On Monday local time, Western Oil, favored by the "stock god" Buffett, announced that the company will acquire oil drilling company CrownRock for $12 billion, expected to be completed in the first quarter of 2024. The acquisition of CrownRock by Western Oil is the third transaction recently announced by the US energy industry. In October this year, ExxonMobil announced its acquisition of Pioneer Natural Resources for $59.5 billion, while Chevron announced its acquisition of Hess for $53 billion.
Another news is that Nvidia CEO Huang Renxun recently made his first visit to Vietnam. He stated that Nvidia regards Vietnam as its "home" and has confirmed plans to establish a base in Vietnam. Huang Renxun stated that the Vietnamese market is a very important market and plans to establish a chip production center in Vietnam to develop the semiconductor industry. He also stated that he will establish a legal entity in Vietnam and improve the local artificial intelligence infrastructure and personnel skills.
In addition, Goldman Sachs analysts predict that Federal Reserve policymakers will cut interest rates twice before the end of next year, and the expected time for the first rate cut will be advanced to the third quarter. Previously, Goldman Sachs predicted that the Federal Reserve would begin its first interest rate cut in December 2024.
In the US stock market, all three major stock indices closed slightly higher. As of the close, the Dow Jones Industrial Average rose 157.06 points, or 0.43%, to 36404.93 points; The Nasdaq rose 28.51 points, or 0.20%, to 14432.49 points; The S&P 500 index rose 18.07 points, or 0.39%, to 4622.44 points.
Big Mergers and Acquisitions in the Oil Industry! Western Oil invests $12 billion to acquire CrownRock
On Monday local time, Western Oil, favored by the "stock god" Buffett, announced that the company will acquire Texas based oil drilling company CrownRock for $12 billion, expected to be completed in the first quarter of 2024.
Western Oil Company announced that it has reached an acquisition agreement to acquire CrownRock in cash and stock for a transaction value of approximately $10.8 billion. In addition, the acquisition terms require Western Oil to assume the $1.2 billion debt held by CrownRock. Therefore, the total value of this transaction is $12 billion.
It is understood that CrownRock is a large private energy producer jointly established by CrownQuest Operating LLC and Lime Rock Partners, headquartered in Midland, Texas, United States. And Midland is located in the Permian Basin, a major energy production hub in the United States.
The press release stated that this transaction will increase Western Oil's daily production capacity by 170000 barrels of oil equivalent and provide 1700 undeveloped locations, of which 1250 are ready for development. If the breakeven point is below $60 per barrel, i.e. the WTI crude oil price is above $60, operators can profit from shale oil extraction. There are 750 locations with breakeven points even below $40.
Did Buffett participate in this transaction? Vicki Hollub, CEO of Western Oil Company, said in a media interview, "Berkshire Hathaway was not involved in the CrownRock deal. Berkshire and Buffett provided assistance in the acquisition of Anadarko. If it weren't for Berkshire and Buffett, we wouldn't have had it now. However, we don't need Berkshire's help with this deal."
Previously, Buffett had repeatedly increased his holdings in Western Oil, and the latest data shows that Buffett's Berkshire Hathaway company's shareholding in Western Oil has reached about 26%.
The US energy industry has been making frequent acquisitions recently, with Western Oil's acquisition of CrownRock being the third transaction announced recently. In October this year, ExxonMobil announced its acquisition of Pioneer Natural Resources for $59.5 billion, while Chevron announced its acquisition of Hess for $53 billion.
NVIDIA CEO Huang Renxun: Plans to establish a chip production center in Vietnam
Nvidia CEO Huang Renxun recently made his first visit to Vietnam. According to reports, he attended a semiconductor cooperation conference hosted by the Vietnam Investment Bureau on Monday to discuss with local companies.
He stated that Nvidia regards Vietnam as its "home" and has confirmed plans to establish a base in Vietnam. Huang Renxun stated that the Vietnamese market is a very important market and plans to establish a chip production center in Vietnam to develop the semiconductor industry. He also stated that he will establish a legal entity in Vietnam and improve the local artificial intelligence infrastructure and personnel skills.
"Vietnam is already our partner because we have millions of customers here. Nvidia and Vietnam will continue to deepen their partnership, and Nvidia hopes to expand cooperation with Vietnamese companies such as Viettel, FPT, Vingroup, VNG, and will support Vietnam's manual training and infrastructure construction," said Huang Renxun.
According to relevant reports, Nvidia has invested $250 million in Vietnam and has partnered with leading technology companies in Vietnam to fully deploy artificial intelligence in the cloud computing, automotive manufacturing, and healthcare industries.
Prior to his visit to Vietnam, Huang Renxun also visited multiple Asian countries such as Japan, Singapore, and Malaysia last week, most of which were Southeast Asian countries, demonstrating his emphasis on the Southeast Asian market. Currently, Nvidia has announced that it has held negotiations in Singapore regarding potential large-scale investments in the future and is assisting the Singapore government in developing large-scale models; Invest 20 billion Malaysian Ringgit (approximately 4.29 billion US dollars) in Malaysia and collaborate with YTL (Malaysia's Yang Zhongli Group) to build AI infrastructure.
Goldman Sachs changes its stance: The Federal Reserve will cut interest rates twice next year
On December 10th local time, Goldman Sachs analysts predicted that Federal Reserve policymakers will cut interest rates twice before the end of next year, and the expected time for the first rate cut will be advanced to the third quarter. Previously, Goldman Sachs predicted that the Federal Reserve would begin its first interest rate cut in December 2024.
Goldman Sachs stated that healthy economic growth and labor market data indicate that the timing of interest rate cuts is not imminent, but better inflation news suggests that normalizing interest rate cuts may come a bit earlier.
At present, the Federal Reserve maintains its benchmark interest rate between 5.25% and 5.5% unchanged. The two rate cuts mean that by the end of 2024, the federal funds rate will drop to 4.875%, compared to Goldman Sachs' previous prediction of 5.13%.
At present, the latest pricing of interest rate swap contracts shows that the market has basically digested the first interest rate cut in May next year. But traders have reduced their expectations for an overall interest rate cut next year. Prior to the release of US non farm payroll data last week, traders expected a rate cut of approximately 115-125 basis points in 2024. After the release of non farm employment data, the index was approximately 109 basis points.
This week, the Federal Reserve is about to hold its final interest rate meeting for 2023, and the market expects to remain calm, with most of the focus on the speech by Federal Reserve Chairman Powell. Powell is expected to emphasize that the Federal Reserve will only act cautiously while giving it some flexibility.