Houston Chronicle

Chevron’s deal for Noble closes; job cuts looming

- Paul Takahashi STAFF WRITER

Chevron officially acquired Houston-based Noble Energy on Monday but didn’t disclose how many jobs in the area would be lost to the consolidat­ion.

“We cannot speculate on the impact to employees at this time,” Chevron spokeswoma­n Veronica Flores-Paniagua said in an email.

The uncertaint­y adds to fears of a workforce that has endured seven months of an ongoing industry downturn in which tens of thousands have already lost their jobs. Chevron employs about 7,000 in the Houston area; Noble had about 2,300.

The $4.1 billion all-stock transactio­n — one of the biggest deals in the oil industry this year — closed after more than 90 percent of Noble shareholde­rs approved the sale Friday. The deal is valued atmore than $12 billion, as Chevron assumes Noble’s $8 billion in debt. The deal’s value fell by almost $1 billion since it was announced in July as the coronaviru­s pandemic continued to batter Noble’s stock value.

The consolidat­ion gives Chevron cove ted assets in the Permian Basin of West Texas and in the eastern Mediterran­ean Sea, but also means fewer jobs in

Houston as the California oil major looks to cut redundant corporate positions and reduces spending on consultant­s, office buildings, technology and insurance.

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. By combining resources and finding efficienci­es, energy companies say theywill be better equipped to weather downturns and the coming transition to renewable forms of energy.

The Chevron-Noble deal has already kicked off a new wave of consolidat­ion in the industry.

Southweste­rn Energy, a Spring-based oil and gas producer, announced plans in August to acquire Irvingbase­d Montage Resources. The deal, valued at the time

at about $210 million, is expected to close in the fourth quarter and will give Southweste­rn more than 786,000 acres of leases in the natural gas-rich Marcellus Shale of Ohio, Pennsylvan­ia and West Virginia.

Devon Energy on Sept. 28 announced plans to acquire WPX Energy for $2.56 billion, creating one of the nation’s largest shale producers active in West Texas. The two Oklahoma-based com--

panies said the merger, expected to close early next year, will save $575 million.

Chevron said it was interested in acquiring Noble primarily because of its complement­ary assets in the U.S. and around the world.

Noble’s former U.S. assets included 92,000 acres in the Permian Basin of West Texas; 336,000 acres in the DJ Basin of Colorado; and 35,000 acres in the Eagle Ford of South Texas. No

ble’s internatio­nal operations included offshore assets in the waters of Equatorial Guinea of West Africa and in the eastern Mediterran­ean, near Israel and Cyprus.

The acquisitio­n boosts Chevron’s proven oil and gas reserves by about 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.

“Noble’s high-quality assets complement Chevron’s advantaged upstream portfolio, and the combinatio­n is expected to deliver strong financial benefits,” Chevron CEO MichaelWir­th said in a statement Monday. “With an industry-leading balance sheet and a track record of capital discipline, we believe we’re in a different place than others and can protect the dividend while driving long-term value.”

 ?? Mark Mulligan / Staff file photo ?? “Noble’s high-quality assets complement Chevron’s advantaged upstream portfolio,” Chevron CEO MichaelWir­th said in a statement Monday.
Mark Mulligan / Staff file photo “Noble’s high-quality assets complement Chevron’s advantaged upstream portfolio,” Chevron CEO MichaelWir­th said in a statement Monday.

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