FPU Moored Landscape.JPG

Chevron Corp.'s Jack/St. Malo project operates in deepwater Gulf of Mexico. Chevron is buying Noble Energy and with it proven reserves and  cash-generating offshore assets in Israel, strengthening the company's position in the Mediterranean. Noble's portfolio will also add to Chevron’s U.S. acreage in the Permian Basin in Texas and New Mexico and in Colorado’s DJ Basin.

Chevron will take over Noble Energy for $5 billion in the first big deal announced since the coronavirus pandemic shook the energy sector.

The total value of the deal is $13 billion, with Chevron assuming Noble’s debt.

Chevron has been shopping for assets since last year and with crude prices down more than 30% this year, it jumped Monday with its all-stock offering for the independent Houston oil and gas driller.

The acquisition brings to Chevron low-cost, proven reserves in addition to cash-generating offshore assets in Israel, strengthening the company's position in the Mediterranean. Noble's portfolio will also add to Chevron’s U.S. acreage in the Permian Basin in Texas and New Mexico and in Colorado’s DJ Basin.

Chevron already is one of the top leaseholders in the deepwater Gulf of Mexico, and has been developing oil and gas resources there for more than 80 years. Its Gulf of Mexico business unit is headquartered in Covington and maintains a significant presence in Houston. Offshore operations are also supported by onshore facilities located across southeastern Louisiana and in Mississippi, the company's website says.

With acquisition, Noble said it no longer has assets or an office in Louisiana, having operated one in Lafayette. It began drilling onshore in the 1930s and offshore by the late 1960s, according to regulatory filings. It was active in the early 2000s and had assets in the Haynesville shale in northwest Louisiana that it sold in 2014 to Dallas-based Aethon Energy. Noble Energy sold its deepwater oil and gas assets in the Gulf of Mexico to Houston-based Fieldwood Energy LLC for more than $700 million in 2018.

Other big players, seeking to cut costs and load up on assets, will likely follow Chevron's lead, said Gianna Bern, a finance professor at the University of Notre Dame’s Mendoza College of Business.

“This is the first wave of acquisitions," Bern said.

Last year, as it pursued potential buyout targets, Chevron lost out when Occidental Petroleum made a $38 billion deal for one of them, Anadarko, even though Chevron is five times the size of Occidental.

While Occidental's valuable holdings in the Permian Basin of west Texas and New Mexico appeared to be a good match, Chevron said at the time that it favored discipline over “winning at any cost.”

It's found another match in Noble Energy.

“Noble Energy’s multi-asset, high-quality portfolio will enhance geographic diversity, increase capital flexibility, and improve our ability to generate strong cash flow," said Chevron Chairman and CEO Michael Wirth. "These assets play to Chevron’s operational strengths, and the transaction underscores our commitment to capital discipline.”

Acadiana Business Today: Jobless workers worry about end of expanded unemployment benefits