Chevron said Monday it had agreed to buy US exploration and production company Noble Energy for $5 billion, the biggest petroleum acquisition since the industry downturn due to the coronavirus.

The deal will add about 18 percent to Chevron's total reserves and bring it new acreage Colorado and Wyoming's DJ Basin and the shale-rich Permian Basin in Texas and New Mexico, as well as in Israel and Equatorial Guinea.

"Our strong balance sheet and financial discipline gives us the flexibility to be a buyer of quality assets during these challenging times," said Chevron Chief Executive Mike Wirth.

"This is a cost-effective opportunity for Chevron to acquire additional proved reserves and resources."

The California-based petroleum giant said the total enterprise value of the transaction is $13 billion, including debt.

In acquiring Noble Energy, Chevron will add acreage in the United States, Israel and Equatorial Guinea In acquiring Noble Energy, Chevron will add acreage in the United States, Israel and Equatorial Guinea Photo: GETTY IMAGES NORTH AMERICA / JOE RAEDLE

The transaction is expected to close in the fourth quarter of 2020, Chevron said.

The deal follows an historic plunge in oil prices, with US futures sliping into negative territory in April amid a steep downturn in demand.

Since then, oil prices have recovered somewhat, with US benchmark contract West Texas Intermediate now around $40 a barrel.

However, the downturn has stressed smaller producers, spawning Chapter 11 bankruptcy filings by Whiting Petroleum and Chesapeake Energy.

Noble Energy jumped 9.8 percent to $10.60 in pre-market trading, while Chevron slipped 0.2 percent to $87.03.