The U.S Federal Trade Commission has granted hedge fund Elliott Management permission to acquire a stake in Noble Energy Inc. (NYSE: NBL). Two subsidiaries of Elliott have acquired unspecified stakes in Noble which earlier this year agreed to be acquired by Chevron Corp. (NYSE: CVX).

The acquisition, announced in July, would have Chevron paying $10.38 per share for all the outstanding shares of Noble. At the time, the acquisition price represented a premium of 7.6% to the price of Noble stock.

The $5 billion deal does not involve any cash. Chevron is paying for Noble by issuing 58 million new shares that will be exchanged for Noble shares at a ratio of roughly 1-for-9 (0.11.91 shares of Chevron for each share of Noble). Including the assumption of Noble’s debt, Chevron’s total tab runs to $13 billion.

As we commented at the time the deal was announced, Chevron got a pretty sweet deal, paying around $5 a barrel for Noble’s proved oil-equivalent reserves. The deal also includes approximately 7 billion risked barrels at a cost of around $1.50 per barrel.

A typical oil patch acquisition values proved barrels at around $8 each. It’s a fair bet that Paul Singer is going to want to receive at least that much for whatever size stake that Elliott Management has taken.

Killing the deal does not seem like a reasonable goal. No one is going to pay more for Noble than what Chevron has offered. With an oil market that could be under pricing pressure until early 2022, wringing more out of Chevron is likely Elliott’s objective.

But Chevron, which walked away from acquiring Anadarko after being outbid by Occidental Petroleum Corp. (NYSE: OXY), is not likely to pay more. Depending on the size of Elliott’s stake, though, the hedge fund could be angling for a meaningful stake in Chevron.

According to a recent Noble presentation, the target pro forma ownership stake of Noble shareholders in Chevron following completion of the acquisition is 3%. If Elliott nabs a sizeable stake in Noble, the hedge fund could stir up some interest among shareholders to push Chevron to throw off more cash (by selling assets) before the oil business gets any worse.

Both Chevron and Noble are trading lower Tuesday with Noble trading down 2.7% at $9.44 just ahead of the closing bell. Chevron stock traded down about 3.6% at $78.99.

As a group, energy stocks traded down about 3.4% Tuesday, trailing only the tech sector–down 4.3%–as the day’s big loser.

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