Last week, we saw Chevron
The acquisition should prove shrewd in time, but there may be another motivating factor guiding Chevron here: a suddenly constrained opportunity set in North America, given the permitting situation in the Gulf of Mexico.
As I've pointed out in recent weeks, uncertainty reigns when it comes to the outlook for offshore exploratory drilling. Whereas ExxonMobil
What got me thinking about this was a comment by Newfield Exploration
This revelation by Newfield, one of the more active independents in the deepwater, indicates that it's possible we'll see a significant pullback in offshore exploratory budgets next year. Not all companies are holding back, however. Nexen
The controversy surrounding hydraulic fracturing makes operating in the Marcellus no walk in the park, but compared with the dysfunctional regulatory scene in the Gulf of Mexico today, Pennsylvania looks like a quite palatable place to deploy capital. I can hardly blame Chevron or Newfield for making the move from choppy waters to solid ground.
Fool contributor Toby Shute doesn't have a position in any company mentioned. Check out his Motley Fool CAPS profile or follow his articles using Twitter or RSS. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool owns shares of ExxonMobil and has a disclosure policy.