Chevron Morocco Exploration Ltd. – a subsidiary of U.S. energy behemoth Chevron Corporation ( CVX - Analyst Report ) – signed an agreement with local company Office National Des Hydrocarbures Et Des Mines for exploring three offshore sites. Per the deal, Chevron got 75% working interest in those areas covering roughly 11,300 square miles of area with water depth ranging from 330 feet to 14,700 feet. The remaining 25% interest remains with Morocco’s Office National Des Hydrocarbures Et Des Mines.

The agreement calls for Chevron to procure seismic data and conduct studies in all those three offshore sites – Cap Cantin Deep, Cap Rhir Deep and Cap Walidia Deep – located within 60 to 120 miles off the Moroccan coast.

Management believes that this development will help the company to upgrade its knowledge about promising geology in those emerging areas apart from enhancing Chevron’s growth strategy.

San Ramon, California-based Chevron displays a strong portfolio of global projects, targeting volume growth of around 20% by 2017. Additionally, Chevron possesses one of the healthiest balance sheets among its integrated peers, which include oil gaints like BP plc ( BP - Analyst Report ) , ExxonMobil Corporation ( XOM - Analyst Report ) and Royal Dutch Shell plc ( RDS.A - Analyst Report ) . The company’s balance sheet strength helps it to capitalize on investment opportunities with the option to make strategic acquisitions.

Management made significant progress in re-balancing Chevron’s asset portfolio by divesting non-core and high-cost assets. The company’s decision to sell its marketing businesses in Kenya, Nigeria, Uganda, Western Africa and Brazil is part of that strategy. In particular, Chevron plans to exit the low profit generating business and concentrate on the discovery of oil and gas worldwide.

However, Chevron’s production growth profile depends on the timely development of upstream projects, almost all of which have inherent risk factors. Time and cost overruns on these programs may lead to lower returns going forward.

Chevron currently carries a Zacks Rank #3 (Hold), implying that it is expected to perform in line with the broader U.S. equity market over the next one to three months.