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Friday
02 Aug 2024

Hess Shares Fall Most in 20 Months on Lengthy New Delay to Chevron Sale

02 Aug 2024  by reuters   

Chevron and Hess logos are seen in this illustration taken, October 23, 2023. REUTERS/Dado Ruvic/Illustration Purchase Licensing
Shares in U.S. oil producer Hess (HES.N), opens new tab suffered their largest daily percentage drop in 20 months on Thursday on fallout from the lengthy new delay to its proposed sale to Chevron (CVX.N), opens new tabAn arbitration panel organized to hear an Exxon Mobil (XOM.N), opens new tab challenge to the $53 billion sale will not meet until next May, pushing back any closing until the second half of 2025. The two companies originally had hoped to conclude the merger earlier this year.

Hess' stock fell $11.25, or 7.35%, the largest daily percentage drop since November 2022. Chevron shares were also off 4%, or $6.57, at $153.93 in midday New York trading.

Exxon and CNOOC Ltd (0883.HK), opens new tab filed arbitration claims claiming a pre-emption right to any sale of Hess’ lucrative stake in a Guyana oil-producing joint venture. The challenge threatens to block Chevron’s biggest deal since its 2001 acquisition of Texaco for $36 billion.

Exxon and CNOOC have argued Chevron's bid for Hess triggered a right of first refusal clause in their Guyana joint operating agreement. Chevron and Hess dispute that claim.

The all-stock sale, announced last October, has been stalled by a second request for information by antitrust regulator, the U.S. Federal Trade Commission. Its review should be completed this quarter, a spokesman for Hess said.

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