- Chevron (NYSE:CVX) is kidding itself if it thinks it can get to cash flow neutral by 2017 with Brent crude at $70/bbl, Oppenheimer's Fadel Gheit believes.
- The analyst expects CVX to generate operating cash flow of $25.4B in 2015 and $30B in 2016, based on the respective current 2015 and 2016 benchmark strip prices of $62.85/bbl and $69.66/bbl for Brent and $2.94/mcf and $3.23/mcf for Henry Hub, which will be used to fund capex of $31B and dividends of ~$8B in each year.
- Gheit says CVX thus could face a free cash flow deficit of $13.6B this year and $8.9B next year, before asset sales, which could be funded with additional debt.