Oil is understandably a large commodity in California, the United States and worldwide. There are several companies that dominate the oil industry — one of which is Chevron — that have attained massive profit within the industry. Although companies like Chevron have made more than sizable profits, the future profits of the company will still depend on well-forecasted business planning in the months and years to come.

A recent report indicates the California oil giant Chevron may be seeking to acquire another company in an effort to undergo proactive business planning that would facilitate future profits. Reports indicate that Chevron has cash assets worth an estimated $21.3 billion, but are currently reporting low production results. Even though the company has sizable cash assets, the low oil production can quickly and significantly affect the company’s overall profit.

The company is currently invested in collecting natural resources in Australia, which is expected to generate a large influx of natural resource product. The addition of these natural resources, the company may need to expand through additional resources to maximize its potential growth. One of the most common ways for a company to expand its resources and increase production and profit is to acquire a related company.

Acquisitions may be commonplace for many companies, but generally require a significant cash payment and a heck of a lot of detailed preparation. The cash payment typically required for an acquisition may be difficult for a company to put together, but this may place Chevron in a unique situation. The amount of cash held by Chevron may allow the company to transact a sizeable acquisition. Business planning is essential for all types of businesses and can provide for a company’s long-term stability.

Source: Bloomberg.com, “Chevron Seen Eyeing Cobalt to Kosmos in Oil Hunt:Real M&A,” Joe Carroll, Dec. 6, 2012