Chevron Stock Slides in Wake of Oncoming Hurricanes Halts Operations in 2 Offshore Facilities

Chevron Stock

Chevron stock was trading at $141.32 as of 03:57 PM EDT on Monday.

As a precaution, Chevron (NYSE:CVX) announced on Monday that it is evacuating employees and temporarily halting production at two oil production platforms in the Gulf of Mexico due to Hurricane Ian, which is expected to make landfall in northwest Florida.

A minor percentage of the 1.8 million barrels per day of crude oil produced offshore comes from the Petronius and Blind Faith platforms’ combined output of about 120K bbl/day. Production has been stopped, and staff is being evacuated from BP’s (BP) Na Kika platform in the Gulf as well as its Thunder Horse platform.

Chevron Shatters Quarterly Earnings Records

According to the U.S. Energy Information Administration, the entire offshore oil output from the Gulf of Mexico makes up around 16% of all U.S. production, while offshore gas production makes up 5% of all U.S. production.

Report on Chevron stock

Over the past year, Chevron shares have done better than the Zacks Oil and Gas – Integrated – International industry (+40.6% vs. +25.6%). According to the Zacks analyst, the company is among the worldwide integrated oil firms best positioned to accomplish a sustained production ramp-up. Due to its prominent location in the profitable Permian Basin, America’s No. 2 energy business has one of the best existing project pipelines in the industry.

However, Chevron was not exempt from the collapse in commodity prices in 2020, which forced them to drastically reduce spending. A worry is also the company’s extreme susceptibility to oil prices. Additionally, the supermajor’s 10-year reserve replacement ratio of 100% shows that it is unable to replace the oil and gas production to the same level.

In Monday’s trading, Chevron (CVX) shares fell 1.7%, along with practically all other energy firms on the S&P 500, as the price of crude oil dropped significantly.

Featured Image – Megapixl ©  Andreistanescu

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