Author: Sheila Dang
Houston (Reuters) -The renewal of Chevron is solving one of the biggest problems suffering from the US Major: where its growth will be from the next few years.
On Friday, the US oil manufacturer closed the $ 55 billion Hess acquisition of the largest oil and gas transactions of all time – and acquired the latter’s Gyayana Staberek Bloc after the legal fight with the larger competitor Exxon Mobil.
Before the transaction was closed, the concern was due to the prospects for the financial and production growth of Chevron, and oil and gas stocks decreased to at least a decade.
The Staberek block has at least 11 billion barrels of oil equivalent and is one of the most significant oil discovery over several decades.
“The combination increases and extends our growth profile until the next decade,” said Mike Wirth, CEO of Chevron on Hess’s closure.
Some investors cheered on expansion as they increased the long -term prospects of the company.
“Acquisition connection is a free cash flow hole that Chevron appeared in the late 2030s of this decade,” said LSEG data, the manager of the American Century Investments portfolio David Byrns, according to LSSEG data, is $ 351 million. USD position Chevron.
In addition to HES, it is unclear how Chevron could maintain free cash flow, he said, adding that acquisition will also help Chevron support its dividends in the 2030s.
Stephanie Link, Hightower Advisors Advisory Company’s Chief Investment Strategist, said she was considering adding Chevron to her portfolio, as its shares have fallen and have 4.5% dividend yields in recent years.
“The most important thing is that Chevron now acquires access to one of the fastest growing and cheapest oil in the world,” she said.
The shares fall
Closing is a great need for Chevron after a few difficult months, during which it has declared global relief, faced with emerging security issues, and lost exports from Venezuela. Her shares have fallen by 7.5%in recent years. On Friday afternoon, they decreased by 1.6%.
Chevron Oil and Gas Reserve or Quantity it can extract from its oil and gas deposits, 2024. At the end of the 19th century, it decreased to 9.8 billion Boe, the lowest point in at least a decade.
Its ecological stock change ratio is how much new oil and gas have been added to stock compared to its amount and not included in the acquisition and sale, was only 45%. A 100% or more ratio means that the company changes its reserves with the same rate it depletes.