It's Getting Very, Very Interesting For Energy Investors -- July 11, 2021

I can't recall if I previously posted this. If I did not post it, how in the world did I miss this story?

It's being reported that Chevron may be in the process of exiting the Permian. Link here.

Chevron Corporation CVX 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 RDS.A, 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.

With regard to the Permian and Chevron: the next question. Who is big enough to be able to afford Chevron's assets in the Permian. If not, sold in pieces. PXD, anyone? 

For the archives, RDS-B:

• trading at $39.70; up 1.4% at the end of the week;
• 52-week range: $21.79 - $42.29;
• P/E: n/a
• market cap: $156 billion
• dividend: $1.39; 3.5%
• one-year target: $57.67

For the archives, CVX:

• trading at $104; up 1.4% at the end of the week;
• 52-week range: $102.36 - $104.23;
• P/E: n/a
• market cap: $201 billion
• dividend: $5.36; 5.05%
• one-year target: $122.78