Chevron Increases Hess Stake Amid Pending $53B Acquisition

Chevron (NYSE:CVX) has acquired 4.99% of Hess Corp (NYSE:HES) shares this year, reinforcing its confidence in completing the $53 billion all-stock acquisition of Hess, according to a regulatory filing on Monday.

The second-largest U.S. oil producer announced the deal in October 2023 to secure a key stake in Guyana’s oil-rich Stabroek block. While U.S. regulators and shareholders have approved the acquisition, Hess’ partners in Guyana—Exxon Mobil (NYSE:XOM) and CNOOC (NYSE:CEO)—have challenged it in court. A three-judge arbitration panel is set to review the case in May.

Chevron purchased 15.38 million Hess shares between January and March, worth approximately $2.3 billion based on Hess' closing price of $150.45 on Monday. Under the merger terms, Hess shareholders would receive 1.025 Chevron shares per Hess share. If finalized at Monday’s prices, this would value Hess stock at $162.69, compared to Chevron’s closing price of $158.72.

This strategic move allows Chevron to acquire Hess shares at a discount, saving money while securing an indirect stake in the Stabroek field. Roy Behren, co-president and co-chief investment officer at Westchester Capital Management, called it a "smart and savvy move," expressing confidence in the acquisition’s completion. Even if the deal falls through, Chevron retains a $2.3 billion indirect interest in the Guyana asset.

Chevron’s purchase signals strong optimism about the merger, positioning itself strategically within the growing Guyana oil market. With arbitration pending, industry watchers remain focused on the outcome, which could reshape the energy landscape.