Chevron (CVX) Gains Approval for North Sea Project

NEW YORK (TheStreet) -- Chevron (CVX) announced Monday that it received approval from the U.K. government to develop the Alder gas field in the Central North Sea off the coast of Britain.

Chevron shares fell 0.8% to $120.08.

The Alder Field project in the Central North Sea is expected to begin producing sometime in 2016. The facility is designed to handle 110 million cubic feet of gas and 14,000 barrels of condensate per day. Chervon hasn't announced the size of its investment in the Central North Sea.

TheStreet Ratings team rates CHEVRON CORP as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about its recommendation:

"We rate CHEVRON CORP (CVX) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, attractive valuation levels, good cash flow from operations and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had somewhat weak growth in earnings per share."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • CVX's revenue growth has slightly outpaced the industry average of 5.6%. Since the same quarter one year prior, revenues slightly increased by 1.6%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • CVX's debt-to-equity ratio is very low at 0.13 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.20, which illustrates the ability to avoid short-term cash problems.
  • Net operating cash flow has increased to $10,316.00 million or 33.45% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 2.81%.
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.

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