Shares of Oil Giants Fall After Chevron's $10 Billion Charge
December 11 2019 - 1:33PM
Dow Jones News
By Gunjan Banerji
Shares of big oil and gas producers dropped Wednesday after
Chevron Corp. wrote down the value of its assets by more than $10
billion and lowered its forecast for commodity prices.
The oil giant's move marked a concession that some of its
holdings wouldn't be profitable anytime soon as it slashed the
value of properties like its U.S. shale holdings in Appalachia.
A global supply glut and mounting worries about demand for
fossil fuels have weighed on energy prices and shares of producers
recently. Natural-gas prices have sunk since Chevron bought acreage
in Appalachia. The price of natural gas is down roughly 49% over
the past year, according to Dow Jones Market Data.
Chevron stock slipped 0.8% to $116.99 in recent trading. Shares
of Chesapeake Energy Corp. lost 4.5%. Range Resources Corp. fell
about 1.2%.
Meanwhile, several stock analysts revised their price targets
for Chevron shares lower, FactSet data show.
The oil giant's shares have already lagged behind the S&P
500 this year, gaining 7.5% -- well behind the broader stock
index's 25% advance. Energy companies within the S&P 500 have
been the worst performers of the stock index's 11 groups.
Some remain pessimistic about the sector. Analysts have also
lowered their price forecasts on Antero Resources Corp., which
focuses on developing and buying natural gas in the Appalachian
Basin. They also dropped their targets for Cabot Oil & Gas
Corp., which fell about 0.6% in trading Wednesday.
Natural-gas prices have dwindled as supply has outpaced demand,
leading big oil and gas companies to dial back on drilling this
year. EQT Corp. said earlier this year that it would spend less on
drilling in 2019 than it did last year. Gulfport Energy Corp. said
in January that it would drill less and spend the money saved to
buy back its own shares instead.
--Ryan Dezember contributed to this article.
(END) Dow Jones Newswires
December 11, 2019 13:18 ET (18:18 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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