I dont know that i believe its a unicorn and it was not my only purchase over the past few weeks but in the low $30s I am willing to take on the risk as I do feel the upside will be greater than the average market return. Right or wrong, this position wont alter me significantly. Somewhat fun to just see what happens.

You're probably right. I've put most my money in ETFs, which is my normal long term strategy.

I think there's potential to double your money with XOM at $35. ETFs not so much, because they'll have some underperformers not recovering. Just my opinion.

COP is my number one for a recovery commensurate with price. I'm much less bullish on RDS with the heavy exposure to what appears a significant oversupply in LNG.

My investment thesis also centers on L48 unconventional getting pummeled and large scale projects getting delayed globally setting up a situation where we could enter low supply in 2021 relative to demand.

Most shale companies need to go into blowdown mode.

I think all majors outside of chevron will need to address their dividend if this lasts longer than 12 months.

Agreed. Not sure why so many are enamored with XOM. CVX is the better play here and will not cut the dividend. Balance sheet is in much better condition as well.

I didn't have XOM - got some yesterday for $34/share... I can't imagine that isn't a good long term add.

Cyp0111 said:

---

I think all majors outside of chevron will need to address their dividend if this lasts longer than 12 months.

---

Thanks for the $1 billion and keeping that extra acreage off our books, Oxy.

Can you explain this statement? I'm a bit confused when looking at financial metrics between XOM and CVX and seeing CVX as having a stronger balance sheet.

Net Income
Total Cash Flow
Total Debt
Return on Capital
Debt Ratio
Debt to Capital

It'd be nice to let folks see clearly as to what exactly we're comparing. Let's ignore for the minute where each company is in their respective growth and investment curves and differing revenue compositions because that doesn't seem very favorable to CVX is this price environment.

Are we just worried about the capital program and the dividend?

PeekingDuck said:

---

LCan you explain this statement? I'm a bit confused when looking at financial metrics between XOM and CVX and seeing CVX as having a stronger balance sheet.

Net Income
Total Cash Flow
Total Debt
Return on Capital
Debt Ratio
Debt to Capital

It'd be nice to let folks see clearly as to what exactly we're comparing. Let's ignore for the minute where each company is in their respective growth and investment curves and differing revenue compositions because that doesn't seem very favorable to CVX is this price environment.

Are we just worried about the capital program and the dividend?

---

To me the valuation on XOM seems better right now based on forward earnings. Maybe CVX just cut their's sooner than XOM has?

Having trouble finding a good source for what both are projecting right now. Any good sources you all would suggest?

This is what I found from their 2018 reports, obviously dated... but their capital expenditures were fairly similar so I doubt these giants changed too much in a year (excepting tariffs).

Numbers in millions.

Net Income
20,840 XOM
14,824 CVX

Total Cash Flow
40,137 XOM
30,618 CVX

Capital Expenditures
25,923 XOM
20,106 CVX

Total Debt
37,796 XOM
34,459 CVX

Market Valuation (obviously drastically changed in favor of XOM)
288,892 XOM
154,554 CVX

Return on Capital %
9.2 XOM
8.2 CVX

PeekingDuck said:

---

This is what I found from their 2018 reports, obviously dated... but their capital expenditures were fairly similar so I doubt these giants changed too much in a year (excepting tariffs).

Numbers in millions.

Net Income
14,774 XOM
2,845 CVX

Total Cash Flow from Ops
27,253 XOM
27,101 CVX

Capital Expenditures
24,361 XOM
13,963 CVX

Total L-T Debt
30,963 XOM
26,299 CVX

Market Valuation (obviously drastically changed in favor of XOM)
157,820 XOM
130,180 CVX

Return on Capital %
6.59 XOM
1.65 (take out Appalachian write down, it is 6.9) CVX

---

Updated with 2019 numbers.

The write down makes it harder for me to compare the two.

I think from there you just need to look at reserves and forward earnings.

With oil going under 20 a barrel with no relief in sight how far down will XOM fall? And will y'all be buying?

Not buying a damn thing O&G related.

Top tier midstream........maybe. EPD, MMP, KMI.

I don't know where you are getting your updated 2019 numbers.... but all you need to look at is changes in net debt for 2018 to 2019 to see why there is a major difference between XOM and CVX in this environment.

These are YE19 and 18 numbers pulled for the B/S
CVX
2018. LT debt $34.4 B Cash $10.3 B so net debt $23.1 B
2019. LT debt $27 B Cash $5.75 B so net debt= $21.25 B

XOM
2018. $36.5 b Cash: $3.1b, net debt of $33.4 b
2019. $45.2 B Cash: $3 b, net debt of $ $42.2 b

So CVX total net debt decrease a couple billion while XOMs went up by $9 B....

Why the difference?
CVX has been more aggressive on divestitures
CVX already had a huge capex/major project cycle (that went way over budget), 5+ years ago and the street hammered them, so their capex has been more disciplined posy that... and they have benefitted from the swing of the major projects coming online (xom has not)
Permian advantage- CVX largely owns the minerals on vast majority of their acreage which is a huge relative advantage to peers

So I stand by the statement that XOMs breakeven price is $65-75/bbl... (meaning they cannot cover the dividend within CF so they will continue to have to either add massive amounts of debt to protect capex/divi)....

At $20/bbl XOM doesn't have a choice... debt going up no matter what, so now they need to drastically cut capex (I think $10-15b cut).... now I'm of the mid set they should cut the divi... but they might wait a quarter or two for that

Good read on XOM, their stance on a bailout, and shale.

https://www.oilandgas360.com/exxon-may-crush-bailout-hopes-for-suffering-fracking-companies/

tam2002 said:

---

With oil going under 20 a barrel with no relief in sight how far down will XOM fall? And will y'all be buying?

---

I will

Bocephus said:

---

tam2002 said:

---

With oil going under 20 a barrel with no relief in sight how far down will XOM fall? And will y'all be buying?

---

I will

---

Me too

Total Assets (2018 Summary)
CVX 253.9 billion
XOM 346.2 billion

Total Proved Reserves Barrels Equiv (2018 Summary)
CVX 12.1 billion
XOM 24.3 billion

Interesting that actual assets/reserves don't seem to correlate with share price. Similar leverage and cash flow. Strange world we're in right now. Haven't chased down earnings projections.

Est YE 2020 leverage at the strip is ~3.7x net debt/ebitda for XOM and 1.6x for CVX.... again, how do you guys think they have similar leverage profiles

XOM is going to have to heavily pull back CAPEX and likely cut dividend 50% or they're going to end up with 3x leverage which is not ideal. I imagine they will do that to keep it in the high 2 turns.

As a shareholder in this environment I'm in favor of cutting capex and significantly cutting the dividend to fortify the balance sheet.

I'm sure they'll cut CAPEX. I don't think anyone assumes otherwise.

In at $36.

Apologies, been away from the thread a few days. I got my information from my ML Edge account. Not sure if that website finesses the numbers or not, but I did NOT pull them from the 10K. If I posted bad info, I apologize.

I went on ahead and dove back into CVX a week or two ago. Its stock has risen about $20 plus from the low a few weeks back when it fell into the $50s. Just wish I purchased them instead of in the upper $60s and low $70s.

I wish I had bought more CVX when I got it at $58, but it's still good.

We all no demand will come back. The only question that matters is how long can Saudi Arabia keep up this production. I'm surprised that the Trump administration hasn't placed more pressure in terms of withholding US military aid.

Saudi isn't going to get that many barrels to market. They're either going to have to cut or float , likely cut

Don't worry, you'll get another chance there soon enough.

Yeah, you're probably right.

41.24
+3.71

Fightin_Aggie said:

---

CHV vs XOM

Who do you all like better?

---

Do you mean CVX? I favor CVX due to lower debt load and rolloff of capital projects.

Bought XOM at $34. Take profit now and reenter later or hold?

AgAE said:

---

Bought XOM at $34. Take profit now and reenter later or hold?

---

Watching, I got in at $33 a while back.

AgAE said:

---

Bought XOM at $34. Take profit now and reenter later or hold?

---

Do you expect them to fall below 39.50 in the future. If so, the answer is probably yes.

Your crystal ball is as good as mine.