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10-K: Chevron's cost to pump oil skied 56% over the past three years

  • Chevron's (CVX) 1.6% drubbing today exceeded price losses in other big oil stocks, and perhaps this realization was the reason: Its average cost to pump a barrel of oil soared 56% during the past three years, according to its latest 10-K filing.
  • CVX booked a massive $21.4B profit in 2013, but the company’s earnings have fallen for two straight years as these costs have started to bite.
  • CVX is spending huge sums on projects that take years to build and have yet to bring in any cash; it spent $42B in 2013 and plans to shell out another $40B this year.
Comments (8)
  • Peakoil inc
    21 Feb, 06:05 PM Reply Like
  • Isn't this precisely what the peakoil proponents have said would happen as humanity bumps along the peak oil production plateau and begins to slip slide down the net energy slope?
    21 Feb, 06:30 PM Reply Like
  • Folks, this is called the oil business. It's up to CVX management to spend if they see the projects that clear their hurdle rate for ROCE. If oil runs to $150/bbl, they'll be geniuses...and I think it will.

     

    If management cannot see those types of returns, there are other uses for their cash instead of capex. Either you trust CVX management's judgment and buy their stock, or you don't and you don't. Simple.
    21 Feb, 07:32 PM Reply Like
  • Gorgon on line next year will help considerably.

     

    Imo, CVX management is one of the Best and I certainly trust them for a very profitable future.

     

    Also 3.5% div is not too shabby to get paid to wait and reinvest to accumulate more shares at lower prices.

     

    Long CVX
    21 Feb, 08:37 PM Reply Like
  • Title was a little confusing. You ski downhill, not up (unless you're doing the crazy half pipe stuff.

     

    Long CVX and not worrying. World will need oil for the rest of my lifetime.
    21 Feb, 11:27 PM Reply Like
  • perhaps they meant the past tense of sky. still confusing no doubt and no worries for me on CVX
    23 Feb, 09:33 AM Reply Like
  • Kind of a useless headline without comps from other producers to compare costs of production. When these large capex projects begin to produce, the equation changes considerably. Staying long.
    22 Feb, 04:29 PM Reply Like
  • CHk tried this strategy in the early phase of shale fracking for natural gas when it was selling for $13-15.00. "Don't worry about the production costs, demand will cover all expenses eventually".....
    these stories usually have a sad ending for investors.
    24 Feb, 09:44 AM Reply Like
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