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  • Is Exxon Mobil A Better Investment Than Chevron? [View article]
    Chevron simply carries a higher risk. Anything goes awry in Nigeria, Angola, Kazakhstan, and CVX is vulnerable to earnings diruptions. Capital Stewardship is also a big concern given their recent track record in managing the huge LNG projects. They do have the upside from their ability to deal with the Argentinians, Kazakhs and don't forget they are sole remaining US multi-national in Venezuela.......... The CVX Upstream management team is quite entrepreneurial!
    May 30, 2014. 02:31 AM | 1 Like Like |Link to Comment
  • Is Exxon Mobil A Better Investment Than Chevron? [View article]
    Few people understand just how phenomenally well-run Exxon is. Their operating efficiency is second to none, their safety and environmental records are excellent, they have great capital stewardship and they are very well diversified, with operations through out the world! They will perform steadily and give you decent returns, even in a down market.

    Chevron is also well run but it is not quite the 'Machine' that Exxon has become. Chevron is also a bit exposed with over-sized investments in places like Kazakhstan, Nigeria, Angola, Argentina and Venezuela. Exxon has judicially avoided some of these places. Chevron has struggled a bit with capital stewardship, with the Angola & Australian LNG projects running over on time & money. But by being a bit less conservative and less centrally controlled, Chevron has a more entrepreneurial culture and consequently has greater upside potential. However, it is a more risky investment. Chevron has delivered over the past 10 years and their significant increase in capital spending should yield significant new growth. Previously, Chevron's Capital & Exploratory budget was 50% of Exxon's. They are now almost equal. Time will tell whether Chevron is capable of managing that level of investment efficiently.

    Keep an eye out for the Russians & Japan! The latest agreement between Russia & China on Natural Gas introduces an unwelcome wrinkle to the fragile Asian LNG market. Japan has also decided to re-fire their nuclear power plants rather than switching to LNG. The last think CVX & XOM need is a price war on natural gas! Their huge investments in LNG projects require long-term price stability.

    I vote for XOM for good long-term return, I like CVX's upside potential but it brings a bit more risk......
    May 29, 2014. 03:05 PM | 3 Likes Like |Link to Comment
  • Chevron's Long-Term Growth Prospects Are Alive [View article]
    I am very intrigued by Chevron's recent increase in CAPEX, On the one hand it is indicative of great opportunities coming to fruition. It is interesting though that Exxon is announcing a reduction in CAPEX. Have to wonder if they are using different oil pricing models or if CVX truly has better opportunities.

    I love CVX's LNG position and no other oil company is better positioned to capitalize on heavy oil opportunities in Venezuela. Both heavy oil and LNG are extremely capital intensive endeavors.

    The biggest factor in determining Chevron's success in the coming years will be their ability to manage these massive development projects. The technologies involved are complicated and they require great project management skills.

    I for one am betting Chevron will be successful but managing this level of capital investment is no without risk.
    Mar 6, 2014. 02:32 PM | Likes Like |Link to Comment
  • Is Chevron And Liquefied Natural Gas A Promising Prospect? [View article]
    While the author raises some interesting points given how unpredictable LNG markets have been over the last 20 years, I am struggling trying to agree with how much negative pressure there is on LNG markets.

    With Germany, Japan and others trying to exit nuclear, the extraordinarily high cost of solar and the continued economic growth in Asia I don't see demand easing.

    In addition, I don't understand the suggestion that the US will account for 40% of world LNG supplies. Unless I am mistaken, current US LNG exports are ZERO. While there may be plans to build export capacity, the capital costs are astronomical, the lead time for a new plant can easily be a decade and the cost is billions. EXXON is certainly not going to build new plants to compete in a highly competitive and uncertain market. Thus, I just don't see the US ever becoming a big player (not at 40% of world demand).

    Now, if the author had mentioned the risk of technological breakthroughs I might be swayed. Wind is more efficient than solar and growing very quickly, Argentina has massive shale gas reserves (I suspect both China and Russia do as well), and who knows how long it will take us to begin exploiting ocean tides ( can't even begin to imagine the energy stored there). Venezuela's heavy oil would be competing directly with LNG today were it not for the political uncertainties involved in doing business there. Just like shale gas & fracking changed the market for gas in the US, I think the biggest unknown affecting the LNG markets will be technology... I just don't see 40% of LNG supplies coming from the US, but I do see new technologies changing the landscape for oil and gas.....

    One thing I can agree on is that trying to predict gas markets is one tricky business! But I for one am long on CVX and I believe they are well placed for the next 10 years and these LNG plants will simply be money machines for the next few years....... Beyond 10 years??? Who knows!!
    Jan 23, 2014. 08:46 PM | 2 Likes Like |Link to Comment
  • Short Chevron: Profit From The Market's Oversight [View article]
    I wish I knew what the 'perfect stock' might be... Personally, I am striving for a couple of things from the stocks I pick;

    > First and foremost I want companies that are extremely well run. I think CVX probably falls into that category and I suspect GE does as well. In my everyday activities I look for companies that deliver. Costco for example, they give shoppers great value and services. So, I own Costco. As far as oil companies go, XOM is a beast! Read their annual report and you will see what a well run company looks like. They are one incredibly well disciplined company, a master at 'capital stewardship.'

    > The other thing that I look for is the 'Perfect Match' to everything else in my portfolio. I want stocks that compliment one another whose prices don't correlate too closely. I want to be diversified so that my risk at the next market crash (yes there will be another one) isn't too great. So yes, having both GE and CVX is probably a good idea!
    Jul 30, 2013. 12:25 PM | Likes Like |Link to Comment
  • Short Chevron: Profit From The Market's Oversight [View article]
    Spot on! Cashflow & ROI in coming years should look spectacular.
    Jul 23, 2013. 01:01 PM | Likes Like |Link to Comment
  • Short Chevron: Profit From The Market's Oversight [View article]
    I understand that Venezuela might be counter intuitive, especially if you are familiar with XOM & COP's experience.

    CVX has quietly picked up the pieces while the other US majors exited Venezuela. While it has been frustrating at times, Venezuela has proven to be a profitable venture. PdVSA recognizes CVX contribution and ability to improve production efficiency so they are letting CVX manage investment of US$1 Billion in existing fields.

    I hear they have also agreed to work with Argentina on potential LNG project in Venezuela.

    What impresses me is that CVX has managed to continue its entrepreneurial ways despite its size.

    Hard to leave Venezuela, they have the 2nd largest petroleum reserves in the world. Political chaos has cost them dearly. Hopefully new regime will manage the economy a bit more effectively than Chavez did...
    Jul 9, 2013. 03:26 PM | 2 Likes Like |Link to Comment
  • Short Chevron: Profit From The Market's Oversight [View article]
    This is a fine example of a financial analyst writing about a company in an industry in which the author is ignorant. One needs to be very careful of falling victim to blindly following the traditional financial metrics.

    It so happens that CVX is fantastically situated to benefit from several huge LNG projects. Gorgon, Northwest Shelf, Wheatstone & Angola have consumed enormous amounts of capital expenditures and have produced very little in the timeframes the author has focused on.

    These projects will come on stream in the next few years but today represent billions of dollars of non-productive assets. LNG projects involved the investment of Billions of dollars up front to create projects that will become cash cows for 20-30 years into the future.

    CVX's strategy of producing LNG into India, China & Japan while the area is growing and Japan eschews nuclear energy should prove to be brilliant. Low risk cash flow for many years will be a great offset to its risky, but highly profitable positions in ANGOLA, Nigeria, Indonesia and Kazakhstan. I think that is a portfolio that I want a piece of.

    The author is ignorant of the long-lead times required to bring these enormously capital intensive projects online. The smaller of these projects requires the investment of at least US$25 Billion while a project loke Gorgon will end up at US$50 Billion. Its no wonder CVX's return on capital has suffered while all of these projects matures at the same time. These projects will provide the cash flow to fuel incredible growth in the future while others have to dig into the ever increasingly expensive capital markets CVX should be well positioned to fund future developments and dividend growth.

    Did any one catch the brilliant move to provide capital to Venezuela? The heavy oil projects also consume massive capital investment but they too provide steady production and cash flow for 20-30 years....

    I'm going long on this one! CVX has lowered its country risk profile (growing in Australia???) and will be printing dollars for years to come..... Suggest that this financial analyst learn something about the oil business....

    Jul 9, 2013. 03:29 AM | 5 Likes Like |Link to Comment
  • Why Chevron Is Undervalued Right Now [View article]
    I happen to agree that CVS is a good long-term hold investment but I think that the analysts that focus only on financial results are likely to do poorly over the long haul. This article makes ZERO mention of Organizational Capability, which in capital intensive businesses will yield outstanding long-term results.

    When analyzing investment opportunities one needs to evaluate the quality of the asset under consideration. A potential investor needs to consider whether the asset has hidden underlying value, whether the asset is a particularly well run company that has competitive advantage over its peers and of course financial performance is an important consideration.

    The things that stand out with CVX are its operational excellence, its capital stewardship, exploration results and its strategic planning. Its position in LNG is outstanding, its ability to manage 20-50 BILLION dollar projects, its environmental record, portfolio diversity (substantial producing assets in over a dozen countries throughout the world), its financial management is very steady & sound.

    EXXON is perhaps the best run company in the entire world. Its vertical integration, capital stewardship and operational prowess make it a very reliable performer. Exxon is certainly a less risky investment due to its portfolio diversity & vertical integration but it just doesn't have the upside that you get with CVX, but less downside as well.

    Particularly with the petroleum companies don't get too enamored with short term financial performance (ie BP), operational excellence will be what supports your long term investment!
    Jul 3, 2013. 01:15 PM | Likes Like |Link to Comment
  • Richmond, CA plans litigation against Chevron (CVX) over last year's refinery fire and is reportedly aiming to hire Cotchett, Pitre & McCarthy - the same firm which represented San Bruno against PG&E over its gas-line explosion in 2010. No stranger to Chevron, Cotchett Pitre recently filed a class-action suit against the company for defrauding royalty owners. [View news story]
    Terribly sad that Richmond would be so adversarial with its largest tax payer & employer. CVX offered them millions to help expedite recent refinery upgrade but the mayor had led the attack in obstructing the US$ Billion capital expenditure project.
    May 10, 2013. 07:19 PM | Likes Like |Link to Comment
  • Why Chevron Has Been Outperforming Exxon [View article]
    CVX has a history of being very ethical and politically sensitive. Petro-Ecuador pushed Texaco out and then proceeded to trash its rain forest. Then the government tried to renege on its agreement with Texaco on its responsibility for cleaning up the pre-Petro-Ecuador environmental damage.

    CVX has no choice but to hope that Ecuador will respect its own laws and its contractual obligations. CVX would probably have settled the dispute but it must fight for the "RULE OF LAW" otherwise oil companies will be faced with huge exposures in other locations.

    CVX's environmental and safety record is outstanding (so is XOM's). Despite the fanfare, the incidents in Richmond & Brazil were relatively minor. None the less, it is a very dangerous and risky business!
    Mar 25, 2013. 06:46 PM | Likes Like |Link to Comment
  • Why Chevron Has Been Outperforming Exxon [View article]
    Young investor? Go read "The Intelligent Investor" by Benjamin Graham. Take a long-term focus and look for companies that are extraordinarily well run. AND don't forget top diversify....

    Both CVX and XOM fit the bill of well run companies with strong financial performance.
    Mar 25, 2013. 06:11 PM | Likes Like |Link to Comment
  • Why Chevron Has Been Outperforming Exxon [View article]
    One just needs to read the XOM annual report to see that it is an extraordinarily well run company. It is the single international oil company that truly capitalizes on vertical integration. It refines and markets much of what it produces and therefore can stay on the fringes of the risky crude trading market. Efficiency and safety are also enhanced by XOM's highly centralized command structure. All decisions emanate from Houston and policies and procedures are similar throughout the world.

    CVX's strength comes from its focus on highly profitable & large upstream assets. CVX's LNG position is extraordinary. Once up and going LNG operations are money machines spewing profits for the life of the facilities. CVX made two great acquisitions with Unocal and Gulf, while Texaco did little to enhance the Upstream portfolio, CVX has finally disposed of most of Texaco's god awful downstream assets. What's left of CALTEX may yet contribute if the Asian economies continue to grow.

    Bottom line CVX is an Upstream Company with great assets. Their risk exposure comes from their high concentration of assets in volatile parts of the World. So far, CVX has proven adept at navigating the tough politics in places such as Indonesia, Angola, Kazakhstan and Nigeria. Also despite a couple of high profile incidents this past year their safety & environmental performance is outstanding.

    I'd consider CVX a bit riskier investment with more upside potential... I own both stock for different reasons....
    Mar 25, 2013. 06:05 PM | 1 Like Like |Link to Comment
  • Chevron: The Best Integrated Oil Company In The World [View article]
    The article was very interesting in portraying two very different but successful companies. One just has to read Exxon's annual report to realize that it is a highly organized and integrated company. Chevron on the other hand has focused on a few large and highly profitable upstream operations to drive their business. They haven't been successful in leveraging their vertical integration but they compensate with effective oil trading group and they are a valued partner because of their commitment to ethics. Governments and other oil companies like partnering with Chevron because they know CVX will be ethical and take the high road in resolving the inevitable disputes.

    The oil industry is a high stakes game and no other industry requires the astronomical levels of capital expenditures. The cost of failures can be very high. By avoiding conflict and being ethical tends to waste little money and effort on costly legal battles. Ecuador is the anomaly but that is because Chevron simply cannot accept the precedent of a country not living up to its contractual agreements and rule of law.
    Feb 19, 2013. 12:07 PM | Likes Like |Link to Comment
  • Chevron: The Best Integrated Oil Company In The World [View article]
    Actually, Chevron's safety and oil spill record in 2012 was their best in history. While the Richmond incident was truly unfortunate and avoidable, I can say that the commitment to safety at Chevron is truly impressive. Any employee is empowered to stop work due to a concern about safety and every single meeting starts with an introduction devoted to some aspect of safety.

    I was part of Chevron's emergency response team in Angola and I was impressed with the organization and the constant push to improve our responsiveness to the inevitable safety and spill issues. It is a dangerous business but I can't think of a company I would trust more than CVX, even now that I am an outsider looking in.
    Feb 19, 2013. 12:07 PM | 1 Like Like |Link to Comment