Chevron (CVX) is selling some pipeline assets that could earn more than $2 billion for the U.S. oil major.
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According to media reports, investment bankers at Bank of America (BAC) have been working to gauge potential interest in the sale of pipeline products, which are located in the Denver-Julesburg shale basin of northeastern Colorado.
The pipeline assets were acquired along with Chevron’s purchase of Noble Energy in 2020 and the subsequent takeover of Noble’s midstream business in 2021. The pipeline assets generate approximately $200 million in annual earnings. Based on comparable asset sales, Chevron is expected to receive $2 billion from the transaction.
Refinery Fire
News of the pipeline sale comes on the same day that a major fire has broken out at a Chevron oil refinery in California. No injuries were reported from the incident at the El Segundo plant, said Chevron, whose emergency crews were responding to the fire at the refinery.
No evacuation orders for area residents have been issued by California emergency response agencies that say the fire is largely contained. The El Segundo oil refinery is capable of refining 290,000 barrels of crude oil per day, according to Chevron. The main products from the plant are gasoline and jet fuel for aircraft.
Is CVX Stock a Buy?
The stock of Chevron has a consensus Moderate Buy rating among 16 Wall Street analysts. That rating is based on 11 Buy and five Hold recommendations issued in the last three months. The average CVX price target of $171.33 implies 11.28% upside from current levels.
