News wire — U.S. energy major Chevron said on Thursday it was expecting to take a hit of $200 million to $400 million in the third quarter related to the Hess deal.
Chevron closed its $55 billion acquisition of Hess in July after winning a landmark legal battle against larger rival Exxon Mobil to gain access to the largest oil discovery in decades.
Excluding severance charges and other costs related to the deal, adjusted earnings are expected to be between $50 million and $150 million in the quarter.
The U.S. energy major also expects the deal to add $1 billion to $1.25 billion to its capital spending for the current quarter.
During the third quarter, the newly added assets from Hess were expected to produce about 450,000 to 500,000 barrels of oil equivalent per day, including downtime.
Chevron’s second-quarter global production totalled 3.4 million barrels of oil equivalent per day.
The acquisition was part of the biggest wave of consolidation in the oil industry in over 20 years and was a strategic counter to Exxon’s own blockbuster deal and growing position in the Permian.
However, the deal, first announced in October 2023, went through a drawn-out dispute over Hess’s 30% stake in Guyana’s Stabroek block, the most attractive asset in its portfolio.
Chevron is also in the midst of laying off up to 20% of its global workforce, has faced a rise in safety issues, and its operations in Venezuela have been caught in a geopolitical crossfire.
Reporting by Vallari Srivastava in Bengaluru; Editing by Anil D’Silva – Reuters
