US oil and gas company Hess is currently embroiled in three lawsuits over claims of inadequate disclosures concerning its proposed $53bn acquisition by Chevron.  

In October 2023, Chevron and Hess entered a definitive agreement for an all-stock transaction, with Chevron aiming to acquire Hess’ 30% interest in the Stabroek block.  

This block is operated by ExxonMobil Guyana, which holds a 45% stake, and includes China National Offshore Oil Corporation (CNOOC) Petroleum Guyana with a 25% share. 

However, the acquisition has hit a snag due to a dispute with ExxonMobil and is pending approval from the Federal Trade Commission.  

The conflict revolves around ExxonMobil’s initiation of arbitration proceedings in March this year, claiming pre-emption rights over Hess’ stake in the block, which is estimated to contain up to 11 billion barrels of reserves.  

Following ExxonMobil’s lead, CNOOC also began arbitration proceedings to assert its rights. 

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The ongoing lawsuits are seeking to delay or prevent the completion of the deal as Hess shareholders are about to cast their votes on the transaction on 28 May.  

Hess, in a Securities and Exchange Commission (SEC) filing, said it believes the lawsuits are without merit and that the disclosures in the proxy statement comply with the law. 

To address the plaintiffs’ claims and avoid further potential costs, Hess has chosen to voluntarily supplement the proxy statement with additional disclosures. 

Alongside these legal actions, Hess has received demand letters from several purported stockholders, also alleging disclosure deficiencies. 

Chevron has expressed that the merger’s success is contingent on resolving the dispute with ExxonMobil and CNOOC.  

Should the deal fall through, Hess faces a break-up fee obligation to Chevron of approximately $1.7bn.