San Ramon-based Chevron said Monday it is acquiring Denver-based PDC Energy in a stock-and-debt transaction valued at $7.6 billion. Chevron said, “The acquisition of PDC provides Chevron with high-quality assets expected to deliver higher returns in lower carbon intensity basins in the U.S. PDC brings strong free cash flow, low breakeven production and development opportunities adjacent to Chevron’s position in DJ Basin as well as additional acreage to Chevron’s leading position in the Permian Basin.”
The deal increases Chevron’s proved reserves by 10 percent with 275,000 net acres in DJ Basin that add more than one billion boe of proved reserves and 25,000 net acres in Permian Basin that are held by production and will be integrated into Chevron’s existing capital development operations. Chevron expects to increase capex by about $1 billion per year to raise guidance range to $14 billion-to-$16 billion through 2027.