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Jim Cramer 'Really, Really' Likes  Chevron-Noble Deal

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Chevron is buying Noble for $5 billion in stock in what marks the biggest oil-patch tie-up since the coronavirus pandemic took hold.

Chevron announced on Monday that it will buy Noble at for $10.38 a share, or 0.1191 a Chevron share. At that level, the deal represents a roughly 7.6% premium over Noble’s Friday closing price of $9.65 and nearly 12% based on a 10-day average.

Including Noble debt, the total enterprise value of the deal is $13 billion.

Buying Houston-based Noble, which has both U.S. and international operations, compliments Chevron’s presence in the oil-rich deposits of the DJ Basin of Colorado and Permian Basin, which spans West Texas and New Mexico.

It also gives Chevron, which has a market value of $163 billion, assets in the eastern Mediterranean and West Africa. Chevron's stock was down 2.05% at $85.43.

“Our strong balance sheet and financial discipline gives us the flexibility to be a buyer of quality assets during these challenging times,” Chevron CEO Michael Wirth said in a statement. “This is a cost-effective opportunity for to acquire additional proved reserves and resources."

Chevron’s stock has surged over than 70% from its March 23 low, despite an unprecedented drop in oil prices sparked in part by the coronavirus pandemic and shutdown of economic activity globally, though augmented by a price war between Russia and Saudi Arabia that fueled one of the biggest supply guts in history, pushing futures contracts for West Texas Intermediate--the U.S. bellwether--briefly entered negative territory in April.

So, what does Jim Cramer think of this deal?

Watch the video above for more.

You can follow Jim Cramer and Katherine Ross on Twitter at @JimCramer and @byKatherineRoss. Read more from Katherine Ross here.

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