Meanwhile, should oil prices remain flat at $50 per barrel, Chevron may need to turn to asset sales for continued dividend coverage over the coming years, the analyst added. At a range of $40 to $50 per barrel, Chevron could see the most downside across the entire oil sector relative to consensus estimates.
Over the much longer term, Chevron does boast an "enviable" but undeveloped position in the Permian which will naturally provide optionality and volume growth — but near-term considerations can't be ignored.
"We can see the attractions of the company, however we see potential downside to estimates over 2017/18, and also expect the returns profile to deteriorate relative to European peers, which could put Chevron's premium relative rating at risk," the analyst concluded.
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