Exxon Looking To "Extract A Pound Of Flesh" From Chevron's Proposed Takeover Of Hess

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by Tyler Durden
Thursday, Feb 29, 2024 - 06:00 PM

Exxon's challenge of Chevron's acquisition of Hess could result in a windfall for Exxon shareholders, a new report from Reuters speculates

As we wrote earlier this week, Exxon is challenging Chevron's acquisition of Hess by challenging the terms of a stake in a major Guyana oil field. Exxon said it could exercise pre-emptive rights that could block Chevron from acquiring a 30% stake in the field, which sits at the center of the potential Hess acquisition. 

MKP Advisors said in a note reviewed by Reuters that Exxon is "very possibly looking to extract a pound of flesh from Chevron to support the deal proceeding." They speculated that "It is very possible they want greater commitments from Chevron than Hess has previously signed up to."

Exxon could be targeting Chevron to make concessions elsewhere, or to raise commitments already in place for the Guyana project. And it may be easier for Chevron to make concessions than to fight proceedings in court. 

Stewart Glickman, energy equity analyst at CFRA Research, told Reuters: "It's impossible to say if Chevron's lawyers or Exxon's lawyers are correct."

We noted earlier this week that ExxonMobil and China National Offshore Oil Corporation are "asserting their right to pre-empt its purchase of a stake in a Guyana oil project that is central to the deal."