Proactive Investors - Chevron Corporation (NYSE:CVX) said it will impair a portion of its US upstream assets for the fourth quarter of 2023 due to continuing regulatory challenges in California that have resulted in lower anticipated future investment levels in its business.
In a regulatory filing, the oil major said it expects to continue operating the impacted assets for many years to come.
The company said it will also recognize a loss related to abandonment and decommissioning obligations from oil and gas production assets it previously sold in the US Gulf of Mexico.
A portion of the obligations are likely to revert to Chevron after the companies that purchased the assets filed for Chapter 11 bankruptcy, it said, adding that it expects to undertake the decommissioning activities on these assets over the next decade.
“The Company is in the process of finalizing the financial impacts of these actions, which it expects to treat as special items and exclude from adjusted earnings,” Chevron said.
“These actions in the aggregate are currently estimated to result in non-cash, after-tax charges of $3.5 billion to $4.0 billion in the Company’s fourth quarter 2023 results.”