The FTC (Federal Trade Commission) has given the green light for two landmark oil deals in the U.S.: Exxon Mobil’s (XOM) acquisition of Pioneer Natural Resources and Chevron’s (CVX) purchase of Hess (HES). In its statement, the FTC confirmed it had approved consent orders settling the antitrust concerns for both transactions. The news comes amid the FTC’s increased focus on oil and gas deals as the industry sees a spike in M&A activity. On Friday, XOM shares rose by 0.90%, while CVX increased by 1.31%.
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FTC Clears Path for Oil Giants with a Twist
As part of Exxon’s $60 billion merger order, the company is prohibited from nominating or appointing former Pioneer CEO Scott Sheffield to its board. Meanwhile, for Chevron’s $53 billion deal with Hess, Hess CEO John Hess will not be allowed to join Chevron’s board. Moreover, these CEOs will also be prohibited from serving an advisory role to Chevron and Exxon’s board or management team.
The U.S. agencies have earlier accused Sheffield and Hess of conspiring and engaging with competitors about global oil production. Such actions could have increased energy prices, impacting U.S. consumers and businesses.
Chevron and Exxon’s Big Moves
With the acquisition of Hess, Chevron gains a 30% stake in the Stabroek block in Guyana, a valuable asset known for high cash margins, low carbon intensity, and projected production growth for the next decade.
At the same time, the merger of ExxonMobil and Pioneer forms a unique business with significant growth potential in the Permian Basin. Together, they control over 1.4 million acres in the Delaware and Midland basins, with an estimated 16 billion barrels of oil equivalent in resources.
Exxon will see quicker returns with more oil production per day. However, Chevron’s acquisition may offer more upside due to the future production growth potential in Guyana.
XOM or CVX: Which U.S. Oil Stock Is Expected to Outperform?
Here, we have used TipRanks’ Stock Comparison Tool to compare XOM and CVX and identify the oil stock with the higher upside potential, as per analysts.
According to TipRanks consensus, CVX stock holds a Strong Buy rating with 16 Buy and 3 Hold recommendations, The Chevron share price target of $175.56 offers an 8.7% upside from current levels.
In comparison, XOM stock has a Moderate Buy rating, supported by 13 Buy and 5 Hold recommendations. However, the Exxon Mobil share price target of $133.35 suggests a 19% upside potential, nearly double that of CVX.
