Chevron Morocco Exploration Ltd. - a subsidiary of U.S. energy
) - signed an agreement with local company Office National Des
Hydrocarbures Et Des Mines for exploring three offshore sites.
Per the deal, Chevron got 75% working interest in those areas
covering roughly 11,300 square miles of area with water depth
ranging from 330 feet to 14,700 feet. The remaining 25% interest
remains with Morocco's Office National Des Hydrocarbures Et Des
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The agreement calls for Chevron to procure seismic data and
conduct studies in all those three offshore sites - Cap Cantin
Deep, Cap Rhir Deep and Cap Walidia Deep - located within 60 to
120 miles off the Moroccan coast.
Management believes that this development will help the company
to upgrade its knowledge about promising geology in those
emerging areas apart from enhancing Chevron's growth strategy.
San Ramon, California-based Chevron displays a strong portfolio
of global projects, targeting volume growth of around 20% by
2017. Additionally, Chevron possesses one of the healthiest
balance sheets among its integrated peers, which include oil
Royal Dutch Shell plc
). The company's balance sheet strength helps it to capitalize on
investment opportunities with the option to make strategic
Management made significant progress in re-balancing Chevron's
asset portfolio by divesting non-core and high-cost assets. The
company's decision to sell its marketing businesses in Kenya,
Nigeria, Uganda, Western Africa and Brazil is part of that
strategy. In particular, Chevron plans to exit the low profit
generating business and concentrate on the discovery of oil and
However, Chevron's production growth profile depends on the
timely development of upstream projects, almost all of which have
inherent risk factors. Time and cost overruns on these programs
may lead to lower returns going forward.
Chevron currently carries a Zacks Rank #3 (Hold), implying that
it is expected to perform in line with the broader U.S. equity
market over the next one to three months.