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Chevron (CVX) Mulls Sale of Permian Oil Assets Worth $1B

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Chevron Corporation (CVX - Free Report) is attempting to sell two groups of conventional oil and gas assets in the Permian Basin — the most prolific shale play in the United States — worth more than $1 billion, per Reuters' sources.

If the sources are to be believed, the business has hired an investment bank to sell $879 million in Permian oil and gas resources, and it has other assets worth more than $200 million for sale elsewhere in the basin. Chevron has been assessing additional properties in the Permian and elsewhere, and it may sell older assets later this year.

Chevron is the latest oil major to consider divesting holdings in the Permian Basin, the biggest oilfield in the United States. It is considering selling lower-value assets in order to focus on its highest-performing assets, while some other majors, such as Royal Dutch Shell plc , are considering abandoning the basin completely in order to invest in energy transition.     

Shell’s Permian sale could fetch it as high as $10 billion. Thus, the integrated energy firm is gradually shifting its focus from fossil fuels. The proceeds, if the deal is confirmed, will probably be utilized by the company for reducing debt loads and for investing in clean energy, per the same source.                       

As far as Chevron is concerned, the company’s CFO Pierre Breber recently stated at a Reuters conference that the firm has no intention to downsize its oil and gas operations in favor of wind and solar energy. Breber said in the press meet that the firm will spend $3 billion over the next seven years on technology to eliminate hazardous emissions from its activities instead of investing in renewable energy sources, such as wind or solar power.

Brief on the Company

Chevron is one of the largest publicly traded oil and gas companies in the world, with operations spread to almost every corner of the globe. A component of the Dow Jones Industrial Average, this energy player is fully integrated, participating in every energy-related process, ranging from oil production to refining and marketing.

Zacks Rank & Key Picks

Chevron currently has a Zacks Rank #3 (Hold). Some better-ranked players in the energy  space are Baker Hughes Company (BKR - Free Report) and Oasis Petroleum Inc. , each presently flaunting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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