Chevron Becomes Latest Driller to Plan Exit From Utica and Marcellus Drilling
Chevron Corp. expects to write down as much as $11 billion in the fourth quarter, more than half of it from its Appalachia natural gas assets after a slump in prices.
The U.S. oil major is considering the sale of shale-gas holdings, according to a statement Tuesday. The company said separately it intends to exit its stake in the Kitimat liquefied natural gas project in Canada. And Chevron also plans to keep its 2020 capital budget at $20 billion, the third consecutive year it hasn’t boosted spending.
The company’s actions come from a chief executive officer, Mike Wirth, whose mantra has been capital discipline. Wirth earlier this year earned $1 billion for the company by walking away from a bidding war for Anadarko Petroleum Corp. San Ramon, California-based Chevron is the best performer among the five Western oil majors this year, but it has faced mounting costs at its Tengiz project in Kazakhstan.Click here to read more.
“The Appalachia writedown should be baked in, but the others are incrementally negative” for the stock, said Muhammed Ghulam, a Houston-based analyst at Raymond James & Associates. “I would expect most companies to have to write down gas assets this year.”