Chevron CVX, the prominent U.S. energy company, commenced the process of selling its oil and gas assets in Congo, according to reliable sources from the industry. The key objective behind this move is to concentrate its operations on more lucrative and contemporary production ventures.

The Congo assets, per two sources linked to the process, hold a potential value of up to $1.5 billion. Chevron received bids for these assets recently, as confirmed by one of the sources.

As a response to these reports, the company released a statement, saying that it does not comment on rumours or assumptions regarding its commercial activities, including prospective acquisitions or divestitures. It emphasized that such matters are consistently under review.

Last year, CVX’s production in Congo declined approximately 40% from the 2019 level to 31,000 barrels of oil equivalent per day (BOE/D). The company holds a 31.5% non-operated stake in the offshore Haute Mer permit blocks and a 31.3% operating interest in the Lianzi Unitization Zone, situated in an area shared jointly by Angola and Congo.

Chevron has been divesting its legacy crude assets in Africa to concentrate on projects with low costs and low carbon emissions (during production), including its onshore operations in the United States. The company sold oil fields in Nigeria in 2021, and is currently looking for new oil and gas resources in Namibia.

Recently, Chevron signed a $6.3 billion deal to buy U.S.-based shale producer PDC Energy. With this acquisition, the company hopes to add high-quality assets to its portfolio and provide an impetus to its operations in the United States’ key production basins.

Zacks Rank and Key Picks

CVX, one of the largest publicly traded oil and gas companies in the world, operates under two segments — Upstream and Downstream. It currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks for investors interested in the energy sector are Evolution Petroleum EPM, sporting a Zacks Rank #1 (Strong Buy), and Archrock AROC and Ranger Energy Services RNGR, each holding a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Evolution Petroleum: EPM is worth approximately $219.16 million. EPM currently pays investors $0.48 per share, or 7.38% on an annual basis.

The company currently has a forward P/E ratio of 6.07. In comparison, its industry has an average forward P/E of 7.50, which means EPM is trading at a discount to the group.

Archrock: AROCis valued at around $1.55 billion. It delivered an average earnings surprise of 26.27% for the last four quarters and its current dividend yield is 6.06%.

Archrock is a provider of natural gas contract compression services and aftermarket services of compression equipment.

Ranger Energy Services:RNGR is valued at around $183.61 million. In the past year, its shares have risen 13.8%.

Ranger Energy Services currently has a forward P/E ratio of 5.30. In comparison, its industry has an average forward P/E of 11.60, which means RNGR is trading at a discount to the group.