Chevron is buying Anadarko Petroleum for $33 billion, energizing its oil and gas drilling capabilities in Texas and the Gulf of Mexico while vaulting itself into a new league.

The combined company will remain far behind Exxon Mobil Corp. and Royal Dutch Shell Plc. in market capitalization, but Chevron will jump from being the world’s fourth-biggest energy producer, to second, according to Wood Mackenzie.

“Chevron now joins the ranks of the UltraMajors — and the big three becomes the big four,” wrote Roy Martin, senior analyst at Wood Mackenzie, referring to Exxon, Shell and BP.

The cash-and-stock deal announced today comes as U.S. crude prices have shot up 40% this year.

Chevron gets access to Anadarko’s liquid natural gas operations in Mozambique and it would control a 75-mile-wide corridor across the Delaware Basin, a region bountiful with natural gas.

Oil prices have been on the rise as OPEC members cut production.

OPEC said this week that its output had been slashed by more than a half million barrels a day last month to just over 30 million barrels, a level not seen since early 2015.

That is largely being driven by the energy powerhouse Saudi Arabia, which last month removed another 324,000 barrels of oil a day from the market.

U.S. crude was selling for nearly $65 a barrel today. But there are signals that global economic growth is slowing.

The acquisition of Anadarko could give Chevron a little more breathing room when crude prices do fall.

With savings the companies plan to book and rising cash flow, Chevron said today that it will bump up annual stock buybacks to $5 billion, from $4 billion a year, once the transaction is complete.

Chevron plans to divest $15 billion to $20 billion in assets between 2020 and 2022, with proceeds used to lower debt and to return additional cash to shareholders, the company said.

“This transaction builds strength on strength for Chevron,” said Chairman and CEO Michael Wirth. “The combination of Anadarko’s premier, high-quality assets with our advantaged portfolio strengthens our leading position in the Permian, builds on our deepwater Gulf of Mexico capabilities and will grow our LNG business.”

Anadarko shareholders will receive 0.3869 shares of Chevron and $16.25 in cash for each share they own, or $65 a share. Chevron will issue about 200 million shares and pay about $8 billion in cash. It will also assume about $15 billion in debt.

Chevron Corp. will keep its headquarters in San Ramon, California. Anadarko Petroleum Corp. is based in The Woodlands, Texas.

The deal is expected to close in the second half of the year. It still needs approval from shareholders of Anadarko Petroleum Corp. and regulators.

Shares of Anadarko jumped 33% today, while Chevron’s stock fell 5%.