Chevron is writing down as much as $11 billion worth of assets, and it could cost the entire market.
Howard Silverblatt, senior index analyst at S&P Dow Jones Indices, said that depending on the final charge, it could reduce 2019's fourth-quarter overall S&P 500 earnings by $1.32 per share.
That would represent a big chunk of the fourth quarter's earnings as companies in the index are estimated to earn $40.40 a share in the current quarter, according to S&P Dow Jones. The whole S&P 500 is expected to earn $158.50 a share for the full year, according to estimates.
This is a big impact for the 24th-largest company in the index.
On Tuesday, Chevron said that the write-down of between $10 billion and $11 billion would be for the current quarter as the company revalues some of its assets, including shale gas production sites in Appalachia and deep-water projects in the Gulf of Mexico.
The nation's second-largest oil company also announced a $20 billion capital spending budget for 2020, and said it was considering offloading some of its natural gas projects as prices continue to falter.
"As we do that, we also look at our assets and we evaluate which assets will deliver the highest returns on investment for our shareholders ... and the assets in the Northeastern U.S., along with some in Canada and other parts of the world simply don't compete as well for our investment dollar as others do," he added.
Last month, Chevron reported a 36% drop in third-quarter profit, hit by lower oil and gas prices and refining margins. It also warned higher costs would affect fourth-quarter results.
Chevron shares have gained 8% this year, outpacing the S&P energy sector's 4% rise.
— Reuters and CNBC's Jessica Bursztynsky and Michael Bloom contributed to this report.
Correction: An earlier version of the story said the write-down would reduce 2020 earnings. The Chevron charge is for this year. This version also adds updated estimates for 2019.