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U.S.energy behemoth Chevron Corporation (CVX - Free Report) announced its 2017 capital spending plans on Dec 7, 2016. The second-largest U.S. oil company by market value has pegged its 2017 capital budget at $19.8 billion – the fourth consecutive reduction in the budget.
This $19.8 billion worth of capital and exploratory investment budget for 2017 is42% lower than the 2015 outlay. Also, the budget is expected to be at least 15% below the projected 2016 capital investments.
Chevron intends to focus on the completion of major projects that are currently under construction. Hence, by reducing its spending and concentrating on high return investments, Chevron expects to achieve its objective of becoming cash balanced in 2017.
Of the total budget, roughly 87% has been allocated for oil and gas exploration projects worldwide, while 11% has been set aside for downstream businesses.
Upstream: A major portion of the 2017 spending has been earmarked for large, multi-year developments. Chevron is planning to spend $17.3 billion for the exploration, production and natural gas-related projects, in keeping with its successful and focused drilling results in recent years. In 2017, the company is likely to undertake major initiatives in the PermianBasin developments in Texas and New Mexico, as well as opportunities in the Tengiz field in Kazakhstan and completion of the Gorgon and Wheatstone LNG projects in Australia.
Downstream: Capital spending in the downstream segment is expected to be $2.2 billion in 2017, primarily to improve refinery efficiency, maximize yield and produce cleaner fuels.
Other: The company is expected to spend approximately $0.3 billion in 2017 for technology, power generation and other corporate activities.
San Ramon, CA-based Chevron is one of the largest publicly traded oil and gas firms in the world, based on proved reserves. It is engaged in oil and gas exploration and production, refining and marketing of petroleum products, manufacturing of chemicals and other energy-related businesses.
Year to date, the Zacks categorized International Oil and Gas Integrated Industry has registered an impressive growth of 14.41%. However, the Chevron stock has outperformed the industry by gaining 27.21%.
This is because Chevron – one of the most oil-weighted majors – is poised to benefit from the recent OPEC deal and the subsequent advancement of crude oil. As it is, the company has been able to boost returns and remain competitive by embarking on aggressive cost-reduction initiatives. However, Chevron is experiencing signs of weakness in the refining business on fuel oversupply and weak demand.
As a result, Chevron currently carries a Zacks Rank #3 ( Hold), which implies that the stock will perform in line with the broader U.S. equity market over the next one to three months.
Some better-ranked players from the broader energy sector include Braskem S.A. (BAK - Free Report) , Ocean Rig UDW LLC and McDermott International Inc. . All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
In the last four quarters, Braskem posted an average positive earnings surprise of 105.5%.
Ocean Rig, on the other hand, delivered an average positive earnings surprise of 66.39% in the last four quarters.
In the last four quarters, McDermott posted an average positive earnings surprise of 250.00%.
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Chevron Provides 2017 Capex Budget Worth $19.8 Billion
U.S.energy behemoth Chevron Corporation (CVX - Free Report) announced its 2017 capital spending plans on Dec 7, 2016. The second-largest U.S. oil company by market value has pegged its 2017 capital budget at $19.8 billion – the fourth consecutive reduction in the budget.
This $19.8 billion worth of capital and exploratory investment budget for 2017 is42% lower than the 2015 outlay. Also, the budget is expected to be at least 15% below the projected 2016 capital investments.
Chevron intends to focus on the completion of major projects that are currently under construction. Hence, by reducing its spending and concentrating on high return investments, Chevron expects to achieve its objective of becoming cash balanced in 2017.
Of the total budget, roughly 87% has been allocated for oil and gas exploration projects worldwide, while 11% has been set aside for downstream businesses.
Upstream: A major portion of the 2017 spending has been earmarked for large, multi-year developments. Chevron is planning to spend $17.3 billion for the exploration, production and natural gas-related projects, in keeping with its successful and focused drilling results in recent years. In 2017, the company is likely to undertake major initiatives in the PermianBasin developments in Texas and New Mexico, as well as opportunities in the Tengiz field in Kazakhstan and completion of the Gorgon and Wheatstone LNG projects in Australia.
Downstream: Capital spending in the downstream segment is expected to be $2.2 billion in 2017, primarily to improve refinery efficiency, maximize yield and produce cleaner fuels.
Other: The company is expected to spend approximately $0.3 billion in 2017 for technology, power generation and other corporate activities.
CHEVRON CORP Price
CHEVRON CORP Price | CHEVRON CORP Quote
San Ramon, CA-based Chevron is one of the largest publicly traded oil and gas firms in the world, based on proved reserves. It is engaged in oil and gas exploration and production, refining and marketing of petroleum products, manufacturing of chemicals and other energy-related businesses.
Year to date, the Zacks categorized International Oil and Gas Integrated Industry has registered an impressive growth of 14.41%. However, the Chevron stock has outperformed the industry by gaining 27.21%.
This is because Chevron – one of the most oil-weighted majors – is poised to benefit from the recent OPEC deal and the subsequent advancement of crude oil. As it is, the company has been able to boost returns and remain competitive by embarking on aggressive cost-reduction initiatives. However, Chevron is experiencing signs of weakness in the refining business on fuel oversupply and weak demand.
As a result, Chevron currently carries a Zacks Rank #3 ( Hold), which implies that the stock will perform in line with the broader U.S. equity market over the next one to three months.
Some better-ranked players from the broader energy sector include Braskem S.A. (BAK - Free Report) , Ocean Rig UDW LLC and McDermott International Inc. . All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
In the last four quarters, Braskem posted an average positive earnings surprise of 105.5%.
Ocean Rig, on the other hand, delivered an average positive earnings surprise of 66.39% in the last four quarters.
In the last four quarters, McDermott posted an average positive earnings surprise of 250.00%.
Zacks’ Best Private Investment Ideas
In addition to the recommendations that are available to the public on our website, how would you like to follow all Zacks' private buys and sells in real time? Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>