7/31/2023 0 Comments Greed corp engine![]() ![]() Another basin, the Anadarko-Woodford in Oklahoma, has probably peaked too. Of the five major American shale basins, two – where the revolution largely originated - are already past their prime: production in the Bakken, in North Dakota, and the Eagle Ford, in southern Texas, has peaked. From a business perspective, the question isn’t why Chevron is buying, but why PDC is selling. Yet, there’s a strategic angle to it too. The purchase speaks volumes about the geographical and business shift ongoing in the US shale industry. The company expects the transactions to be accretive to its shareholders immediately, adding about $1 billion to its annual free cash flow, a number that may go up as the synergies could be significantly larger than what Chevron indicated. PDC wasn’t an exception, and Chevron has bought oil and gas reserves relatively cheap, paying about $7-a-barrel for the inventory. Certainly, Chevron appears to have taken advantage of the fact that any oil company heavily exposed to Colorado tends to trade at a discount due to investor worries about environmental regulatory risk. In its much better-known Permian location, it’s pumping about 800,000 barrels a day.On the surface, the deal may look more opportunistic than strategic. ![]() If the deal closes by year end, as expected, Chevron would pump about 360,000 barrels of oil equivalent a day there, quickly approaching 400,000 barrels a day by 2024. Dig deeper, however, and the scale of the new business is evident. Almost out of the blue, the DJ basin will become one of Chevron’s top-five assets in terms of production and free cash flow. Together, the two relatively small all-stock deals will transform Chevron into the largest oil and gas producer in the so-called Denver-Julesburg shale basin, which spreads across Colorado, Nebraska and Wyoming.In Chevron-speak, the DJ basin ads “another piston” to its already strong shale engine.The location may surprise, because Colorado tends to fall under the radar of Wall Street, and the state is seen as more risky from a regulatory point of view than Texas or even New Mexico. ![]() second, on Monday, it announced a $6.3 billion deal to buy PDC Energy Inc. Retrieved February 17, 2023.First, it was the $5 billion deal in 2020 to acquire Noble Energy Inc. " 'Greed Corp' HD for iPad Review – Scorched Earth is Profitable in this Strategy Board Game".
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |