It's not easy buying energy stocks right now. The price of Brent crude is down to $56 per barrel, a stunning decline from over $100 per barrel this time last year. Such tough operating conditions make it very difficult for Big Oil to make money. Naturally, stocks of all sorts are down across the energy sector. One that has gotten hit hard in particular is integrated major Chevron (NYSE: CVX), which has seen its stock price fall 27% over the past year, and 16% since the start of 2015.

CVX Chart

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While it doesn't seem like there is much hope for Big Oil, there are reasons to believe Chevron has brighter days on the horizon. It has several major projects set to ramp up over the next few years, and it can weather the current storms by effectively cutting spending. For these reasons, Chevron's short-term stock price decline could actually be an opportunity for long-term gains.

Projects set to fuel Chevron's future
Two of the most important projects for Chevron's future are both liquefied natural gas, or LNG, projects, and both are in Australia. These two are the Wheatstone and Gorgon fields, which are massive projects that are finally nearing completion. The Gorgon Project includes a 15.6 million tonnes-per-annum liquefied natural-gas facility. The project is more than 90% complete. Chevron holds a 47% working interest there. Management stated on last quarter's conference call with analysts that they expect Gorgon to start up in the third quarter this year, and have first gas by the end of the year.


Wheatstone Project. Source:

Meanwhile, the Wheatstone development is almost 60% complete, and includes two LNG trains with a combined capacity of 8.9 million tonnes per annum and a domestic gas plant. First shipments are expected in 2016. Chevron owns a 64% interest there.

These two projects are extremely important to Chevron's future. Collectively, the investments Chevron made in its Australian projects accounted for $7.1 billion, or 46%, of its investments in oil and gas producing activities last year.

The reason for such huge investment is clear: Australia holds a vast amount of discoverable reserves. In fact, at the end of 2014, Chevron's operations in Australia held approximately 700 million barrels of oil equivalents that were undeveloped for five years or longer. This represents 28% of Chevron's total reserves that have been undeveloped for that length of time. Furthermore, Australia accounts for 64% of Chevron's proved undeveloped natural gas reserves.

Another key area of interest is the deep water Gulf of Mexico, where Chevron has a significant interest through its Jack/St. Malo project. First production here was delivered in December 2014. There are currently five wells producing, but are already highly productive at more than 70,000 barrels per day. And this production is only set to increase from here. Chevron management expects Jack/St. Malo to produce more than 100,000 barrels per day by next year.

Due largely to these projects, Chevron expects to increase total production by 20% from 2014-2017.

Capital discipline keeps dividends flowing
Thanks to its stock-price decline, Chevron's dividend yield has been pushed up to 4.5%, a level not seen since the Great Recession. A soaring dividend yield is often a red flag that the company is in dire financial trouble and that the dividend may be cut. But Chevron is a massive company, with enough scale to reduce costs wherever necessary to preserve its dividend. After all, investors care deeply about Chevron's payout. It's a Dividend Aristocrat, having increased its dividend for 27 years in a row.

Management understands how seriously investors take the dividend, and has taken the necessary steps to protect the distribution. First is by cutting capital expenditures. Capital spending will total $35 billion this year, a 13% reduction from 2014. In addition, Chevron will suspend buying back stock this year, which will save another $5 billion.

Lastly, Chevron is aggressively selling assets deemed noncritical to the future. The company realized approximately $4 billion in divestments over the first four months of this year, after shedding $6 billion in assets last year. It is on track to raise as much as $15 billion over its stated 48-month divestment program.

These measures should support Chevron's dividend. The current $4.28 per share annualized dividend accounts for less than half the company's trailing 12 month EPS. And, by 2017, management expects to cover the dividend with free cash flow. The key takeaway for investors is that while it's a scary time to be in the energy business, Chevron still has a bright future ahead of it, thanks to its promising upstream oil and gas projects and its effective financial management.

Bob Ciura has no position in any stocks mentioned. The Motley Fool recommends Chevron. Try any of our Foolish newsletter services free for 30 days. 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 Motley Fool has a disclosure policy.