Hess Corporation stock (US42809H1077): Chevron takeover, shareholder vote and what investors need to know now

Hess Corporation is at the center of a multi?billion dollar takeover by Chevron, while an arbitration dispute with Exxon and CNOOC over Guyana adds uncertainty. What this means for the oil producer’s shareholders and US investors.

Chevron’s planned acquisition of Hess Corporation has reached a decisive phase: on May 17, 2024, Hess shareholders approved the all?stock merger with Chevron, according to a company press release published the same day Hess investor relations as of 05/17/2024. The deal, valued at about 53 billion USD including debt when announced in October 2023, still depends on regulatory clearances and an arbitration process around Hess’ stake in the giant Stabroek Block offshore Guyana, as highlighted by both Hess and Chevron in recent updates Chevron investor relations as of 04/24/2024.

As of: 19.05.2026

By the editorial team – specialized in equity coverage.

At a glance

• Name: Hess Corporation
• Sector/industry: Oil and gas exploration and production
• Headquarters/country: New York, United States
• Core markets: Guyana, North Dakota (Bakken), US Gulf of Mexico
• Key revenue drivers: Crude oil and natural gas production, especially from Guyana and US shale
• Home exchange/listing venue: New York Stock Exchange (ticker: HES)
• Trading currency: US dollar (USD)

Hess Corporation: core business model

Hess Corporation is an independent oil and gas company focused on exploration and production, with a portfolio centered on offshore Guyana, the Bakken shale play in North Dakota and assets in the US Gulf of Mexico. The company exited most downstream operations years ago to concentrate capital on high?return upstream projects, a strategy it has reiterated in investor presentations and earnings materials Hess investor presentation as of 03/01/2024. For US investors, Hess represents both a play on conventional offshore growth and on shale production within the domestic energy mix.

The jewel in Hess Corporation’s portfolio is its 30 percent non?operated interest in the Stabroek Block offshore Guyana, operated by ExxonMobil alongside CNOOC. This block has been described as one of the most significant oil discoveries in recent decades, with multiple producing fields already online. Hess has highlighted that Guyana volumes are expected to drive a substantial portion of its production growth over the coming years, based on project timelines disclosed in recent quarterly reports and guidance materials Hess investor relations as of 04/25/2024.

Beyond Guyana, Hess maintains a sizeable position in the Bakken shale in North Dakota, where it operates unconventional oil and gas wells. The company has been working to improve drilling and completion efficiency and to optimize its rig count to generate free cash flow at a range of oil prices. Operations in the US Gulf of Mexico and in Southeast Asia round out the portfolio. However, in recent strategic communications the company has emphasized that the combination of Guyana and the Bakken underpins its long?term production and cash?flow outlook, which, in turn, is central to Chevron’s rationale for the takeover.

Main revenue and product drivers for Hess Corporation

Hess Corporation’s revenue is primarily driven by crude oil and, to a lesser extent, natural gas sales. In its full?year 2023 earnings release, Hess reported net income of 2.31 billion USD on 11.25 billion USD of revenue for 2023, compared with 2.68 billion USD of net income on 11.55 billion USD of revenue in 2022, reflecting both commodity price dynamics and production volumes over the period, according to the company’s annual results publication dated January 31 2024 Hess investor relations as of 01/31/2024. The company highlighted strong contributions from Guyana and continued development in the Bakken.

For the first quarter of 2024, Hess reported net income of 972 million USD on revenues of 3.34 billion USD for the three months ended March 31 2024, compared with net income of 346 million USD and revenues of 2.45 billion USD in the first quarter of 2023, according to its results release published April 25 2024 Hess investor relations as of 04/25/2024. The company attributed the year?over?year improvement primarily to higher production in Guyana and favorable realized selling prices, underlining the importance of the Stabroek Block for earnings.

Production volumes are a key operational driver. In the same first?quarter 2024 update, Hess noted that net production averaged 476,000 barrels of oil equivalent per day for the quarter, up from 374,000 barrels of oil equivalent per day in the prior?year quarter, as per the company’s statement on April 25 2024 Hess investor relations as of 04/25/2024. Growth in Guyana output more than offset declines elsewhere, reinforcing why this asset has become central to the company’s valuation and to Chevron’s strategic interest.

Hess also returns capital to shareholders through dividends and, at times, share repurchases. In its capital allocation framework, the company has stated that a portion of operating cash flow is earmarked for shareholder distributions, while the remainder supports project investments in Guyana, the Bakken and other core assets, according to management commentary accompanying the 2023 quarterly reports Hess earnings call transcript as of 10/25/2023. For many US income?oriented investors, the stability and potential growth of dividends from a combined Chevron?Hess entity are an important consideration.

Chevron’s takeover of Hess Corporation and the Guyana arbitration

The takeover of Hess Corporation by Chevron was announced on October 23 2023 as an all?stock transaction, with Hess shareholders expected to receive 1.025 Chevron shares for each Hess share, according to Hess’ merger announcement released that day Hess investor relations as of 10/23/2023. At the time of announcement, the enterprise value of the deal, including assumed debt, was estimated at 60 billion USD based on Chevron’s then?share price. The transaction aims to combine Chevron’s global portfolio with Hess’ high?growth assets, particularly in Guyana.

A key complication, however, has emerged in the form of an arbitration initiated by ExxonMobil and CNOOC relating to pre?emption rights over Hess’ interest in the Stabroek Block. Exxon and CNOOC invoked arbitration in early 2024, arguing that they may have a right of first refusal over Hess’ stake, as acknowledged by Chevron in a statement on April 24 2024 Chevron investor relations as of 04/24/2024. Chevron noted that it disagrees with the claims and believes the right of first refusal does not apply to the corporate?level transaction.

The arbitration process may affect the timing of the Chevron?Hess merger’s closing and has introduced an additional layer of uncertainty for shareholders. Chevron has stated that it continues to work with Hess to obtain the necessary regulatory approvals and to resolve the arbitration, while maintaining that the strategic logic of the acquisition remains intact, according to the April 24 2024 update Chevron investor relations as of 04/24/2024. For investors, the arbitration highlights how contractual rights in joint ventures can influence major corporate transactions in the energy sector.

In the meantime, Hess continues to operate as an independent listed company. The shareholder vote in May 2024 approving the merger was a crucial step, but closing will depend on the outcome of arbitration and regulatory review. This combination of a clear strategic path and outstanding legal questions creates a complex risk?reward profile that market participants are watching closely, particularly those with exposure to the US energy sector and to Guyana’s rapidly emerging oil industry.

Conclusion

Hess Corporation stands at a pivotal moment, combining strong recent earnings and rising production from Guyana with the uncertainties of a large strategic merger and associated arbitration. The approved all?stock acquisition by Chevron, pending regulatory and legal outcomes, could reshape Hess shareholders’ exposure from a focused independent producer toward a diversified super?major. At the same time, developments in the Guyana joint venture, commodity prices and US shale economics will continue to influence the company’s value. For US investors following the energy sector, Hess represents both a case study in how offshore megaprojects can transform a mid?sized producer and an example of the legal and strategic complexities that can arise when such assets become the focal point of consolidation.

Disclaimer: This article does not constitute investment advice. Stocks are volatile financial instruments.