(NYSE: CVX) is making a big splash. The oil giant has agreed to acquire PDC Energy (NASDAQ: PDCE) in an all-stock deal valuing the oil and gas producer at $7.6 billion, including the assumption of debt. The company expects the highly complementary transaction will be accretive to all its key financial metrics, including adding $1 billion to its annual free cash flow. 

Here's a closer look at the deal and how it will benefit the oil stock, which remains a top holding of Warren Buffett's Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B).

Chevron is exchanging 0.4638 of its shares for each PDC Energy share, implying a purchase price of $72 per share or $6.3 billion. That's a 14% premium to PDC Energy's average price over the last 10 trading days. It's also assuming PDC Energy's roughly $1.3 billion in debt, pushing the transaction's total enterprise value to $7.6 billion. 

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Source Fool.com