Drama in the gas market: the energy giant misfortune Offers to purchase the Noble Energy, Which owns the Tamar and Whale reservoirs, about $ 5 billion, according to the Wall Street Journal. Chevron’s proposal – which is in fact a takeover of Noble – was submitted against the background of Noble’s difficulties as a result of the Corona crisis. As long as Noble shareholders approve the offer, it will be the biggest deal in the oil market since the Corona plague began.
Chevron promotes takeover in cash and stock deal. It is offering to buy Noble shares at $ 10.38 a share or 0.1191 Chevron shares – a premium of about 7.6% compared to the closing price of Noble shares on Friday ($ 9.65) and about 12% based on the average of the last ten trading days. Weighted by Noble’s heavy debts, the value of the deal will amount to about $ 13 billion.
The corona crisis hit Noble Energy. The company is facing a drop in its cash flows due to the fall in the price of oil and the damage to the oil shale industry in the US, where Noble is very active. Since the beginning of the year, Noble has fallen 60% $ 20 billion in 2015.
Noble suffered a heavy accounting loss (GAAP) of $ 4 billion in the first quarter of 2020. Since 2015, Noble has lost a total of $ 10 billion. The losses eroded equity to $ 4.4 billion at the end of March 2020, compared to $ 8.4 billion at the end of March 2019.
Noble – led by David Stober – has a large exposure to oil shale oil production activity in the United States, which becomes a loss when the price of oil falls below a level of about $ 35. Its debt of $ 1.8 billion.In 2017, Noble acquired Clayton Williams for $ 2.7 billion – at a 50% market premium.
Following the situation in the oil and gas market, Noble has announced a reduction in its investment budget for 2020 by more than 50% to $ 850-750 million. In addition, the company cut the dividend for the first quarter; Cut 20% -10% in executive pay; And implements an expense efficiency plan. In April, Noble spent 30% of its workforce in the United States, and it is estimated that it will work to increase its workforce.
Following Chevron’s takeover of Noble – gas shares are soaring on the stock market. Ratio, Whale Partner, jumps 11%; Drilling fuel About 9%; Tamar Petroleum About 5% and so is a stock Fuel group.