Oil Giant Chevron's Golden State Setback: To Incur Up To $4B Charge in Q4 Over California Challenges
Portfolio Pulse from Shivani Kumaresan
Chevron Corporation (NYSE:CVX) will incur a non-cash, after-tax charge of $3.5 to $4.0 billion in Q4 FY23 due to regulatory challenges in California affecting its upstream assets and obligations from previously sold assets in the Gulf of Mexico. The company plans to continue operating the California assets and expects to manage decommissioning activities in the Gulf over the next decade. Chevron announced a $16 billion capex budget for 2024, with $14 billion for upstream spending, two-thirds of which is for the U.S. CVX shares rose 0.76% in premarket trading.
January 02, 2024 | 2:06 pm
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NEGATIVE IMPACT
Chevron to face a $3.5-4B charge in Q4 FY23 from California regulatory challenges and Gulf of Mexico asset decommissioning, but continues operations and has a significant capex planned for 2024.
The significant non-cash charge due to regulatory challenges and decommissioning obligations is likely to be viewed negatively by investors in the short term, potentially impacting the stock price negatively. However, the company's commitment to continue operations and the announcement of a substantial capex for 2024 may mitigate some concerns. The premarket share price increase suggests a mixed investor reaction.
CONFIDENCE 85
IMPORTANCE 90
RELEVANCE 100