Chevron to acquire PDC Energy in $6.3B all-stock deal

Chevron Corporation (NYSE: CVX) has announced its definitive agreement to acquire PDC Energy, Inc. (NASDAQ: PDCE) in a landmark all-stock transaction valued at $6.3 billion, equivalent to $72 per share, Azernews reports, citing international media outlets.

As the multinational energy corporation reports, under the terms of the agreement, each outstanding share of PDC will be exchanged for 0.4638 shares of Chevron. Based on Chevron's closing price on May 19, 2023, the deal offers an attractive proposition to PDC shareholders.

This strategic acquisition positions Chevron to benefit from PDC's portfolio of high-quality assets situated in lower carbon intensity basins across the United States. The assets are expected to generate superior returns for Chevron.

Notably, PDC brings to the table robust free cash flow, production with low breakeven costs, and promising development opportunities adjacent to Chevron's existing presence in the Denver-Julesburg (DJ) Basin. Furthermore, the transaction adds valuable acreage to Chevron's already prominent position in the Permian Basin, reinforcing its industry-leading position.

By expanding its footprint in these key basins, Chevron aims to capitalize on the significant growth potential and leverage synergies to enhance operational efficiencies. The acquisition aligns with Chevron's strategic focus on sustainable and responsible energy development, while further diversifying its portfolio and strengthening its competitive edge in the market.

The transaction is subject to customary closing conditions and regulatory approvals. Upon completion, Chevron's acquisition of PDC Energy will mark a significant milestone in the company's pursuit of growth opportunities and its commitment to delivering long-term value to shareholders.