Well, folks it looks like Chevron is making as much waves in the headlines as it’s making in the Gulf of Mexico. Why? Well because they’ve just unleashed a new deepwater breakthrough that pretty much gives them the iPhone level edge over its Android style competitors. (Apologies to my android peeps here). 

(Source: Benzinga) 

According to reports, Chevron has officially started pumping oil and gas from 34,000 feet below sea level with the help of its groundbreaking High-Pressure Anchor project. What’s even more impressive, is that while that’s about as deep as my existential dread for Monday friggin mornings, this anchor has the ability to handle up to 20,000 psi, which is like 5x more than regular oil wells that operate between 1,200-1,600 psi. 

(Source: Giphy) 

So obviously, this is a massive breakthrough when it comes to extracting the black gold our industrial world needs for survival. Which is why Nigel Hearne, Chevron’s EVP, wasted no time to boast this new accomplishment as a  "breakthrough for the energy industry." 

Now of course, while every executive says this about literally every major announcement their company releases, Hearne is definitely not blowing hot air with this one. In short, Chevron’s project unlocks oil reserves that were previously about as hard to reach as me connecting to a WeWork’s wifi. (Dang near impossible I tell ya). 

(Source: Giphy) 

But now, with a 20,000 psi gauge, and the capacity to accumulate 75,000 barrels a day, this anchor project, that lies about 140 miles from the coast of Louisiana, is about to supercharge Chevron’s Gulf output significantly - especially considering this area is expected to hold an apple bottom jeans amount of 440 million barrels of oil. Which is no doubt… yuuuge. 

(Source: Reuters)

Keep in mind, this just adds some more flavor to Chevron’s already stale earnings it reported on August 8th. If you recall, the numbers definitely left investors feeling a bit “bleh” as earnings per share missed estimates by -14.90%, reporting $2.55 instead of the expected $2.93.

However, the revenue on the other hand beat expectations, as Chevron topped analysts' estimates of $50.73 billion with a cool $51.18 billion. What’s funny about this, is that this is a legit swap from Chevron’s March earnings where they reported a beat on EPS but a miss on revenue. 

(Source: Benzinga) 

Yet, while Chevron can’t have its cake and eat it too during earnings season, Wall Street is still showing some love for the energy behemoth. For instance on August 5th and 6th, (prior to the high-pressure anchor news), analysts from RBC, Goldman, and Barclays all updated their price targets for potential upside returns between 21% and 28% from current trading levels at $144 per share. 

Which makes sense considering Chevron’s anchor project also falls in line with the narrative of a “zero emission” world. So really, it’s not just about drilling for Chevron, it’s about drilling with style as this all-electric facility is designed specifically for further drilling, and reducing emissions, making it one of the greenest in the Gulf. Translation: Chevron is giving us all the “we love the planet" while flying their gas-guzzling private jet vibe. 

 

(Source: Zenger) 

But, but, but with that said though…

Despite Wall Street’s optimism, the technical aspects are completely flying in the face of analysts' bullish sentiment. For example, 14 out of 17 indicators are flashing strong sell signals, while 13 out of 15 moving averages are mirroring more bearish continuation. This again, isn’t surprising, because when it comes to Chevron’s year to date price action, it’s about as up and down as my wife's mood swings as it’s down -3.05%. 

So given all of this, what’s in it for investors?

Well this project just adds to their other five facilities that are already operating in the Gulf, but it’s definitely one of the most powerful, as the anchor is expected to retrieve 300,000 barrels per day (adding to their total of 1 million barrels a day). However, when you compare that to Exxon Mobil’s numbers in 2023, producing 2.45 million barrels, well, Chevron definitely has some catching up to do. 

Which again, is another reason why Chevron’s 34,000 feat breakthrough is even more massive. Because just think how much their output will skyrocket when they start enforcing it outside of just one rig. The sky is definitely the limit there.

(Source: Giphy) 

So in the end, do what you will with this information, but until Chevron starts lining up both on the fundamental and the technical side, there’s no clear direction of where it’s likely headed regardless of what Wall Street thinks.

And while Chevron’s high-pressure anchor project has all of the potential to be game-changing for the company, only time will tell if that will really be the case or not. 

At the time of this writing, Chevron closed +0.03% on the day (down -2.97% YTD) 

Stocks.News holds positions in Apple and Exxon Mobil Corporation as mentioned in the article.