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  • buy_the_fear_101 buy_the_fear_101 Aug 29, 2012 10:04 AM Flag

    Barrons - Is Cash-Flush Chevron Quietly Shopping For Deals?

    Is Cash-Flush Chevron Quietly Shopping For Deals?

    By Teresa Rivas

    Chevron‘s (CVX) cash level has risen 60% in the past year as high oil prices have fattened coffers–will it plan to go shopping?

    As the Wall Street Journal reports, investors are wondering if the company is growing its cash hoard to brace for higher costs or perhaps purchase a smaller rival.

    With more cash on its balance sheet than any publicly traded energy company, even dwarfing Exxon‘s (XOM) position, Chevron could retire all its debt and still have $11 billion to spare. The company has of course been mum on any potential prospects, but acknowledged that its position is strong.

    The Journal article quotes a Morningstar analyst: “I wouldn’t be surprised if [Chevron] took a look at companies trading at a substantial discount.”

    With less exposure to natural gas than some peers, the company has in turn felt less negative impact of the commodity’s low prices, which have hurt other energy companies; some are suggesting even Chesapeake Energy (CHK) could be a potential target. Others who say that would be too complicated, think Chevron could snap up a smaller company like Hess (HES).

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