Why Chevron, Shell and Even the Mighty ExxonMobil Are Retrenching
NEW YORK ( The Deal) -- In the oil and gas business, when the going gets rough, the tough sell assets.
 
Amid this rough patch, the sellers so far have been mostly small, debt-laden oil and gas producers that don't have a lot of extra cash in their coffers and the access to capital markets that the larger companies do. So these operators jettison non-core assets that they don't need or have the money to develop anyway.
 
 
Witness just this week Energy XXI ( EXXI) selling a gathering system in the shallow Gulf of Mexico waters to CorEnergy Infrastructure Trust ( CORR) for $245 million, which boosted its liquidity to $1 billion, and Rex Energy ( REXX) shedding its 60% stake in Keystone Clearwater Solutions to American Water Works ( AWK) for $130 million.

But recently the so-called supermajors have been doing a little housecleaning of their own, and more is expected given lower commodity prices, which are leading to weaker cash flow and sliding earnings.

"It was like a wake-up call," said Dennis Cassidy, a managing director at advisory firm AlixPartners. "The big multinationals are all rethinking their strategies."

Last week, Chevron (CVXexited Vietnam with the sale of its stakes in natural-gas properties and a pipeline project to state-owned partner Vietnam Oil & Gas Group, known as PetroVietnam.

The buyer didn't reveal the price, but industry officials have said the two partners couldn't agree on what to charge for the gas coming out of the properties, so off it went.

Industry watchers say that the San Ramon, Calif.-based company will keep selling as it tries to reach cash flow neutrality while covering its dividends. It already sold $6 billion worth of assets last year, including its stake in an oil project in Chad to the Chad government for $1.3 billion.

In March, it boosted its divestiture target by 50% to $15 billion over the next two years. So far this year, most of its divestitures have been down under, including its half stake in Australian oil refiner and retailer Caltex Australia (CTXAF) to institutional investors for $3.6 billion, its downstream operations in New Zealand to Z Energy (Z) for $558 million and its 11.4% interest in New Zealand Refining (NZRFF), also to institutional investors, for $58 million.

Even the biggest giant of them all, ExxonMobil (XOM), is lightening its load.

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