Before markets open Friday morning, Chevron Corp. (NYSE: CVX) is scheduled to announce fourth-quarter and full-year 2014 results. More important perhaps is an expected outlook for capital spending in 2015 and, of course, the profit picture for the year. To that last point, it is worth noting that AAA reported that a gallon of regular gas averaged $2.044 Thursday morning, up from $2.038 a day ago and $2.041 a week ago.

Royal Dutch Shell PLC (NYSE: RDS-A) said Thursday morning that it will cut capital spending by $15 billion over the next three years and is currently reviewing spending on 40 of the company’s projects. Shell’s capex total for 2014 was $35 billion.

Like Shell, Chevron — and Exxon Mobil Corp. (NYSE: XOM), which reports results next week — needs big projects to generate big new reserves to move the needle on revenues and profits. The last thing to go will be dividends, as all these companies are likely to maintain dividends in an effort to keep shareholders happy. To do that, Shell sold of billions of dollars worth of assets. Chevron has not started doing that yet, but it may have to begin if crude prices do not pick up soon.

The consensus estimate from analysts for fourth-quarter earnings per share (EPS) is $1.64, on revenues of $30.65 billion. For the year, analysts are looking for EPS of $9.75 on revenues of $212.07 billion.

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Since posting a 52-week high of $135.10 on July 24, shares are down nearly 23% as of Wednesday’s close. The stock’s forward price-to-earnings (P/E) ratio is 20.41, and its trailing P/E is less than half that at 9.46. The price-to-book ratio is 1.26, and the 50-day moving average is $107.95. The 200-day moving average is $118.29.

Analysts have a consensus price target of $117.04 on the stock, which implies a potential upside of 12.8%. Barring a surprise beat to the estimates when Chevron reports its results, we would expect some lowering of price targets at least and, if capex is cut drastically, some downgrades could be coming as well.

One other thing to watch for is how big an impairment charge Chevron takes on its reserves as a result of the low prices for crude. This number means little to investors, but it is critical to the institutions that lend to Chevron and can have an impact on the interest Chevron pays on its borrowings. The company’s long-term debt had not grown from the $20 billion level of December 2013 in the first nine months of last year.

Chevron stock traded down about 0.7% in the noon hour on Thursday, at $102.99 in a 52-week range of $100.15 to $135.10. The company’s market cap is about $195 billion.

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