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Chevron to boost positions in DJ and Permian basins with PDC Energy acquisition

Chevron has entered into a definitive agreement with PDC Energy to acquire all of the outstanding shares of PDC in an all-stock transaction valued at $6.3 billion. The acquisition provides Chevron with high-quality assets expected to deliver higher returns in lower carbon intensity basins in the United States. PDC brings strong free cash flow, low breakeven production and development opportunities adjacent to Chevron’s position in the Denver-Julesburg (DJ) Basin, as well as additional acreage to Chevron’s leading position in the Permian Basin.

“PDC’s attractive and complementary assets strengthen Chevron’s position in key US production basins,” said Chevron Chairman and CEO Mike Wirth. “This transaction is accretive to all important financial measures and enhances Chevron’s objective to safely deliver higher returns and lower carbon. We look forward to welcoming PDC’s team and shareholders to Chevron and continuing both companies’ focus on safe and reliable operations.”

“The combination with Chevron is a great opportunity for PDC to maximize value for our shareholders. It provides a global portfolio of best-in-class assets,” said Bart Brookman, PDC President and CEO. “I look forward to blending our highly complementary organizations, and I’m excited that PDC’s assets will help propel Chevron toward our shared goal for a lower carbon energy future.”

In the DJ Basin, PDC holds 275,000 net acres that are adjacent to Chevron’s existing operations and will add over 1 billion BOE of proved reserves in highly economic locations and enable capital and operational synergies. In the Permian Basin, PDC has 25,000 net acres that are held by production and will be integrated into Chevron’s existing capital efficient development operations.

As a result of the transaction, Chevron expects to increase its CAPEX by approximately $1 billion per year, raising its guidance range to $14 to $16 billion through 2027, after realizing about $400 million in CAPEX efficiencies post-closing.

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