Chevron 2019 shale plans includes $3.5B to Permian

By Luke Geiver | December 10, 2018

Chevron has earmarked $3.5 billion for the Permian in 2019. The oil major released a basic spending for 2019 that will equal $20 billion for both upstream and downstream across it’s U.S. and international operations.

“Our investments are anchored in high-return short-cycle projects, with more than two-thirds of spend projected to realize cash flow within two years,” said Michael Wirth, chairman and CEO.

Next year Chevron believes it will continue to grow production. The additional production will help it maintain plans to issue strong dividends or continue with a share repurchase program.

In the Permian, Chevron owns roughly 2.2 million acres, making it one of the largest net acreage holders in the play. Chevron produces just under 120,000 barrels of oil equivalent per day.

In 2018, Chevron generated $14 billion in cash.

Since 2015, Chevron has reduced its operating expenses in the Permian by 40 percent. Since 2016, the company has increased its average lateral length per well by 35 percent.

Through 2019, Chevron has transport capacity of 100 percent for its crude production. And, starting next year, Chevron will have a docking contract in the Houston Ship Channel to export shale oil produced from the Permian.