Someone suggested that we may need to file for BKO restricting. I don't think that will happen. We will keep divesting and then some entity or group of entities will buy us. But who?
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Alphabet buying chevron would be hilarious, the frat boys getting owned by all the geeks they did not allow into the party. If so that would need to be turned into a reality tv show.
How about Alphabet (aka Google)? May be this will be their first foray into oil & gas! They will invest in superior technology to make shale drilling even cheaper and disrupt the OPEC hegemony and the conventional oil business.
The U.S. Government would never approve that. They didn't low the Chinese to purchase a much smaller oil company with some GOM assets.
It's not so much that Chevron isn't weakened and an acquisition target. It's the reality that private equity doesn't want to deal with the complexities of Chevron because the upside isn't big enough (PE wants a 10x return in a year or two and that's not happening), Shell ready made their acquisition, XOM wouldn't receive regulatory approval plus they already have a substantial portion of our top asset- TCO. There's really no one out there with the size and capability to purchase us who also would get approval from the government.
The Cinese will buy Chevron
Chevron won't be purchased. I do think Chevron emerges as a smaller company after asset sales though. The opposite of Watson'd vision to use what we thought was an industry leading portfolio (and maybe it was before we f'ed it up) to chase XOM.
Remember, we didn't just screw up Gorgon, Wheatsone and ALNG. We also couldn't get Kitimat, Rosebank and a number of additional relatively smaller but still signifanct asset development projects off te ground (South Ndola, Malange, Kurdistan, E Europe Fracking, delays to FGP's FID). If we could execute projects, Gorgon and Wheatstone would be generating cash flow and some of the now cancelled/delayed projects I mentioned would be progressing, our annual capex would still be lower than it is today and our revenue higher from having more production online. I see what Watson wanted to do a competent company probably could have pulled it off. It was a gamble with our project execution inabilities though and we lost.
Once our stock slides down to $0.99, maybe I and a few well-off friends can buy Chevron. Lol. I'll hire my layed-off buddies back and I'll assume the role of CEO. Only this time, the company will be managed the right way!
No one will buy us out right. We will sell pieces here and there until we are a much much smaller company.
This will be unprecedented territory for a major oil company. It is going to be spending a ton more than its earning. net income for Chevron was 571 million....next quarter will have a negative net income. Chevron floated 6 Billion in bonds this year in February and decreasing revenues from oil price pressure to pay dividend. The bond sale generated liquidity and the bonds market took the offering at T bill rates! Chevron will never get those rates with it current balance sheet and can only leverage bond offerings for so long......and to give you a perspective of how financing works lets not forget Shells buying BG for 70 billion cash AND SHARES also 10 billion in debt....Under terms of the cash and stock deal, BG shareholders will own about 19% of the combined company, which will have a market capitalization of about $240 billion. Or Exxons buying of XTO for 40 billion including debt. You can finance these in many different ways. Under market rules will the SEC allow the two biggest companies....a fortune 1 and fortune 3 to merge? I should not use merge but buy.....In any case Chevron will do everything in order to keeps its credibility as that is the most important thing for a company to do......if oil stays depressed for 1 year and these projects are eating up money? Chevron spent more than 60 percent of its market cap in 3 years. Another bond issue, an asset sale to keep it afloat? But who is buying assets??? Cloyce Talbot who owned Patterson-UTI kept a ton of cash on hand for down turns. He bout a ton of rigs and frac equipment at a 1/10 of the cost on all downturns. Chevron floated the PA acreage (AMBU) and was getting a whif of 20% of asking price. Would you take an 80 percent discount? Maybe if you need to pay the mortgage lol.........
Standard oil? Lol that would be one big full circle!
If CVX cuts the dividend, and stock drops to $50, then it's really prime time for a buy out. ExxonMobil could buy CVX, and the new company could be called Standard Oil.
In my opinion, no one could realistically buy us whole. Even if it stock prices were to get halved from current price, we'd still be an $80+ billion mkt cap. To put that in perspective, Berkshire Hathaway's biggest acquisition ever was $32 billion. Exxon might be able to afford that price tag with creative financing, but would run into serious anti-trust issues, so very unlikely.
Walmart
I meant to say restructuring. Darn auto-correct