What Makes Chevron's Gulf of America Oil Bet So Compelling

Globe and Mail

23-06-2025

Chevron Corporation CVX is leaning heavily on the Gulf of America (GOA) to fuel its next wave of production growth. In April 2025, the company brought first oil online at Ballymore, a key asset expected to produce around 75,000 barrels per day once all three initial wells ramp up. Just months earlier, production began at Whale — another major deepwater project designed for 100,000 barrels of oil equivalent per day (BOE/d) at peak. With multiple phases still ahead, these developments represent the core of Chevron's plan to reach 300,000 net BOE/d from the GOA by 2026 — a 50% jump from the 2020 levels.
Behind the numbers is a broader strategic shift. Chevron is combining decades of operational experience with new technologies to unlock deepwater resources more efficiently. Whale, for example, leverages a simplified facility design and energy-efficient systems to reduce emissions and cost per barrel. Similarly, the high-pressure Anchor platform — operational since August 2024 — is built to handle extreme conditions, with a resource base estimated at 440 million barrels of oil-equivalent. Together, these assets represent some of Chevron's highest-margin, lowest-carbon barrels globally.
This push isn't just about drilling more — it's about drilling smarter. Chevron's updated project models are helping it reduce costs, increase efficiency, and extend the life of its fields. For instance, the Tahiti platform, which has been producing since 2009, has since crossed 500 million barrels and could continue operating into the 2040s. Backed by more efficient designs and low-carbon intensity output, Chevron's Gulf operations are positioned to remain a strong, high-margin part of its portfolio.
Some Other Supermajors Active in the GoA
Europe's largest energy major Shell plc SHEL is the largest operator in the GoA, known for pioneering deepwater oil and gas production. Its operations — like Perdido, Vito, Whale, and the upcoming Sparta — showcase advanced, cost-efficient technology. With lower-than-average emissions and a 40% cut in methane since 2016, Shell is pairing innovation with sustainability in one of the world's most challenging offshore environments. Shell continues to lead with standardized designs, robotics and efficient subsea systems, keeping safety and environmental performance at the core of its offshore strategy.
Continental rival BP plc BP is also one of the top oil producers in the GoA, operating major hubs, including Atlantis, Mad Dog and Thunder Horse. With $7 billion in investments through 2025, BP aims to exceed 400,000 BOE/d in production from the region by the end of the decade. BP is also unlocking deep resources through projects like Kaskida, using smart, replicable platform designs for future expansion.
CVX's Price Performance, Valuation and Estimates
Shares of Chevron have lost more than 6% in the past year.
From a valuation standpoint, Chevron's forward 12-month P/E multiple stands at over 19X.
The Zacks Consensus Estimate for 2025 and 2026 EPS has moved up 4% and 1%, respectively, in the past 30 days.
Image Source: Zacks Investment Research
The stock currently carries a Zacks Rank #3 (Hold).
You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
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