Chevron will buy PDC Energy for $7.6 billion

May 22 (Reuters) – Chevron Corp said on Monday it would buy PDC Energy Inc in a $7.6 billion debt-adjusted equity deal. The American oil and gas giant continues to expand its production capacity in the USA.

With the PDC acquisition, Chevron will increase proven reserves by 10% at an expected cost of less than $7 a barrel, the company said.

The transaction with PDC is expected to increase Chevron’s annual free cash flow by $1 billion. Under the terms of the deal, PDC shares are set at $72 per share, representing a 10.56% premium over Friday’s closing price. Thus, the total value of the company’s share capital is estimated at USD 6.3 billion.

Chevron said the deal was unanimously approved by the boards of both companies and is expected to close before the end of the year.

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(Arunima Kumar in Bangalore)