| WTI Crude | $41.76/bbl | +2.3% |
| Brent Crude | $44.31/bbl | +2.3% |
| HH Nat Gas | $1.66/MMBtu | -2.9% |
| MB Propane | $0.51/gal | +4.3% |
| 3:2:1 Crack | $10.68/bbl | +13.0% |
Chevron makes Occidental look silly
Standard Oil successor, Chevron, announced yesterday that they will be acquiring Houston-based Noble Energy for $5 billion in stock. All that shale in Colorado and the Permian Basin increases Chevron's proven oil and gas reserves by 18%.
Here's some perspective on the deal they got:
Just one year ago Chevron was outbid by Occidental when trying to acquire Anadarko. Anadarko at the time had roughly 1.473 billion barrels of oil equivalent (BOE) in proven reserves and Occidental ended up paying $38 billion. Chevron just bought Noble Energy's 2.05 BOE for $5 billion.
How did they get such a good deal?
Chevron was one of the first oil majors to cut spending when the price of oil crashed earlier this year. The oil price crash reduced the share value of many energy companies, making them look like snacks for companies with enough resources. Chevron was sitting on $8.5 billion in cash at the end of Q1 2020.
Read more here.
Celanese cashes out from their long-time Japanese JV
Way back in 1964, Irving-based Celanese formed a joint venture with Japanese Daicel called Polyplastics (zero creativity points for that name). Now Celanese is selling off their 45% stake in the company for $1.5 billion. See a timeline of the JV and the products they've produced here.
Why are they selling?
Basically, Celanese has grown enough in Asia that it can compete against its joint venture. Celanese would rather have the cash to pay off that big fine mentioned in yesterday's column (joking).
Their real plans:
Celanese will be buying back $500 million of their shares and will use the rest of the cash for other possible acquisitions and future share repurchases. But in the words of Celanese CEO Lori Ryerkerk, "We plan to use this opportunity to monetize a historically passive investment and allocate significant capital to higher growth businesses within Celanese,". If that didn't make sense I hope everything else did.
Read more here.
Dow makes plastic and then picks it up for us
US-based Dow Chemical has launched a plastic recycling project in Nigeria to recycle water sachets. A water sachet is a bag of water, known for being the most affordable method of providing clean drinking water to Nigeria's citizens.
What's the plan?
Dow hopes to divert around 300 million sachets from ending up in a landfill or the environment. Nigerian waste management start-up, RecyclePoints, will be collecting the used water sachets and delivering them to Dow's facility. They hope to create a long term infrastructure for plastic recycling.
Zooming out:
Dow produces the plastic that goes into these bags. Those bags enable Nigeria's citizens (where 19% still don't have access to safe drinking water) to purchase water at an affordable price. And now, Dow is taking responsibility for cleaning up the waste.
Read more here.