GulfSlope Energy Inc (GSPE)

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Chevron Buyout Highlights Renewed Focus On Production Growth

A few excerpts: 

Any new merger announcement as sizable as Monday’s announced deal between Chevron and Hess inevitably invites comparisons to other recent deals of similar size. The obvious comparison point for this buyout is the deal between ExxonMobil and Pioneer Natural Resources announced less than two weeks earlier.

Andrew Dittmar, Senior Vice President at Enverus Intelligence Research (IER) said in an email that, “the common thread connecting these deals is majors looking to refill their pipelines to maintain production against a declining asset base as they anticipate their legacy businesses staying profitable into the 2030s.” Even more than that, Dittmar adds that the deal “indicates buyers are starting to place a higher focus on growth after years of solely looking to grow shareholder distributions.”

What it all appears to signal is that oil majors, after years of seemingly accepting a shrinking fate in their legacy business ventures, now see a landscape featuring rising demand for their production for decades to come and are investing to ensure they are able to meet those demands.

The bottom line is obviously, these deals by Chevron and ExxonMobil will place pressure on their competitors both in U.S. shale and internationally to respond with deals of their own designed to enable long-term growth in their own legacy oil and gas business segments. Potential buyers and sellers are always present in the upstream industry, and many will speculate about which will become involved in future mergers and buyouts.

Link to article:

https://www.forbes.com/sites/davidblackmon/2023/10/24/chevron-buyout-of-hess-highlights-renewed-focus-on-production-growth/?sh=424ce2dd4126&utm_source=substack&utm_medium=email




Mrs. Smith