Big Oil gets Bigger: Chevron Acquires PDC

Chevron announced its all stock acquisition of PDC Energy, valuing the company at $7.6 billion, last week. According to the companies’ joint press release, “The acquisition of PDC provides Chevron with high-quality assets expected to deliver higher returns in lower carbon intensity basins in the United States” – particularly in the oil-rich Denver-Julesburg and Permian basins.

The deal is expected to draw regulatory scrutiny. Analysts anticipate “The Federal Trade Commission is likely to do a deep look at the transaction as the list of ‘significant’ operators in the DJ Basin drops to three from four with the deal.”

The Biden Administration has generally championed more aggressive antitrust scrutiny and set its sights on companies ranging from U.S. Sugar to Google, though courts have largely rejected the Administration’s antitrust crusade thus far. At the same time, the Biden Administration has sought to increase domestic oil production to counter the soaring prices as well as leverage over Russia following its invasion of Ukraine.


After decades of declining oil production, the United States dramatically reversed course by employing new technologies to access reserves previously inaccessible. The “Shale Revolution” began in the mid 2000s and has led to a large increase in U.S. oil production as hydraulic fracturing enabled producers to drive huge quantities of oil from the nation’s vast shale fields.


This shift has had critical geopolitical consequences. Most recently, the U.S.’s role as a net exporter of oil has empowered the nation to ban Russia oil. According to the White House, “The United States is able to take this step because of our strong domestic energy infrastructure and we recognize that not all of our Allies and partners are currently in a position to join us. But we are united with our Allies and partners in working together to reduce our collective dependence on Russian energy and keep the pressure mounting on Putin.”

Toward this end, President Biden walked back his campaign promise to prevent any more drilling on federal lands. In March 2023 alone, the Administration opened federal territory in both Alaska and the Gulf of Mexico to new oil drilling.


One of the focuses of the Chevron-PDC deal is also the key to the United States’ continued production: the Permian basin. Located in western Texas and southeastern New Mexico, the Permian produces nearly 50% of the total U.S. supply. “The immense quantities of oil and gas in the Delaware basin make up the largest deposit of oil and gas ever documented by the USGS in the USA. Quite simply, it’s the nation’s premier energy play with some of the largest recoverable reserves in the world.”

According to Matterhorn’s comprehensive M&A database, which harnesses AI to track current and historical deals, Chevron is advised by Paul, Weiss, Rifkind, Wharton & Garrison LLP, while PNC is advised by Wachtell, Lipton, Rosen & Katz and Davis Graham & Stubbs LLP.