ChevronTexaco has revealed that it is to acquire Unocal in a stock and cash transaction valued at approximately $18 billion.
ChevronTexaco, which is the second largest oil company in the US, believes the acquisition will significantly enhance its position as a leading global energy provider, as Unocal, the ninth largest oil company in the US, has significant assets in Gulf of Mexico and the Asia Pacific.
The offer from the oil titan represents a 4% shortfall on Unocal’s share value as of the end of last week, although shares in the company have soared since takeover speculation started at the end of 2004. However, ChevronTexaco appears to be likely to succeed where others, including the China National Offshore Oil Corp and Italian oil company Eni SpA, both previous suitors, did not.
ChevronTexaco expects oil-equivalent production from the combined portfolios during 2006 to average about three million barrels per day. Unocal’s 1.75 billion barrels of oil-equivalent proved reserves would increase ChevronTexaco’s reserve base as of the end of 2004 by about 15%. Furthermore, the resultant weighting of natural gas reserves would increase by about five percentage points to roughly one-third of the oil-equivalent total.
Unocal is a unique independent with supermajor assets that are an excellent fit with our existing portfolio and our long-term strategies to grow profitably in core upstream areas, build new legacy positions and commercialize our large undeveloped natural gas resource base, ChevronTexaco chairman and CEO Dave O’Reilly said. It is an attractive transaction that provides value in both the near- and long-term.