Bad news for Chevron shareholders. No way Unocal is worth 18.5 billion.
I'm not sure Unocal is worth $18.5 billion based on their proved reserves of oil and gas. But the amount of additional oil and gas that's likely to be discovered on their leased acreage is much harder to estimate. Chevron and CNOOC may believe that there's much more oil & gas to be found in Unocal's properties, and if that turns out to be correct then Unocal could be worth $25 billion. That kind of information isn't readily available in SEC reports, so I can't estimate how much more oil & gas will be found. But I have a high regard for Chevron's management, so there's probably a substantial amount of undiscovered "black gold" on Unocal's properties.