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Dec. 10, 2019, 4:37 p.m. EST

Chevron taking a $10 billion charge after it sours on natural-gas bets

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By Claudia Assis

CVX

Chevron Corp. /zigman2/quotes/205871374/composite CVX +0.66% said late Tuesday it expects after-tax charges between $10 billion and $11 billion in its fourth-quarter results, more than half related to natural-gas bets in Appalachia. The company held its 2020 capital spending plan at $20 billion for the third year, highlighting its "world-class" oil holdings in West Texas's Permian Basin, deepwater Gulf of Mexico, and in Kazakhstan. The impairment charge is a result of the company's "disciplined approach to capital allocation" and a cut in its commodity prices outlook, Chevron said. As a result, the company will cut funding to several natural-gas projects, including those in Appalachia and international projects such as a liquified natural gas project in Canada. "We believe the best use of our capital is investing in our most advantaged assets," Chief Executive Michael Wirth said in a statement. "With capital discipline and a conservative outlook comes the responsibility to make the tough choices necessary to deliver higher cash returns to our shareholders over the long term." Chevron is evaluating "strategic alternatives" for the natural-gas assets, including selling them, it said. Shares of Chevron fell 0.5% in the extended session after ending the regular trading day up 0.5%. The oil and gas company is expected to post fourth-quarter results in late January.

/zigman2/quotes/205871374/composite
US : U.S.: NYSE
$ 80.92
+0.53 +0.66%
Volume: 16.38M
April 7, 2020 4:10p
P/E Ratio
54.39
Dividend Yield
6.38%
Market Cap
$141.16 billion
Rev. per Employee
$3.27M
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