Chevron Corp expects to book losses of $200-400 million from its purchase of Hess Corp in its third-quarter results.
“Excluding severance and other costs related to the transaction, Hess-related impacts on the company’s adjusted earnings in third quarter 2025 are estimated to be $50 to $150 million”, Chevron said in a regulatory disclosure.
For the July-September quarter it expects $50-150 million in after-tax earnings adjusted for nonrecurring items, according to the filing with the United States Securities and Exchange Commission.
Chevron also expects to recognize $1.2-1.4 billion in pre-tax depreciation, depletion and amortization for 3Q, while capital spend is pegged at $1-1.25 billion.
The company projects 450,000-500,000 barrels of oil equivalent a day in net production in 3Q, including downtime impacts.
“The company expects to realize synergies from the Hess transaction in future quarterly earnings”, the filing stated.
“Approximately half of the cash outflows associated with the severance and other transaction costs related to the Hess acquisition are expected to occur in third quarter 2025, and the remainder is expected within the next 12 months. Overall, the company expects a working capital outflow of $0.5 to $1.5 billion in third quarter 2025.
“In addition, the company expects to have approximately 2 billion shares of common stock outstanding at September 30, 2025, and approximately 1.95 billion weighted average shares outstanding during third quarter 2025”.
On July 18 Chevron announced its merger with Hess had been completed after a favorable ruling by the International Chamber of Commerce (ICC) tribunal in Paris.
While Chevron cleared an extended U.S. anti-trust review of its purchase of Hess last year, the transaction was delayed to 2025 due to arbitration by Exxon Mobil Corp and China National Offshore Oil Corp (CNOOC). The arbitration was meant to protect their preemption rights in Guyana’s Stabroek. Hess owns a 30 percent stake in Stabroek. ExxonMobil operates the block with a 45 percent interest, while CNOOC owns 25 percent.
Announcing the consummation of the merger, Chevron said, “The acquisition adds world-class assets, including Guyana and U.S. Bakken, to Chevron’s diversified global portfolio where it is a leader in the Permian Basin, Gulf of America, DJ Basin, Kazakhstan, Eastern Mediterranean and Australia”.
“Chevron now owns a 30 percent position in the Guyana Stabroek Block, which has more than 11 billion barrels of oil equivalent discovered recoverable resource; 463 thousand net acres of high-quality inventory in the Bakken; complementary assets in the Gulf of America with 31 thousand barrels of oil equivalent per day; and natural gas assets in Southeast Asia with 57 thousand barrels of oil equivalent per day”, Chevron added.
Hess shareholders received 1.025 Chevron shares for each Hess share. “As a result, Chevron intends to issue approximately 301 million shares of common stock out of treasury to Hess stockholders in connection with the transaction”, Chevron said.
“The 15.38 million shares of Hess common stock (which were acquired in open market transactions) beneficially owned by Chevron immediately prior to the closing were cancelled for no consideration”.
To contact the author, email jov.onsat@rigzone.com
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