves of 2 billion barrels is already developed, allowing Chevron to quickly generate revenue without spending much capital.
The merger of the two companies is expected to save $300 million in operating costs one year after closing, Chevron said, as it cuts redundant corporate positions and reduces costs for consultants, office buildings, technology and insurance.
Noble stock rose 1.4 percent to $8.46 a share Friday.