On Monday, Chevron Corp (CVX.N) acquired shale producer PDC Energy Inc (PDCE.O) in a $7.6 billion stock-and-debt deal.

After Russia invaded Ukraine last year, the deal will boost Chevron’s U.S. production, capital expenditures, and cash flow.

Denver-based PDC is valued at $72 per share, 14% above its 10-day average ending Friday. Companies stated it would close by year-end.

“It’s a strong investment in our business in the U.S.,” CEO Michael Wirth told Reuters.

President Joe Biden blasted the corporation and rivals last year for not raising output as fuel costs rose.

After last year’s disappointing performance in the Permian basin of West Texas and New Mexico, analysts have questioned management’s capacity to allay concerns that the company’s main U.S. shale properties are declining.

“We expect these Permian concerns may linger,” said RBC Europe research analyst Biraj Borkhataria.

The acquisition will boost Chevron’s reserves by 10% and capital expenditures and free cash flow by $1 billion within a year.

PDC Energy climbed 8% as Chevron fell 1% in the morning session.

Chevron’s production in the Permian and Colorado-Wyoming DJ basin will increase by 260,000 bored after the acquisition.

“High-quality inventory,” stated Enverus M&A specialist Andrew Dittmar. Dittmar said the pricing valued PDC at its present production rate, calling its untapped reserves “essentially free.”

Since last year, Chevron executives in San Ramon, California, have sought U.S. acquisitions. In addition, the corporation recently announced it wants to lower its cash stockpile to boost shareholder profitability.

“We’re repurchasing shares at a rate of $17.5 billion per year,” Wirth said, adding that the shares exchanged for the properties equal less than two quarters. “So we’d buy those shares back very quickly.”

Wall Street has pressured the business to show it can keep boosting output at its Permian Basin shale properties after 2027.

Chevron said the acquisition will increase its yearly capital investment by $1 billion to $14 billion to $16 billion through 2027.

Chevron’s second Colorado and Wyoming expansion in three years is with PDC Energy.

After its 2020 $13 billion acquisition of Noble Energy, Chevron is a top producer in the Denver-Julesburg Basin.

In a statement, Chevron stated it would add 10% to its proved reserves at less than $7 per barrel by acquiring PDC.

Last year’s high crude prices gave the oil major $15.7 billion in cash and equivalents at the end of the first quarter, treble its operational activity.