Chevron shares fell 4 per cent as investors weighed the cost of the deal, which includes taking on $15 billion of Anadarko's debt. It expands Chevron's role in two areas where USA energy output is surging - shale from the Permian Basin of west Texas and New Mexico, and liquefied natural gas (LNG) - which have helped make the United States one of the world's largest energy exporters. "It gives the combined entity the ability to high-grade its assets and focus on where the best cash returns are".
Chevron was not the only suitor with eyes on Anadarko.
Anadarko Petroleum stock opened at $61.78 on Friday.
Chevron chief executive Mike Wirth said the deal "builds strength on strength for Chevron".
But it's not just the Permian that drives the deal: It increases CVX's deepwater hubs in the Gulf of Mexico from six to 16, it provides a stake in growing production in Colorado's DJ Basin, and the Mozambique LNG project is part of one of the industry's largest planned current investments.
Chevron will buy Anadarko Petroleum for $33 billion in a cash-and-stock, energizing its deep water exploration in the gulf and in the energy-rich southwest region of Texas called the Permian Basin.
The acquisition launches Chevron to a brand new aggressive stage, establishing the San Ramon, California-based mostly firm as an extra formidable challenger to rival oil giants Exxon Mobil, Royal Dutch Shell, and BP, says vitality and mining analysis agency, Wooden Mackenzie.
"This is also subject to the success of Chevron's asset sales programme, which has now been upgraded from $5-10bn over 2018-20, to $15-20bn over 2020-22". He has quickly shaken up the company by announcing an aggressive expansion plan for the Permian. Chevron shares were down 4.2% from Thursday's close of $125.99 a share.
Anadarko, which is based in The Woodlands, Texas, has always been rumored as a takeover target for the world's largest oil companies, offering a suite of assets including a massive LNG facility in Mozambique that's racing against Exxon's project to be the first operating in the country.
The deal might put pressure on Shell to seek assets in the Permian Basin, where the Anglo-Dutch company has said it wants to grow.
The merger would be the sixth largest in the industry and the biggest since Shell bought BG Group for £47...
Analysts have painted Anadarko as a potential target for giant oil companies for years, arguing that the company's drilling projects in the USA and overseas could be enough to bring offers to the table.
Shale producers such as Pioneer Natural Resources, Continental Resources, Diamondback Energy and Concho Resources have already been under pressure from investors to improve their profitability.
Shares of Anadarko surged 32% yesterday morning, reflecting the 39% premium offered by Chevron compared to Thursday's closing market price. Chevron will issue 200 million shares and pay US$8 billion in cash.
Analyst firm Rystad Energy said the company has done well with the deal at a value of $50bn (£38.2bn).
Chevron said the deal will create annual synergy savings of £1.5billion.
"We expect the Anadarko acquisition to close during the second half of 2019". Finally, Credit Suisse Group lowered their price objective on shares of Anadarko Petroleum from $73.00 to $67.00 and set an "outperform" rating on the stock in a research report on Wednesday, February 6th.
Evercore and Goldman Sachs are financial advisers to Anadarko, while Wachtell, Lipton, Rosen & Katz and Vinson & Elkins LLP are its legal advisers.