Shares of Oil Giants Fall After Chevron's $10 Billion Charge

By Gunjan Banerji 

Shares of big oil and gas producers dropped Wednesday after Chevron Corp. wrote down the value of its assets by more than $10 billion and lowered its forecast for commodity prices.

The oil giant's move marked a concession that some of its holdings wouldn't be profitable anytime soon as it slashed the value of properties like its U.S. shale holdings in Appalachia.

A global supply glut and mounting worries about demand for fossil fuels have weighed on energy prices and shares of producers recently. Natural-gas prices have sunk since Chevron bought acreage in Appalachia. The price of natural gas is down roughly 49% over the past year, according to Dow Jones Market Data.

Chevron stock slipped 0.8% to $116.99 in recent trading. Shares of Chesapeake Energy Corp. lost 4.5%. Range Resources Corp. fell about 1.2%.

Meanwhile, several stock analysts revised their price targets for Chevron shares lower, FactSet data show.

The oil giant's shares have already lagged behind the S&P 500 this year, gaining 7.5% -- well behind the broader stock index's 25% advance. Energy companies within the S&P 500 have been the worst performers of the stock index's 11 groups.

Some remain pessimistic about the sector. Analysts have also lowered their price forecasts on Antero Resources Corp., which focuses on developing and buying natural gas in the Appalachian Basin. They also dropped their targets for Cabot Oil & Gas Corp., which fell about 0.6% in trading Wednesday.

Natural-gas prices have dwindled as supply has outpaced demand, leading big oil and gas companies to dial back on drilling this year. EQT Corp. said earlier this year that it would spend less on drilling in 2019 than it did last year. Gulfport Energy Corp. said in January that it would drill less and spend the money saved to buy back its own shares instead.

--Ryan Dezember contributed to this article.

(END) Dow Jones Newswires

December 11, 2019 13:18 ET (18:18 GMT)

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