Chevron plans to raise its capital spending by 20% in 2007 - from $16 billion in 2006 to nearly $20 billion in 2007 while ConocoPhillips plans to lower its own spending from $15.5 billion to $13.5 billion. Said Oppenheimer & Co. analyst Fadel Gheit, "Chevron and ConocoPhillips are completely different animals," with completely different needs. Chevron has had many exploration successes of late and is ready to increase spending to begin to turn its big oil finds into big oil profits. ConocoPhillips, on the other hand, has completed some large acquisitions, including a $35 billion purchase of Burlington Resources in March, forcing it to cut back on spending somewhat. Chevron also announced its board has approved a plan to buy back up to $5 billion in common stock over a period of up to three years. Shares of Chevron fell slightly yesterday, down a third of a percent, while Conoco shares were up nicely, by $1.16.
• Sources: Chevron Press Release, ConocoPhillips Press Release, WSJ, Bloomberg, Reuters. Conference call transcripts: Chevron Q3 2006
• Related commentary: 3 Reasons Why I Bought ConocoPhillips, Fuel For Thought: Which Integrated Oil Company Should You Own?, Cramer's Take on CVX, Cramer's Take on COP
• Potentially impacted stocks and ETFs: Chevron (CVX), ConocoPhilips (COP). Competitors: Exxon Mobil (XOM), Royal Dutch Shell (RDS.A), BP (BP), Sunoco (SUN). ETFs: Vanguard Energy (VDE), Energy Select Sector SPDR (XLE), iShares Dow Jones US Energy Sector
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