Chevron’s $55 billion acquisition of Hess gives it a stake in Guyana’s Stabroek Block, containing at least 11 billion barrels of oil equivalent. The move boosts Chevron’s long-term growth prospects, addressing concerns about dwindling reserves and production. Investors welcomed the deal, anticipating sustained cash flow and dividends into the 2030s.

Chevron’s oil and gas reserves hit a decade low of 9.8 billion boe, with an organic reserve replacement ratio of just 45%. The acquisition of Hess is expected to significantly increase production volumes to 4.31 million boe/d by 2030. Shares fell 2% on Friday after the deal closed, following a 7.5% decline over the past year.

Exxon and CNOOC filed arbitration claims against Hess over the Stabroek Block, a critical asset in the Chevron-Hess deal. The resolution was essential, as losing the arbitration could have jeopardized the acquisition. Another challenge for Chevron is the expiration of its contract to operate the Tengiz oilfield in Kazakhstan in 2033.

Read more at Yahoo Finance: Chevron entry to Guyana oilfields solves company’s top challenge