Chevron's Power Play: A New Business Model Emerges Amid Rising Dividend Yield
Chevron is one of only a handful of Dow stocks offering yields near 3% or higher, at around 3.4%. This makes it stand out among the index's non-telecom companies.
The company has recently secured a 20-year power purchase agreement with Microsoft to supply electricity to a data center campus in Texas. This contract will provide Chevron with a predictable source of cash flow and is more akin to a utility bill than selling crude oil.
Chevron's wholly owned subsidiary Energy Forge One signed the deal, which involves feeding natural gas from its own Permian Basin wells into turbines supplied by GE Vernova and Solar Turbines. This project is designed to reach roughly 2.67 gigawatts of capacity, enough to power over 530,000 Texas homes.
Chevron plans to invest $7 billion in Venezuela over the next five years, which could lead to better gas margins if successful. The company has also confirmed an oil and gas condensate discovery offshore Angola that it plans to assess as a tie-back to nearby facilities.