Focus will be on free cash flow to pay dividends by reducing capital, selling assets, loans, layoffs and mergers.

The depth and duration of these low prices will dictate the pain severity Chevron will go through. Asset sales to pay dividends will be more difficult this time given we already sold most of our non-core assets. Capital reduction can be done quickly in the Permian and MCP deep water projects delayed. Layoffs may be deeper then originally expected.

One lever not used for decades are mergers of equals. This would focus on efficiencies and overlapping organizations for deeper opex and employee cuts and capital optimization. Non oil companies now have market caps in or approaching a trillion dollars so mega mergers would likely be allowed. How does ChevExx or ChevCop or some other consolidation of Permian companies and Chevron sound? It may sound good to Wall Street. First merger will kick off others.

Comment! It's anonymous!

15 replies (most recent on top)

Focus will be on free cash flow? What free cash? Like the story of the little Dutch boy who stuck his fingers in the leaking dike, any more depth or longevity to this downturn will test Chevron’s cash position.

Maintaining the dividend is critical for maintaining the company’s investor confidence and market capitalization.

CVX is not like OXY.

At some point someone is going to have to grow some nads and say “F the dividend.”
It’s not going to be a pleasant action, but this dividend aristocrat status is not worth holding on to at the expense of the company’s overall health.

Chevron debt ratio is very good which will help it survive

I can’t think of a company better prepared for low prices than Chevron. We will emerge stronger and bigger than ever. Ignore the Troll.

Only favorites will survive EOI. Not good for Chevron's long term goal.

Chevron's future is not bright. Undeserving people are promoted to key positions. The OC is going down every day. The transformation and upstream evolution takes one year to formulate. The whole organization is in wait and see mode. Nobody knows timeline for the EOI. Town halls are at the lowest level.

‘sustainable’ means able to be sustained, surprisingly - no need to say able to be able to be sustained. Get an education and try English grammar.

I like ChevExxCop (CEC). Market Cap $400-$500 million (a midsize company). With 1 shared ETC and 1 Shared PRC org. with 1 Sr Exec Org based in Houston. Strengthened Permian position, 1 consolidated North America and Deepwater org., 1 consolidated Int. Org, new major Latin America offshore proj coming online. Able to be sustainable in low price environment and competitive with large NOC’s including Saudi’s new IPO oil company. Then can absorb other Permian smaller independents.

If Chevron buybacks over the years were put into a cash stash we could be acquiring some nice companies right now that would benefit Chevron better for the long term.

Thankfully Chevron did not buy Anadarko!

Chevron may not survive this episode in its current integrated business model.

This will kick off a new wave of layoffs for sure

Will this effect our bonus? I am really counting on that bonus. And what about promotions? With all of the old dinosaur geezers getting the axe, then there should be lots of opportunities for younger people like me.

Won't happen. Way too much debt held by everyone. During the last oil bust, 2015-2016, Chevron borrowed money to pay the dividend. It was all about keeping the dividend aristocrat status.

Thread regarding Chevron Corp. layoffs

Focus will be on free cash flow to pay dividends by reducing capital, selling assets, loans, layoffs and mergers.

15 replies (most recent on top)

Post a reply