Noble Energy delisted after acquisition by Chevron

Chevron has completed its all-stock acquisition of Noble Energy, whose shares have now been delisted from the NYSE. The stock was acquired for $5 billion. Including debt, the enterprise value of the transaction was $13 billion.



Noble’s primary assets are in the Eastern Mediterranean sea (Israel and Cyprus).  These will fit well with Chevron’s assets in Egypt. Noble also has 92,000 contiguous net acres in the Permian which are next to Chevron’s acreage. Noble also has 336,000 of net acres in the DJ Basin in Colorado. This would be a new onshore basin for Chevron.

Board sought to reduce debt in 2019

The deal was first announced in July 2020. Chevron also acquired Noble’s 63% stake in publicly-traded Noble Midstream Partners.

In July 2019. the Board of Noble decided to explore a sale of its interest in Noble Midstream in order to reduce leverage and explore potential transactions to reduce the company’s concentration risk in the Eastern Mediterranean.

In the fall of 2019, the company received offers from a strategic midstream operator and a private-equity-backed entity to purchase Noble Midstream. However, both offers were not acceptable.

At an industry event in October 2019, Kevin Haggard, Noble’s Treasurer met Frank Mount, General Manager of M&A for Chevron. Mr Mount requested a meeting with Noble regarding the Mediterranean assets. Discussions moved slowly over the next few months.

Pandemic spurred sale of company

After the pandemic hit, the Noble Board hired J.P Morgan to review strategic alternatives and the discussions with Chevron morphed into an outright purchase. Noble contacted 9 other E&P operators to see if they were interested in acquiring the company. Nobody was interested in getting into a bidding war, either for strategic reasons or because of Noble’s high debt levels.

Golden Parachutes

Under the terms of the merger agreement, David Stover, the CEO of Noble is in line to receive $25.2 million in severance and vested equity. COO Brent Smolik will get $14.1 million, while CFO Ken Fisher will get $8.6 million. These payments will be triggered if their employment is terminated within two years following a change in control.

In connection with the merger, Mr Smolil has resigned as CEO of Noble Midstream, He will be replaced by COO Robin Fielder. She joined the company in January 2020, having previously worked at Anadarko.

I’ve deleted Noble Energy from the list of Houston-area public companies, but added Academy Sports + Outdoors, following its IPO launch last week. Oasis Petroleum, which filed for bankruptcy last week, is scheduled to be delisted next week. You can see the complete list here

 

SEC filing – Chevron completes Noble acquisition

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