Chevron Completes Acquisition of Hess Corporation, Cementing Its Position as a Global Energy Leader
Chevron Corporation (NYSE: CVX) has officially completed its landmark acquisition of Hess Corporation (NYSE: HES), marking a significant step in Chevron’s long-term strategy to enhance its global portfolio and secure a stronghold in some of the world’s most lucrative energy markets. The announcement comes after all regulatory and legal hurdles were cleared, including a pivotal arbitration decision in favor of Hess regarding its prized offshore Guyana asset and a regulatory green light from the U.S. Federal Trade Commission (FTC).
The acquisition, first proposed in 2023, has now culminated in the full integration of Hess’s assets into Chevron’s operations. The deal strengthens Chevron’s upstream oil and gas portfolio, enhances its production capabilities, and diversifies its asset base with high-margin, long-life resources. Among the most prominent additions to Chevron’s holdings are the world-class Guyana offshore discoveries and the prolific U.S. Bakken shale assets.
A Transformational Deal for Chevron
Commenting on the milestone, Chevron Chairman and CEO Mike Wirth said, “This merger of two great American companies brings together the best in the industry. The combination enhances and extends our growth profile well into the next decade, which we believe will drive greater long-term value to shareholders.”
He also addressed the regulatory approval for former Hess CEO John Hess to join Chevron’s Board of Directors: “I’m pleased with the FTC’s unanimous decision. John is a respected industry leader, and our Board would benefit from his experience, relationships, and expertise.”
John Hess, who led Hess Corporation for decades, reflected on the achievement, stating, “We are proud of everyone at Hess for building one of the industry’s best growth portfolios, including Guyana—the world’s largest oil discovery in the last 10 years—and the Bakken shale, where we are a leading oil and gas producer. The strategic combination of Chevron and Hess creates a premier energy company positioned for the future.”
Strategic Additions to Chevron’s Global Portfolio
The acquisition substantially elevates Chevron’s footprint in high-potential regions. Notably, the deal gives Chevron a 30% stake in the Stabroek Block offshore Guyana. This site is one of the most significant oil discoveries of the past decade, with an estimated 11 billion barrels of recoverable oil equivalent already discovered. Hess’s role in Guyana was crucial in attracting industry attention due to the rapid development and early production successes in partnership with ExxonMobil and China’s CNOOC.
In addition, Chevron now controls approximately 463,000 net acres of high-quality shale resources in North Dakota’s Bakken Formation, one of the leading unconventional oil and gas plays in the U.S. These assets complement Chevron’s existing positions in the Permian Basin, DJ Basin, and Gulf of Mexico. The integration also brings assets in the Gulf of America producing approximately 31,000 barrels of oil equivalent per day (BOEPD), and natural gas assets in Southeast Asia generating 57,000 BOEPD.
These additions solidify Chevron’s standing in both mature and emerging energy markets, providing the company with geographic and operational balance and long-term resource optionality.
Financial Strength and Shareholder Value
Chevron emphasized the transaction’s positive financial implications. The deal is expected to be accretive to cash flow per share starting in 2025, especially following the commencement of the fourth floating production, storage, and offloading (FPSO) vessel in Guyana. Chevron forecasts that this acquisition will increase both its five-year production growth and free cash flow growth rates, extending well into the 2030s.
Eimear Bonner, Chevron’s Chief Financial Officer, remarked, “This accretive transaction is expected to drive significant free cash flow and production growth into the 2030s. We are quickly integrating our two companies and expect to achieve $1 billion in annual run-rate cost synergies by the end of 2025. All of this should enable even higher returns to shareholders over the long-term.”
As part of the transaction, Hess shareholders will receive 1.025 Chevron shares for every Hess share, resulting in the issuance of approximately 301 million Chevron shares from treasury. Additionally, the 15.38 million Hess shares previously acquired by Chevron on the open market were cancelled without compensation, effectively streamlining the transaction.
Strong Capital Discipline and Synergy Potential
Chevron reaffirmed its commitment to disciplined capital management. The combined company is expected to operate with a capital expenditures budget ranging from $19 billion to $22 billion, with a continued focus on high-return projects and operational efficiency.
Key financial highlights and targets post-acquisition include:
- $1 billion in annual run-rate cost synergies by year-end 2025.
- Sustained double-digit Return on Capital Employed (ROCE) at mid-cycle prices.
- Enhanced ability to return capital to shareholders through dividends and share buybacks.
Chevron has stated it will provide updated financial and operational guidance at its Investor Day in New York City on November 12, 2025, where it will unveil its integrated strategy and long-term roadmap that now includes Hess assets.
Regulatory Milestones and Governance Developments
A critical step toward completing the deal was the successful arbitration ruling related to the Guyana offshore assets. This resolved uncertainty around ExxonMobil and CNOOC’s right of first refusal and cleared the path for Chevron to proceed.
Additionally, the FTC lifted its earlier restriction on former Hess CEO John Hess joining Chevron’s Board, a move that is expected to strengthen corporate governance with industry-savvy leadership. His formal appointment is now pending approval from Chevron’s Board of Directors.
This is not Chevron’s first major acquisition in recent years. The company has been strategically expanding its portfolio through a series of well-timed acquisitions—including Noble Energy in 2020 and PDC Energy in 2023. The Hess transaction, however, marks the company’s largest in more than a decade and signals a strong vote of confidence in the longevity and profitability of conventional oil and gas assets, even as the broader energy industry undergoes a transition toward lower-carbon alternatives.
