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Chevron Production Growth Target on Track

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In its 2014 Annual Meeting of Stockholders, U.S. energy giant Chevron Corp. (CVX) declared that its production growth target is on track. The company intends to reach a production level of 3.1 million barrels of oil-equivalent per day by 2017, marking 20% increase from the 2013 output. Further growth can be expected toward the end of the decade.

Chevron has over 70 projects in the pipeline, due to start by 2020. The company’s Gorgon LNG project in Australia is 80% completed and due to commence operations in mid-2015. The Wheatstone project, also in Australia, is progressing according to plan too and commencement is expected in 2016.

Chevron’s growth plans include $39.8 billion investment in 2014, with focus on oil and gas associated legacy assets. However, the projected expenditure is lower than the year-ago capital spending by around $2 billion.

Chevron also highlighted some of the key performance metrics of 2013. The previous year marked the 26th consecutive year of dividend hike for Chevron. The company stated that in 2013, it had an industry leading average earnings per barrel and upstream return on capital employed (:ROCE).

Chevron stated that its Downstream and Chemicals business also reported strong results in 2013. The growth focus of this business would include important projects by the Chevron and Phillips 66’s (PSX) joint-venture (:JV), Chevron Phillips Chemical. The JV intends to start the largest on-purpose 1-hexene plant this year. It was also a pioneer in creating a world-scale ethylene cracker and derivatives unit. Moreover, Chevron’s Pascagoula base oil plant that is expected to achieve full production by mid-2014 would make the company a leading premium base oil producer.  

Following its solid-run last year and the progress of projects, Chevron believes that it is well positioned to increase earnings and shareholder value. Chevron, the second largest U.S. oil company by market value after Exxon Mobil Corp. (XOM), currently carries a Zacks Rank #3 (Hold).

Meanwhile, one can consider a better-ranked stock from the integrated oil space such as Repsol, S.A. (REPYY), which has a Zacks Rank #2 (Buy).

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