In a transaction that illustrates the desire of leading American energy firms for oil and gas assets in a global market looking for lower-risk future fossil supplies and stronger shareholder returns, Chevron (CVX.N) has agreed to purchase competitor Hess (HES.N) for $53 billion in shares.

The planned agreement intensifies the rivalry between Chevron, the country’s second-largest oil and gas producer, and its bigger competitor, Exxon. Additionally, it means that Chevron and Exxon will collaborate in Guyana’s expanding oilfields, which are predicted to produce 1.2 million barrels of oil per day by 2027.

This comes after Exxon’s quick acquisitions of Denbury (DEN.N) and Pioneer Natural Resources (PXD.N), the leading producers of shale oil in the United States, since July. These two deals, which together brought Exxon to the top of the US shale market, solidified the company’s fledgling carbon storage division.

The current agreements represent a cash flex by American oil and gas firms, who continued to invest in fossil fuels as their European competitors focused on renewable energy sources. Exxon and Chevron benefited from the surge in oil prices and demand following Russia’s invasion of Ukraine.

Chevron Chief Executive Michael Wirth stated, “We’ve got too many CEOs per BOE (barrels of oil equivalent), so consolidation is natural,” and that further mergers and acquisitions could be expected.

For every Hess share owned, Chevron has offered 1.025 of its shares, or $171 per share, indicating a premium of around 4.9% over the stock’s most recent closing. With debt included, the deal is worth $60 billion in total.

In premarket trade, Hess was slightly down while Chevron’s shares were down 2.3%. The timing of the purchase shocked RBC analysts, who had anticipated Chevron to wait it out following Exxon’s massive acquisition of Pioneer (PXD.N).

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