Chevron Announces Atlas Energy Acquisition

Deutsche Bank has published a research report on Chevron Corporation

after the company announces its acquisition of Atlas Energy for which it has provided few details. In the report, Deutsche Bank writes "DB is restricted on Atlas and offers no opinion on the announced deal. (This report, other than the press release details and Chevron's comments, excludes the acquisition of Atlas Energy

announced on Nov 9.) George Kirkland spoke of ATLS's resource quality, the long-term organic opportunity to an aspiration of 100kboe/d of production, its proximity to market helped by its infrastructure, the oil industry's deep history/position in PA, the operational quality and environmental stewardship of ATLS evident from Chevron's due diligence, the ability to use the maximum of Reliance's JV spend carry (and thus low capital requirements), the plan to leave ATLS activity unchanged, the deal's overall high returns, and a scale that is far too small to hurt key CVX positives such as its best-in-class net income per barrel. By the way, CVX avoided Iraq for that very negative; poor returns, low net income per bbl." Deutsche Bank maintains its Hold rating and $80 price target. Chevron Corporation closed yesterday at $85.17.