Chevron To Boost Asset Sales As Sticks By Outlook Amid Cheap Oil
NEW YORK, March 10 (Reuters) - Chevron Corp boosted its asset sales plans by 50 percent to $15 billion by 2017 and trimmed spending to generate more cash as the second-largest U.S. oil company reaffirmed plans to raise production 20 percent despite a plunge in crude prices.
The company also stressed its dividend will continue to grow, executives said as part of a presentation on Tuesday designed to show Wall Street that Chevron can thrive despite a more-than 50 percent drop in oil prices since last June.
"We're quite sober about (oil) prices in 2015," Chief Executive John Watson said at the company's annual investor day in New York. "We know we have to manage costs both in the short-term and the long-term environments."
In a blunt message to oilfield service providers, Chevron's Jay Johnson, who is set to become the company's upstream portfolio chief upon Vice Chairman George Kirkland's retirement later this year, warned that unless costs come down, "we will re-bid contracts."
Despite cheap oil, the company's five main growth projects, including two major liquefied natural gas expansions in Australia, should lift daily output to 3.1 million barrels of oil equivalent by 2017, executives said, reaffirming an outlook set last year. For 2015, Chevron expects daily output of 2.57 million boepd.
Expansions in the company's Permian shale operations in Texas also should play a part, Watson said, along with growth in the U.S. Gulf of Mexico.
Executives said one of their highest priorities is growing the dividend, currently at $1.07, adding they hope the company will be cash flow positive by 2017, freeing it from a reliance on asset sales and debt to fund the quarterly payout.
Chevron plans to spend $35 billion this year, 13 percent less than in 2014. Spending should ramp down as expansion projects open toward the end of the decade. Watson stressed that would remain his core focus, not a large acquisition.
"That's not something we need to do right now and not my first priority," he said. Last year Watson told Reuters he wished Chevron had assets in the North Dakota Bakken shale formation, but considered valuations too high.
Watson said Chevron's focus for U.S. shale will remain the Marcellus in Pennsylvania and the Permian.
"I wouldn't want to signal that we're looking for an acquisition in any one play," he said.
Chevron's stock was down about 0.7 percent in Tuesday afternoon trading to $103.22.
(Reporting by Ernest Scheyder; Editing by Marguerita Choy)
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
- Weatherford CEO's Rebound Plan Relies On Getting Smaller
- Iran Says Oil Market Is Too Tight For US Zero Exports Target
- China's Squeezed 'Teapots' Eye Petchem Path To Riches
- Baker Hughes: US Drillers Add Oil Rigs For Second Week In Three
- Venezuela Hands China More Oil Presence, But No Mention Of New Funds