Exxon could pre-emptively match Chevron's offer to Hess for Guyana stake – SEC filing

Hess (NYSE:HES) experienced a dip of 3% in post-market trading on Monday following a warning from Chevron (CVX) regarding Exxon Mobil (XOM) and Cnooc’s (OTCPK:CEOHF) potential challenge to Chevron’s offer for Hess’ stake in the Stabroek oil project in Guyana, operated by Exxon.

In a recent SEC filing, Chevron (CVX) indicated ongoing discussions with the Exxon-led consortium to ascertain their right to match Chevron’s bid for Hess’ (HES) portion in the Guyana project. This development raised doubts about Chevron’s completion of the purchase of Hess within the expected timeframe, if at all.

Chevron and Hess acknowledged in the filing that they anticipate a resolution from the discussions to not hinder the merger between the companies. However, should the talks fail to yield an agreement, the matter could escalate to arbitration.

The proposed $53 billion acquisition of Hess by Chevron heavily hinges on Hess’ 30% share in Exxon-led operations in Guyana, a significant asset due to being part of one of the most substantial oil discoveries in recent years.

The uncertainty surrounding Exxon’s potential counteroffer injects a level of complexity into the situation, as Exxon currently asserts its rights to do so, as reported by The Wall Street Journal.

The root of the dispute lies in a joint operating agreement signed over ten years ago, which dictates the terms governing the operations of the consortium. Hess joined the agreement in 2014 when it acquired its stake from Shell.