Chevron CEO Says Marcellus Drilling Scaled Back Due to Low Price

When the annual analyst teleconference for a big oil company is forecast to go 2.5-3 hours long, you know the news will not be good. It doesn’t take that long unless you have explain and re-explain yourself multiple times. Although MDN did not participate in yesterday’s annual analyst call for Chevron, by all accounts, the news was negative and the company’s stock ticked down by the end of the day by $1.33 per share (1.1%).

Chevron is a huge company–the second largest oil company in the United States based on market capitalization. The only thing MDN was interested in, aside from any mentions about the recent well fire in Greene County, PA (no mentions of the well fire in the call that we could find), is, What is Chevron up to in the Marcellus? The answer we got from looking at the slides and reading media reports of yesterday’s call is: not much. Chevron Chairman and CEO John Watson said “some” of the drilling in the PA Marcellus has been curtailed because of the low commodity price of natural gas. MDN’s Marcellus and Utica Shale Databook show Chevron’s permitting activity picked up a bit toward the end of 2013. It seems from Watson’s comments that they will continue to actively drill in the Marcellus in 2014, but likely not at the same levels seen in 2012 and 2013…

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