Chevron-Noble tie-up: a deep dive into the Supermajor’s Lower 48 portfolio

1 minute read

As the first large-scale deal after the oil price crash, Chevron’s acquisition of Noble Energy is generating a huge amount of interest.

And while the overall deal is not US-focused – Mediterranean gas is the crown jewel – consolidating Chevron’s Permian tight oil portfolio is an important driver.

The Supermajor will gain exposure to multiple basins – the Permian, DJ basin and Eagle Ford – with projects in various stages of development. Noble’s multi-basin Lower 48 position offers flexibility. It’s an attractive asset mix, and each play holds a unique identity.

Our analysts use Lens Lower 48 to explore Noble’s complex US portfolio and go deep into each asset’s future potential. Got thirty minutes? Watch the video to see Lens in action. Or read on to get the highlights.

Chevron gets bigger in the Permian, but will it also get better?

Chevron already holds a significant position in the Permian. Noble’s Delaware acreage is adjacent to the Supermajor’s legacy portfolio and will provide operational synergies.

Expanding in this area would give Chevron exposure to new opportunities. This early life asset still has growth potential and its higher oil cuts could attract attention away from Chevron’s gassier Culberson county development.

What does the DJ Basin deliver that few other plays can?

 The Niobrara has the potential to become a cash generator for Chevron. It could yield an average free cash flow of US$310 million annually through 2025 without additional drilling.

The basin serves as the hub for Noble's US unconventional portfolio and could provide a more capitally competitive, lower-risk alternative to some of Chevron’s other unconventional assets. Noble has been improving capital efficiency in the DJ through reduced well cost and a contiguous acreage position.

Can anything revive the Eagle Ford?

Noble’s Eagle Ford assets are mature. Few infill opportunities are left: completions from 2015 to 2017 achieved peak well performance.

While the acreage is past its prime, it’s been a steady cash engine for Noble. It will spin off some cash for Chevron in the short term, but we think these assets are likely to be divested.

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