Chevron Makes Australian Gas Find - Analyst Blog

Chevron Corp. (CVX) – the second-biggest U.S. oil company – announced the discovery of a new offshore natural gas site (Clio-3) in Western Australia’s Carnarvon Basin. The discovery builds on the integrated energy giant’s leading position in this hydrocarbon-rich area and follows the Yellowglen-1 find in January this year.

Drilled to a total depth of 14,137 feet (4,309 meters), the Clio-3 well encountered 260 feet (79 meters) of net gas pay. The find is situated in the WA-205-P permit area, approximately 90 miles (150 kilometers) off the coast of northwest Australia. Chevron Australia has a 67% operated interest in the prospect, with the other partner being Royal Dutch Shell PLC (RDS.A).

We believe that the latest exploration success will boost Chevron’s growth prospects in Australia by adding to its already significant gas interests in the country (through majority holdings in the Gorgon and Wheatstone natural gas developments).

San Ramon, California-based Chevron is one of the largest publicly traded oil and gas firm in the world, based on proved reserves. It is engaged in oil and gas exploration and production, refining and marketing of petroleum products, manufacturing of chemicals and other energy-related businesses.

Chevron is currently rated as Zacks #3 Rank (Hold), implying that the stock is expected to perform in line with the broader U.S. equity market over the next one to three months. This is supported by our long-term ‘Neutral’ recommendation (6+ months time period).