Chevron Announces Agreement to Acquire PDC Energy — Chevron

Jan 29, 2024

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SAN RAMON, Calif. and DENVER, Colo., May 22, 2023 – Chevron Corporation (NYSE: CVX) announcedtoday that it has entered into a definitive agreement with PDC Energy, Inc. (NASDAQ: PDCE) to acquire all of theoutstanding shares of PDC in an all-stock transaction valued at $6.3 billion, or $72 per share. Based on Chevron'sclosing price on May 19, 2023 and under the terms of the agreement, PDC shareholders will receive 0.4638 sharesof Chevron for each PDC share. The total enterprise value, including debt, of the transaction is $7.6 billion.

The acquisition of PDC provides Chevron with high-quality assets expected to deliver higher returns in lower carbonintensity basins in the United States. PDC brings strong free cash flow, low breakeven production and developmentopportunities adjacent to Chevron's position in the Denver-Julesburg (DJ) Basin, as well as additional acreage toChevron's leading position in the Permian Basin.

"PDC's attractive and complementary assets strengthen Chevron's position in key U.S. production basins," saidChevron Chairman and CEO Mike Wirth. "This transaction is accretive to all important financial measures andenhances Chevron's objective to safely deliver higher returns and lower carbon. We look forward to welcomingPDC's team and shareholders to Chevron and continuing both companies’ focus on safe and reliable operations."

"The combination with Chevron is a great opportunity for PDC to maximize value for our shareholders. It provides aglobal portfolio of best-in-class assets," said Bart Brookman, PDC President and CEO. "I look forward to blendingour highly complementary organizations, and I’m excited that PDC's assets will help propel Chevron toward ourshared goal for a lower carbon energy future."

Transaction Benefits

Transaction Details

The acquisition consideration is structured with 100 percent stock utilizing Chevron's equity. In aggregate, uponclosing of the transaction, Chevron will issue approximately 41 million shares of common stock. Total enterprisevalue of $7.6 billion includes net debt.

The transaction has been unanimously approved by the Boards of Directors of both companies and is expected toclose by year-end 2023. The acquisition is subject to PDC shareholder approval. It is also subject to regulatoryapprovals and other customary closing conditions.

The transaction price represents a premium of 14% on a 10-day average based on closing stock prices on May 19,2023.

Advisors

Morgan Stanley & Co. LLC is acting as lead financial advisor to Chevron. Evercore also advised Chevron. Paul,Weiss, Rifkind, Wharton & Garrison LLP is acting as legal advisor to Chevron. J.P. Morgan Securities LLC is actingas lead financial advisor to PDC Energy and provided a fairness opinion to the Board of Directors. Wachtell, Lipton,Rosen & Katz and Davis Graham & Stubbs are jointly serving as the Company's legal counsel. PJT Partners alsoadvised PDC Energy.

Conference Call

Chevron will discuss its proposed acquisition of PDC with security analysts in a call today, Monday, May 22, 2023, at8:00 a.m. PT. A webcast of the discussion will be available in a listen-only mode to individual investors, media, andother interested parties on Chevron's website at www.chevron.com under the "Investors" section, or by calling800-378-6902 and providing the conference ID 5318663. Prepared remarks and presentation materials for today'scall will be available prior to the call at approximately 5:30 a.m. PT and located under "Events and Presentations" inthe "Investors" section on the Chevron website.

About Chevron

Chevron is one of the world's leading integrated energy companies. We believe affordable, reliable and ever-cleanerenergy is essential to enabling human progress. Chevron produces crude oil and natural gas; manufacturestransportation fuels, lubricants, petrochemicals and additives; and develops technologies that enhance our businessand the industry. We aim to grow our traditional oil and gas business, lower the carbon intensity of our operationsand grow new lower carbon businesses in renewable fuels, hydrogen, carbon capture, offsets and other emergingtechnologies. More information about Chevron is available at www.Chevron.com.

About PDC Energy

PDC Energy, Inc. is a domestic independent exploration and production company that acquires, explores anddevelops properties for the production of crude oil, natural gas and NGLs, with operations in the Wattenberg Field inColorado and Delaware Basin in west Texas. Its operations in the Wattenberg Field are focused in the horizontalNiobrara and Codell plays and our Delaware Basin operations are primarily focused in the horizontal Wolfcampzones.

NOTICE

As used in this news release, the term "Chevron" and such terms as "the company," "the corporation," "our," "we,""us" and "its" may refer to Chevron Corporation, one or more of its consolidated subsidiaries, or to all of them takenas a whole. All of these terms are used for convenience only and are not intended as a precise description of any ofthe separate companies, each of which manages its own affairs.

Please visit Chevron's website and Investor Relations page at www.Chevron.com and www.Chevron.com/investors,LinkedIn: www.linkedin.com/company/Chevron, Twitter: @Chevron, Facebook: www.facebook.com/Chevron, andInstagram: www.instagram.com/Chevron, where Chevron often discloses important information about the company,its business, and its results of operations.

Non-GAAP Financial Measures - This news release includes free cash flow. Free cash flow is defined as net cashprovided by operating activities less capital expenditures and generally represents the cash available to creditorsand investors after investing in the business. The company believes this measure useful to monitor the financialhealth of the company and its performance over time.

CAUTIONARY STATEMENTS RELEVANT TO FORWARD-LOOKING INFORMATION FOR THE PURPOSE OF"SAFE HARBOR" PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

This communication contains forward-looking statements within the meaning of the Private Securities LitigationReform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the SecuritiesExchange Act of 1934, as amended. These forward-looking statements generally include statements regarding thepotential transaction between Chevron Corporation ("Chevron") and PDC Energy, Inc. ("PDC"), including anystatements regarding the expected timetable for completing the potential transaction, the ability to complete thepotential transaction, the expected benefits of the potential transaction (including anticipated accretion to return oncapital employed, free cash flow, and earnings per share, as well as the expected delivery of higher returns andlower upstream carbon intensity) and projected operational and capital synergies, projected financial information,future opportunities, and any other statements regarding Chevron's and PDC's future expectations, beliefs, plans,objectives, results of operations, financial condition and cash flows, or future events or performance. Words orphrases such as "anticipates," "expects," "intends," "plans," "targets," "advances," "commits," "drives," "aims,""forecasts," "projects," "believes," "approaches," "seeks," "schedules," "estimates," "positions," "pursues," "progress,""may," "can," "could," "should," "will," "budgets," "outlook," "trends," "guidance," "focus," "on track," "goals,""objectives," "strategies," "opportunities," "poised," "potential," "ambitions," "aspires" and similar expressions areintended to identify such forward-looking statements. All such forward-looking statements are based on currentexpectations of Chevron's and PDC's management and therefore involve estimates and assumptions that aresubject to risks, uncertainties and other factors that could cause actual results to differ materially from the resultsexpressed in the statements. Key factors that could cause actual results to differ materially from those projected inthe forward-looking statements include the ability to obtain the requisite PDC stockholder approval; uncertainties asto the timing to consummate the potential transaction; the risk that a condition to closing the potential transactionmay not be satisfied; the risk that regulatory approvals are not obtained or are obtained subject to conditions that arenot anticipated by the parties; the effects of disruption to Chevron's or PDC's respective businesses; transactioncosts; Chevron's ability to achieve the benefits and projected operational and capital synergies from the proposedtransaction; Chevron's ability to promptly, efficiently and effectively integrate acquired operations into its ownoperations; unknown liabilities; the diversion of management time on transaction-related issues; and the effects ofindustry, market, economic, political or regulatory conditions outside of Chevron's or PDC's control. Additional risksthat may affect Chevron's results of operations and financial position appear in Part I, Item 1A "Risk Factors" ofChevron's Annual Report on Form 10-K for the year ended December 31, 2022, and in subsequent filings with theU.S. Securities and Exchange Commission ("SEC"). Additional risks that may affect PDC's results of operations andfinancial position appear in Part I, Item 1A "Risk Factors" of PDC's Annual Report on Form 10-K for the year endedDecember 31, 2022, and in subsequent filings with the SEC. Other unpredictable or factors not discussed in thisnews release could also have material adverse effects on forward-looking statements. Neither Chevron nor PDCassumes any obligation to update any forward-looking statements, except as required by law. Readers are cautionednot to place undue reliance on these forward-looking statements that speak only as of the date hereof.

IMPORTANT INFORMATION FOR INVESTORS AND STOCKHOLDERS

This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or asolicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer,solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any suchjurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements ofSection 10 of the Securities Act of 1933, as amended. In connection with the potential transaction, Chevron expectsto file a registration statement on Form S-4 with the SEC containing a preliminary prospectus of Chevron that alsoconstitutes a preliminary proxy statement of PDC. After the registration statement is declared effective, PDC will maila definitive proxy statement/prospectus to stockholders of PDC. This communication is not a substitute for the proxystatement/prospectus or registration statement or for any other document that Chevron or PDC may file with theSEC and send to PDC's stockholders in connection with the potential transaction. INVESTORS AND SECURITYHOLDERS OF CHEVRON AND PDC ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS ANDOTHER DOCUMENTS FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOMEAVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Investors and security holders will beable to obtain free copies of the proxy statement/prospectus (when available) and other documents filed with theSEC by Chevron or PDC through the website maintained by the SEC at http://www.sec.gov. Copies of thedocuments filed with the SEC by Chevron will be available free of charge on Chevron's website at http://www.chevron.com/investors. Copies of the documents filed with the SEC by PDC will be available free ofcharge on PDC's website at http://www.pdce.com/investors-overview.

Chevron and PDC and certain of their respective directors, certain of their respective executive officers and othermembers of management and employees may be considered participants in the solicitation of proxies with respect tothe potential transaction under the rules of the SEC. Information about the directors and executive officers ofChevron is set forth in its Annual Report on Form 10-K for the year ended December 31, 2022, which was filed withthe SEC on February 23, 2023, and its proxy statement for its 2023 annual meeting of stockholders, which was filedwith the SEC on April 12, 2023. Information about the directors and executive officers of PDC is set forth in itsAnnual Report on Form 10-K for the year ended December 31, 2022, which was filed with the SEC on February 22,2023, and its proxy statement for its 2023 annual meeting of stockholders, which was filed with the SEC on April 12,2023. These documents can be obtained free of charge from the sources indicated above. Additional informationregarding the interests of such participants in the solicitation of proxies in respect of the potential transaction will beincluded in the registration statement and proxy statement/prospectus and other relevant materials to be filed withthe SEC when they become available.

Contacts

Investor Contacts: Jake Spiering Chevron [email protected]

Aaron Vandeford PDC Energy [email protected]

Media Contacts: Braden Reddall Chevron [email protected](925) 842 - 2209

Andrew Siegel / Mahmoud Siddig Joele Frank, Wilkinson Brimmer Katcher (212) 355 - 4449

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