Chevron could be headed for a cash crunch after years of big spending when oil prices were high are now catching up with the firm.

According to Seeking Alpha, Chevron’s dividend currently costs about $8.1 billion per year but available cash has declined from about $20 billion in 2012 to just over $11 billion currently.

Chevron reported  a loss of $588 million fourth quarter loss, or $0.31 per diluted share, down significantly from earnings of $3.5 billion in the fourth quarter of 2014.

Full year 2015 earnings fell to $4.6 billion, or $2.45 per diluted share, down from $19.2 billion, or $10.14 per diluted share, in 2014.

While low oil prices are partially to blame for Chevron’s cash woes mounting debt could also pose a problem.

The company added $10.7 billion to its debt load last year, three years after its debt level surpassed its cash level, Seeking Alpha said.

Dividend payments could also start to weigh on Chevron’s bottom line.

Chevron’s dividend payout ratio currently stands at 175 percent if the company doesn’t cut its dividend, Seeking Alpha said.

At that ratio, Chevron will have to pay out nearly double its 2015 earnings in dividends.

CEO John Watson acknowledged in Feburary that earnings were “down significantly from the previous year” and said the company is “taking significant action to improve earnings and cash flow in this low price environment.”

Chevron earned $6 billion in proceeds from asset sales in 2015 and has said it has planned further sales for 2016 to 2017.

The company confirmed in Feburary that it will speed up divestitures from its mature shallow water assets in the Gulf of Mexico as it looks to trim expenses and focus on deepwater assets.

The privately held fund founded by famed investor George Soros confirmed that same month that it sold all of its shares in Chesapeake Energy, Chevron and NRG Energy in the fourth quarter 2015.

News of the sell off came just two weeks after T. Boone Pickens revealed that he has exited all of his oil and gas holdings.


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