Chevron Buys PDC Energy in $7.6bn Deal

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(Chevron, 22.May.2023) — Chevron Corporation (NYSE: CVX) announced today that it has entered into a definitive agreement with PDC Energy, Inc. (NASDAQ: PDCE) to acquire all of the outstanding shares of PDC in an all-stock transaction valued at $6.3bn, or $72 per share.

Based on Chevron’s closing price on May 19, 2023 and under the terms of the agreement, PDC shareholders will receive 0.4638 shares of Chevron for each PDC share. The total enterprise value, including debt, of the transaction is $7.6bn.


  • Complementary to Chevron’s operations in important U.S. production basins
  • Adds 10% to oil equivalent proved reserves for under $7 per barrel
  • Accretive to earnings per share and return on capital employed (ROCE)
  • Expected to add $1bn to annual free cash flow

The acquisition of PDC 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 U.S. 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.”

Transaction Benefits

  • Accretive to earnings per share, free cash flow and ROCE: Chevron anticipates the transaction to be accretive to all key financial measures within the first year after closing and to add about $1bn in annual free cash flow at $70 per barrel Brent and $3.50 per Mcf Henry Hub (approximate 2024 futures prices as of May 2023).
  • Strong strategic fit: Increases Chevron’s proved reserves by 10% at an acquisition cost under $7 per barrel of oil equivalent (BOE).
    • DJ Basin – 275,000 net acres adjacent to Chevron’s existing operations that add over 1 billion BOE of proved reserves in highly economic locations and enable capital and operational synergies.
    • Permian Basin – 25,000 net acres that are held by production and will be integrated into Chevron’s existing capital efficient development operations.
  • Capital and cost efficient:
    • Capital expenditures – Chevron expects to increase capex by ~$1bn per year, raising its guidance range to $14bn to $16bn through 2027, after realizing about $400mn in capex efficiencies post-closing.
    • Operational expenditures – the transaction is expected to achieve run-rate cost synergies of around $100mn before tax within a year of closing.

Transaction Details

The acquisition consideration is structured with 100 percent stock utilizing Chevron’s equity. In aggregate, upon closing of the transaction, Chevron will issue approximately 41 million shares of common stock. Total enterprise value of $7.6bn includes net debt.

The transaction has been unanimously approved by the Boards of Directors of both companies and is expected to close by year-end 2023. The acquisition is subject to PDC shareholder approval. It is also subject to regulatory approvals and other customary closing conditions.

The transaction price represents a premium of 14% on a 10-day average based on closing stock prices on 19 May 2023.


Morgan Stanley & Co. LLC is acting as lead financial advisor to Chevron. Evercore also advised Chevron. Paul, Weiss, Rifkind, Wharton & Garrison LLP is acting as legal advisor to Chevron. J.P. Morgan Securities LLC is acting as lead financial advisor to PDC Energy and provided a fairness opinion to the Board of Directors. Wachtell, Lipton, Rosen & Katz and Davis Graham & Stubbs are jointly serving as the Company’s legal counsel. PJT Partners also advised PDC Energy.

Conference Call

Chevron will discuss its proposed acquisition of PDC with security analysts in a call today, Monday, May 22, 2023, at 8:00 a.m. PT. A webcast of the discussion will be available in a listen-only mode to individual investors, media, and other interested parties on Chevron’s website at under the “Investors” section, or by calling 800-378-6902 and providing the conference ID 5318663. Prepared remarks and presentation materials for today’s call will be available prior to the call at approximately 5:30 a.m. PT and located under “Events and Presentations” in the “Investors” section on the Chevron website.


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