Chevron's Not Done Purchasing Domestic Assets


Chevron's recent purchase of 246,000 Permian Basin acres from Chesapeake Energy appears to be just the beginning of the company's oil and gas shopping spree. After the deal closes, Chevron will still have more than $18 billion in cash, more than double the cash held in 2009 and plenty more than needed in the current low-interest-rate environment. Looking over Chevron's portfolio, the company is heavily levered to international oil and gas prices, which today is extremely beneficial because of the higher international Brent crude price versus cheaper WTI, as well as the significant premium found overseas for natural gas. However, with domestic companies shedding assets in an attempt to shore up balance sheets, now could be the time for Chevron to increase its position in North America -- but only if it can find a suitable deal to spend its outsized cash reserves on. Check out the following video for some viable options Chevron may take advantage of.

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Austin Smith has no positions in the stocks mentioned above. Joel South has no positions in the stocks mentioned above. The Motley Fool has options on Chesapeake Energy. Motley Fool newsletter services recommend Chevron and Range Resources. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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