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Chevron (CVX) Plans Duvernay Asset Sale, Optimizes Portfolio

U.S. supermajor Chevron Corporation (CVX) has disclosed its intention to divest its shale-gas business in Alberta's Duvernay field, signaling a strategic effort to streamline operations following recent acquisitions. Boasting a 70% interest in around 235,000 acres, Chevron currently yields 40,000 barrels of oil and gas per day from these assets.

Analysts project the Duvernay assets' value to be as high as $900 million. This divestment aligns with Chevron's broader strategy to shed $10 to $15 billion in assets, emphasizing an intensified focus on high-performing sectors. While the Duvernay field holds substantial value, its sale underscores Chevron's dedication to optimizing its global portfolio. In actively seeking potential buyers, the overarching objective is portfolio diversification, prioritizing high-return assets, geographical diversity, and reduced carbon intensity.

The Duvernay move is part of its broader asset divestment strategy, following the $53 billion Hess Corp. acquisition. Over the past few years, the company’s other significant buyouts include PDC Energy and Noble Energy, which have significantly expanded Chevron's oil and gas output.

Chevron's strategic move involves selling its entire 70% stake in the oil and gas play in Western Alberta, underscoring the company's commitment toward enhancing portfolio quality. Following a challenging 2023, the focus has shifted toward performance improvement, particularly in prolific areas like the Permian basin and Guyana. The Duvernay sale aligns seamlessly with Chevron's ambitious target of divesting $10 to $15 billion in assets by 2028, a strategic initiative to optimize its global energy portfolio.

Zacks Rank & Stock Picks

Chevron is one of the largest publicly traded oil and gas companies in the world, with operations that span almost every corner of the globe. The company carries a Zacks Rank #3 (Hold) at present.          

Meanwhile, investors interested in the energy sector might look at operators like Oceaneering International OII, Sunoco LP SUN and Helix Energy Solutions Group HLX. OII and SUN currently carry a Zacks Rank #1 (Strong Buy), while HLX is a Zacks Rank #2 (Buy) stock.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Oceaneering International: The 2023 Zacks Consensus Estimate for OII indicates 177.4% year-over-year earnings per share growth.

Oceaneering is valued at around $2 billion. OII has seen its shares rise 5.9% in a year.

Sunoco LP: The 2023 Zacks Consensus Estimate for SUN indicates 30.3% year-over-year earnings per unit growth.
CVX
Sunoco is valued at around $6 billion. SUN has seen its units rise 30.1% in a year

Helix Energy Solutions Group: The 2023 Zacks Consensus Estimate for HLX indicates 143.8% year-over-year earnings per share growth.

Helix Energy Solutions is valued at around $1.4 billion. HLX has seen its shares rise 24.9% in a year.

Disclaimer: This article has been written with the assistance of Generative AI. However, the author has reviewed, revised, supplemented, and rewritten parts of this content to ensure its originality and the precision of the incorporated information.

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Chevron Corporation (CVX) : Free Stock Analysis Report

Sunoco LP (SUN) : Free Stock Analysis Report

Oceaneering International, Inc. (OII) : Free Stock Analysis Report

Helix Energy Solutions Group, Inc. (HLX) : Free Stock Analysis Report

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