Chevron (CVX) is shifting its Permian Basin strategy from swift expansion to steady cash generation as it nears its long-term production target of 1 million barrels of oil equivalent per day in the region, a move expected to generate $5 billion in annual free cash flow by 2027, Bloomberg reported Thursday, citing Bruce Niemeyer, president of the company's shale business.

The oil and gas major has cut drill rigs to nine from 13 and reduced frack crews from four to three this year, marking a transition from growth to capital discipline. "We're making adjustments to rigs and the frack spreads which will reduce the amount of capital we're spending on an annual basis," Niemeyer told Bloomberg in an interview.

Chevron plans to maintain flat production through 2040 by using new wells to offset natural declines, leveraging a decade of scale and efficiency gains, as US oil prices remain below $70 a barrel and other shale producers cut back activity, the report said. The move reflects Chevron's long-term strategy to build a scaled operation and then harvest profits, with the cash supporting dividends and buybacks, the report said.

Chevron didn't immediately didn't immediately reply to a request for comment from MT Newswires.

(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

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