Chevron takes $10B charge
In one of the largest ever write-downs in the energy sector, Chevron said Tuesday it was slashing the value of several holdings, including its ownership of U.S. shale in Appalachia by $10 billion.
The surprising news comes in a year where Chevron has thrived -- up more than 7 percent -- while other big energy rivals have dragged. Barron's wrote on Monday that Chevron has "a reputation on Wall Street for solid management and results."
CHEVRON CEO: INDEPENDENCE OR NOT, WE'RE STICKING WITH SCOTLAND
In an interview with Dow Jones, Chevron Chief Executive Mike Wirth agreed the company has performed well but said the move was made with an eye toward the future. "We have to make the tough choices to high-grade our portfolio and invest in the highest-return projects in the world we see ahead of us, and that's a different world than the one that lies behind us," Wirth said.
CLICK HERE TO GET THE FOX BUSINESS APP
Dow Jones also reported that industry executives and analysts anticipate more oil-and-gas companies will follow Chevron's lead to comply with accounting standards because low commodity prices have undermined the economics of many projects. One analyst, Citi’s Alastair Syme, wrote in a note Monday, "the problem is that Chevron used to look to be on a different trajectory. We think that this is a fragile period for equity investors in energy; better alignment with investors will come by corporates taking tougher action.”
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| CVX | CHEVRON CORP. | 162.36 | +0.75 | +0.46% |
Chevron's shares closed up less than a percentage point at $117.90 prior to the announcement Tuesday.