Chevron to buy Nobel for $5B in biggest energy deal in 2020
Tuesday, July 21, 2020
Chevron announced Monday it plans to buy Nobel Energy in a $5 billion all-stock deal, setting itself up to close the biggest U.S. energy sector transaction this year, according to CNBC.
The company’s latest move is a result of its relative performance compared to other U.S. oil and gas companies, following historically low oil prices that have made assets cheaper.
The deal will also include access to Noble’s flagship Leviathan field, the largest natural gas field in the Eastern Mediterranean, which began producing natural gas late last year.
The offer values Noble at $10.38 a share or 0.12 Chevron share, a 7.5% premium to Noble’s Friday close. The deal would value Noble at roughly $13 billion, including debt.
Learn more: CNBC > Chevron picks Noble in biggest US energy deal since oil crash
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Shale FAQ
What is fracking?
Fracking is a slang term for hydraulic fracturing. Fracturing is a process by which highly pressurized fluid is pumped thousands of feet into the ground to fracture rock formations. The goal is to release the natural gas that’s locked inside the rock.
Is it safe?
What most concerns people about fracturing is ground water contamination. The worry is that fractures underground, caused by the process, will extending upwards and into aquifers, releasing gas and chemicals into the ground water supply. There’s been no confirmed reports of such a thing happening. Though surface spills and drill site blowouts can lead to localized environmental concerns.
Will my water catch on fire?
Flammable water is caused by the release of methane gas into a drinking water supply. Methane gas occurs naturally and can be released by any kind of drilling, including water wells. In Pennsylvania officials fined Chesapeake Energy $1 million for contaminating ground water with methane. It was determined that the company had not properly cemented it’s boreholes and gas migrated up the well, between rock and into aquifers.