| | | Chevron to take $10B-plus asset writedown
Dec. 10, 2019 4:57 PM ET|About: Chevron Corporation (CVX)|By: Carl Surran, SA News Editor
In the biggest energy company impairment charge in years, Chevron (NYSE: CVX) says it will write down the value of its assets by $10B-$11B in its Q4 results, more than half in its U.S. shale holdings in Appalachia.
For the third straight year, CVX says it plans to hold organic capital spending flat at $20B, continuing its emphasis on short cycle investments which it expects will deliver improved returns on capital and stronger free cash flow over the long-term.
CVX says it will cut funding to various gas-related opportunities including Appalachia shale, Kitimat LNG in Canada and other international projects, and will evaluate its strategic alternatives for these assets, including divestment.
As part of its forecast for lower commodity prices, the company also is reducing the value of production from its Big Foot offshore oil project in the Gulf of Mexico.
CVX's sobering reappraisal likely will ripple through the oil and gas industry, forcing others to publicly reassess the value of their holdings in the face of a global supply glut and growing investor concerns about the long-term future of fossil fuels, WSJ reports. |
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