Oil Stocks Drop Despite Major Chevron-Hess Deal

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U.S. oil stocks and oil-tracking exchange-traded funds opened lower on Monday despite the major Chevron-Hess deal.

Amid lower crude oil prices, U.S. oil stocks and oil-tracking exchange-traded funds ETF opened lower on Monday, and even Hess’s shares slid after Chevron’s announcement it would buy the smaller U.S. oil firm in an all-stock deal. Hess Corporation NYSE HES was down by 0.55% in pre-market trade, despite being the target of the Chevron acquisition, due to the all-stock nature of the announced transaction. Chevron NYSE CVX was down 2.

oil industry announced this month. Earlier in October, ExxonMobil announced a deal to buy Pioneer Natural Resources in an all-stock transaction valued at $59.5 billion. The implied total enterprise value of the transaction, including net debt, is around $64.5 billion. The muted reaction from the market to the Chevron-Hess deal was probably due to the fact that this is an all-stock transaction, too, analysts say. Crude oil prices were also down early on Monday, further weighing on the oil stocks.

 

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