Moody's lifts Chevron view to positive

Moody's Investors Service said it changed Chevron Corp.'s outlook to positive from stable.

The agency also said it affirmed the company's Aa2 issuer and senior unsecured ratings, prime-1 short-term rating, along with those same ratings on its guaranteed subsidiaries.

The positive outlook reflects an expectation of continued free cash flow generation and debt reduction, strengthening the company's resiliency to volatile oil prices, Moody's said.

The company's enlarged production profile following the completion of its major development projects and ability to grow that production going forward through more flexible short-cycle capital spending distinguishes Chevron from its peers and provides the potential for its rating to rise to Aa1, the agency explained.

For 2019, Moody's said it forecasts that Chevron will generate about $6 billion of free cash flow with retained cash flow-to-net debt of about 70%.

The ratings are supported by the company's large scale and globally integrated operations, the agency said.

Like its peers, Chevron faces the ongoing challenge to replace its reserves and the accompanying capital intensity, Moody's said.

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