Chevron’s agreement with Hess Midstream will require a write-off of up to $4 billion, covering its ownership interest in Hess Midstream, including the general partner interest, and some of its own midstream assets. The article argues the charge is small relative to Chevron’s market cap of around $440 billion and its debt-to-equity ratio of roughly 0.2x, which is second-lowest among peers after ExxonMobil at about 0.16x. Management believes the deal could cut Chevron’s midstream costs in the Bakken region by as much as 50%. Chevron has 38 consecutive annual dividend increases and a 3.1% yield, above the energy industry average of 2.4%. The author views Chevron as suited to long-term dividend investors and treats the charge as an upfront cost for lower costs in future years.
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