Chevron has been seeking this 'profitability shift' since MW started asset sales in earnest in 2018. Translation: we sell long-term but low-margin conventional assets, particularly 3rd world stuff, and plow the money back into North American UCRs (to wit: PDC, Noble, Atlas) which have fast payout but no long-term value. Makes earnings and stock price look good in the short-term. Also a little goes to stock buybacks, the dividend, and executive bonuses for such valiant decisions. Remember this headline from just a couple years ago?: "Chevron: Next Oil Major To Lose Billions Exiting The Marcellus". Experience has shown us that UCRs have very short production lives (~10 yrs; see Eagle Ford, Bakken, Barnett, Marcellus, Utica, anything in southern Oklahoma, etc.). Chevron's real problems will come when the Permian and Colorado start rapid production declines, probably later this decade, and there are no other reserves to substitute. (Hint: expect more M&A activity)
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But this and sell that….sounds like business.
Great for @2rla to give us a P-e-Wee Herman response...
Even if there was long term value in Congo (whatever that means), if a buyer sees more than we do, it makes sense to sell. This applies to any asset and we don’t sell nearly as much as we should.
The inventive structure for executives favors high share price at all cost. Their compensation is almost exclusively based on how much CVX is worth. If that means share buybacks or fleecing the corporation for all of its long term value, it doesn’t matter to them. They will be retired after making $30MM per year by making ecocultist analysts, ESG scoring bodies, and coastal government pension fund managers happy. This company doesn’t have an outlook beyond 10 years.
OP is so smart and clear on how to run a an super major, that he/she should be CEO. What is your excuse on why you are not?
With nearly every topic, one can start the drumroll until a comment includes the meaningless “woke” canard. Mission accomplished on this topic.
There is no long term growth in Congo, for us or any operator. The entire country is marginal. Dump it.
MW and his woke friends have no interest in long term growth. That's someone else's concern as long as his bonus keeps rolling in
All investors want to see is cash flow now, not tomorrow but now. Acquiring UCR and blowing them down works. Investors have no appetite to wait for long term projects to come online into a lower priced environment in the future.
Congo has sucked since forever. If someone else sees value there, more power to them, especially if they assume the abandonment obligations of our filthy operations.
It amazes me how this company operates… lack of long term planning and inability to effectively run existing operations and grow production organically