CVX: Power PPA: Can't Beat AAA

Research evidence excerpt

CVX: Power PPA: Can't Beat AAA

Equity Research

Flash Comment — June 22, 2026

Integrated Oil & Gas

Chevron Corporation

Power PPA: Can't Beat AAA Overweight

Price Target: $222.00

Ticker CVX

Our Call Upside/(Downside) to Target 27.6%

CVX announced a PPA for its incoming gas generation assets with the highest credit Price (06/22/2026) $173.92

possible (MSFT AAA). The deal illustrates CVX's disciplined approach to power without 52 Week Range $142.40 - 214.71

sacrificing returns hurdles, mirroring its O&G business. Market Cap (MM) $345,388

Source: Company Data, Wells Fargo Securities estimates, and Factset.

Initial Thoughts NA = Not Available, NC = No Change, NE = No Estimate

PPA: CVX announced a 20 year, 2.67 gw PPA for power generation near Pecos (Reeves Sam Margolin

County, TX) with MSFT, supporting a large datacenter development with first power in Equity Analyst | Wells Fargo Securities, LLC

Sam.Margolin@wellsfargo.com | 212-214-8496

2028. Generation will be supplied by CVX's existing 7 gas turbine order from GEV plus

supplemental CAT turbines. The contract absorbs CVX's full GEV order and supports mid- Emma Liang

teens returns targets for the power business previously communicated by the company. Associate Equity Analyst | Wells Fargo Securities, LLC Emma.Liang@wellsfargo.com | 212-214-3322

Maya MacPherson

Economics: For CVX's power development, we assume ~$2.5M/mw in capex, funded Associate Equity Analyst | Wells Fargo Securities, LLC

through the JV with Engine No 1. CVX's share of implied ~$7B of capex from YE26 FID Maya.L.Macpherson@wellsfargo.com | 212-214-5324

through 2030 full scale activation fits within CVX's broader $18B-$21B capex range,

and we do not expect a capital step-out as a result of power development. The project

includes a gas pipeline to the site.