Chevron’s deal for Noble closes; job cuts looming
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.”