As Oil Prices Fall to $70 A Barrel, Which Oil Stocks Are Worth Considering?

In recent months, oil prices have been declining. While falling oil prices affect the profits of oil companies, several producers are well-prepared to handle this downturn. Chevron (CVX) and Devon Energy (DVN) stand out for their ability to thrive even in low oil price environments.

Chevron has established a robust global resource portfolio that allows the company to achieve high profit margins and returns on investment, enabling it to prosper even at lower oil prices. The company has stress-tested its portfolio to withstand significantly lower oil prices. The downside scenario assumes oil prices will stabilize at $50 from 2025 to 2027. In this pessimistic scenario, Chevron would generate enough operating cash flow to cover increasing dividends and planned capital expenditures.

On the other hand, the upside scenario assumes oil prices will stabilize at $70 from 2025 to 2027. In this environment, Chevron could buy back shares at the upper end of its target range, allowing for the repurchase of up to 6% of its outstanding shares each year. This price point would also enable the company’s free cash flow to grow by over 10% annually.

Additionally, Chevron is working to enhance its ability to thrive in a low oil price environment by acquiring energy company Hess. At an oil price of $70, acquiring Hess would help Chevron more than double its free cash flow by 2027.

Due to falling oil prices and delays in acquisition transactions, Chevron’s stock has declined by double digits over the past year, making it appear to be a bargain. With a dividend yield of nearly 4.5%, the stock is particularly attractive to income-seeking investors.

Devon Energy has established a premier multi-basin oil and gas business in the U.S. Its growing scale reduces costs and enhances profitability. Devon can generate substantial free cash flow at an oil price of $70 per barrel, with a free cash flow yield of about 9% at this price point. This yield is more than double that of the S&P 500 and triple that of the Nasdaq, indicating that Devon Energy’s stock is very inexpensive.

Devon Energy is working to expand its scale and profitability through the acquisition of Grayson Mill Energy. This high-value acquisition will further increase Devon’s free cash flow, even in a lower oil price environment.

Devon Energy’s stock has dropped nearly 25% from its highs earlier this year, prompting the company to repurchase more shares. Recently, the company increased its stock repurchase authorization by 67% to $5 billion, with plans to complete this by mid-2026.

 

 

油价跌至每桶70美元之际，哪些石油股还值得考虑？

近几个月来，油价一直在下跌。虽然油价下跌会影响石油公司的利润，但几家生产商已经做好了应对油价下跌的准备。雪佛龙(CVX)和戴文能源(DVN)因在低油价下蓬勃发展的能力而脱颖而出。

雪佛龙建立了一个优势全球资源投资组合，使该公司能够获得高利润率和投资回报，这意味着它仍然可以在低油价下蓬勃发展。该公司已经对投资组合进行了压力测试，以应对低得多的油价。下行情景假设从2025年到2027年油价持平在50美元。在这种悲观情景下，雪佛龙将产生足够的运营现金流来支付不断增长的股息和计划的资本支出。

与此同时，该公司的上行情景假设从2025年到2027年油价持平在70美元。在这种环境下，雪佛龙可以以目标范围的高端回购股票，足以每年回购6%的流通股。这个价格点也足以使该公司自由现金流每年增长10%以上。

雪佛龙正在努力通过收购能源公司Hess来进一步增强其在低油价下蓬勃发展的能力。在油价70美元的情况下，收购Hess将有助于雪佛龙到2027年将自由现金流增加一倍以上。

由于油价下跌和收购交易推迟，雪佛龙的股价在过去一年中下跌了两位数，因此雪佛龙股票看起来是个便宜货。考虑到近4.5%的股息收益率，该股对寻求收益的投资者尤其有吸引力。

德文能源建立了首屈一指的多盆地美国石油和天然气业务。不断增长的规模降低了成本并提高了盈利能力。德文可以在每桶70美元的价格下产生大量自由现金流。该股在该价格点的自由现金流收益率约为9%。这是标准普尔500指数自由现金流收益率的两倍多，纳斯达克指数的三倍，这意味着德文能源的股价非常便宜。

德文能源正努力通过收购Grayson Mill Energy来扩大规模和盈利能力。这项高度增值的收购将进一步增加德文能源的自由现金流，即使在较低的油价下也是如此。

德文能源股价已从今年早些时候的高点下跌了近25%，这导致该公司回购更多股票。该公司最近将股票回购授权增加了67%，达到50亿美元，预计将在2026年中期完成。