Unnamed: 0 int64 | symbol string | quarter int64 | year int64 | date string | company_name string | company_id float64 | text string |
|---|---|---|---|---|---|---|---|
2,000 | CRM | 1 | 2,025 | 2024-05-29 17:00:00 | Salesforce, Inc. | 122,917 | Brian Millham: Yes, EMEA was weaker in the quarter, frankly, feeling some of the measured buying environment most pronouncedly actually felt it also in the Americas. But there are other pockets around the world that were very strong. Canada was a strong region for us in the quarter. I mentioned our Japan business really accelerated in the quarter, really outstanding performance from our Japan business. So the big businesses are going to feel the impact, obviously, of the measured buying environment. In the Americas, more exposure to technology, which I think we all know has been a tough industry over the last several quarters. On SMB and other areas, the transactional business, these are the areas where you're going to feel some of those headwinds in the business. So spot on EMEA and America sort of feeling the impacts of the measured environments.
Operator: Your next question comes from the line of Kirk Materne from Evercore ISI.
Kirk Materne: Maybe for Marc or Brian. But I was just kind of curious, when we think about this measured buying environment, is there any sort of crowding effect around AI that's impacting software in your view, meaning when you think about all these companies starting to gear up for this next platform shift. Is just the uncertainty of what they're going to spend on over the next six to 12 months holding them back perhaps on what their normal sort of pace of spending might be with you all or other enterprise software companies? I know it's sort of an ongoing question, wondering if you all could weigh in. |
2,001 | CRM | 1 | 2,025 | 2024-05-29 17:00:00 | Salesforce, Inc. | 122,917 | Marc Benioff: Well, let me give you my swing at exactly where we are, and then I'm going to turn it over to Brian to fill in the detail. I think when you look back over the last four years, Salesforce entered the pandemic in 2020, as four years ago, almost exactly, about half the size that we're at now. We've doubled our company at scale from $20 billion to approximately $40 billion, that's how I look at it in my mind. You can fill in the exact numbers. And over that period of time, we saw an incredible surge in the demand and buying environment and in the sales environment, especially during the pandemic. As we entered the post pandemic reality, we saw companies who had acquired so much software in that time look to actually rationalize it, ingest it, integrate it, install it, update it. I mean, it's just a massive amount of software that was put in, and so for every enterprise software company kind of has adjusted during end of this post pandemic environment. So when you look at all of these companies, especially as you saw the report in the last 30 days, they're all basically saying that same thing in different ways. When you take AI, that has to be our growth driver for future capabilities for these companies. AI, when we look at these companies and the stories that we told on the call, whether it's FedEx or Air India, or CrowdStrike, or Paychex, or any of the huge deals that we did in the quarter, what we're seeing is not only the installation and integration and implementation, of the platforms that we've sold in the last four years, but the layering in of this new capability, which is delivering for these companies a kind of a capability that we weren't able to forecast four years ago. And when we saw, like I told you the story of FedEx, like when we talk to their top executives about what they've delivered or you take an incredible company like State Farms is kind of automated 60 million policyholders, thousands of agents, they're just able to deliver at a level of capability. And I said it before, but |
2,002 | CRM | 1 | 2,025 | 2024-05-29 17:00:00 | Salesforce, Inc. | 122,917 | 60 million policyholders, thousands of agents, they're just able to deliver at a level of capability. And I said it before, but profitability, employee augmentation, better customer relationships, much higher margins, these are financial metrics that we're able to deliver into these implementations, that's on top of where we were four years ago. So I think that as -- and the point I was trying to make here earlier, and I'll keep making, which is, the most important thing Salesforce is doing is not just continuing to automate every customer touchpoint. This is obviously critical and why we've been able to consume this 250 petabytes of information. But the second key point is we've rebuilt the way that we are delivering a foundation of data for our customers. Why is that so important? Because as we have now rearchitected all of our apps and all of our capabilities to fuel and fund this Data Cloud, it means that for our customers going forward, they're going to be able to take this Data Cloud and leverage that into their future capability and growth and especially profitability and productivity. And that is where our whole company, and I think our whole industry, is eventually going to go. Not every company is as well positioned as you know for this artificial intelligence capability of Salesforce is because they just don't have the data. They may say they have this capability or that capability, this user interface, that model, that, whatever, all of these things are quite fungible and are expiring quickly as the technology rapidly moves forward. But the piece that will not expire is the data. The data is the permanent key aspect that -- as we've said in our -- even in our core marketing, it's the gold for our customers and their ability to deliver our next capability in their own enterprises. And Brian, I'll turn it over to you. |
2,003 | CRM | 1 | 2,025 | 2024-05-29 17:00:00 | Salesforce, Inc. | 122,917 | Brian Millham: And I -- all those things absolutely true. Marc said earlier, 75% of Gen AI will benefits will come from the front office, and we're really feeling that right now in our demand we're seeing from our customers and the pipelines that we're creating out there, solid performance on pipe gen. I do think customers are getting their data estate in order as a precursor to leveraging AI capabilities, and we're seeing that with the growth of Data Cloud right now. Customers really wanting to bring together many data [Technical Difficulty] our capabilities. So I think it's actually a step process for many of our customers. Let's get our data in order and then let's layer in the AI to really drive the productivity gains that we expect. And so that's really what we're seeing in the market right now, Kirk.
Operator: Your next question comes from the line of Karl Keirstead from UBS.
Karl Keirstead: Maybe I'll switch subjects. So Marc and Amy, there was some concern in your shareholder base in March and April around media reports related to M&A. I know you can't comment on those reports, not expecting that, but wondering if you could comment on your M&A framework, whether there has been any change to it at all, I think might be helpful. |
2,004 | CRM | 1 | 2,025 | 2024-05-29 17:00:00 | Salesforce, Inc. | 122,917 | Marc Benioff: No, I'd love to talk about that, and I think it's extremely important. I mean, Salesforce has a long history of innovation. Organic innovation like we've seen today with Data Cloud, everyone, I'm sure, is extremely impressed with the growth of that product. But also inorganic innovation and a lot of our customer touchpoints, whether it's our commerce platform or our marketing platform and our integration platform our inorganic innovation, products that we acquired, many of them at a multi-hundred million dollar revenue level that are at the multibillion-dollar revenue level. Some of the largest, most important software companies in the market today are actually companies that we acquired at much smaller levels. And all of you know Salesforce's story and how we put all of that together. And of course, I've mentioned we're rearchitecting almost every single one of those products and quite successfully and redeploying them to our customers into a single integrated data fabric to provide the power of future artificial intelligence. Now when we look at all of that combined, we always are looking at what is the next level of innovation. And so we're going to be looking at products organically. But yes, we will continue to look at products and organically. But as we've committed to you, if we're looking at a large scale acquisition, we're going to make sure that it is not dilutive to our customers that it's accretive, that it is -- has the right metrics. And we're also going to be quick to walk away from things that we are not totally confident in or that we don't have the trust with whatever company that we're looking at. So we have operated inside that framework. We continue to acquire companies. We just acquired amazing new company called Spiff, which is part of our Salesforce automation platform. It's an amazing capability. I mean Salesforce, as you know, is the number one SFA platform in the world. That SFA platform got a lot better this quarter with the capabilities now that it's deeply integrated |
2,005 | CRM | 1 | 2,025 | 2024-05-29 17:00:00 | Salesforce, Inc. | 122,917 | platform in the world. That SFA platform got a lot better this quarter with the capabilities now that it's deeply integrated into Data Cloud, which gives SFA customers the next step of growth with our SFA platform, but also it has an incredible new level of artificial intelligence and Generative AI capabilities now built into the Sales Cloud. And in addition, it also has compensation capabilities through Spiff, and that's through inorganic and that was acquired through our new M&A framework, for example. And as we go forward, we're going to continue to look at those opportunities. And look, we're not going to shy away from M&A for any one particular reason if it's within our framework. But if it's outside of our framework, we're going to be extremely cautious. And let me have Amy reiterate what the attributes of that framework are and how we look at M&A, because I don't think any company has been more successful with M&A than Salesforce has been. I mean that's how we've built our Customer 360 and have this incredible, incredible platform that we're able to automate these amazing companies with what we've gone through. But as we go forward, we know that we need to slightly adjust that so that we can continue to deliver to you these amazing financial metrics that you see, like you see this amazing cash flow number and margin number that we've seen rarely before in the software industry, maybe only a couple of companies have ever delivered cash flow at this level. And I think it's higher than most of the great consumer companies like Coke and Starbucks and all of that, like it's pretty -- these numbers are pretty epic in that area. But we know to deliver -- continue to deliver cash flow and margin numbers at this level. We're also going to have to continue to keep our eye on the M&A framework. So Amy, let's talk about that. |
2,006 | CRM | 1 | 2,025 | 2024-05-29 17:00:00 | Salesforce, Inc. | 122,917 | Amy Weaver: Let me back it up a little bit to talk about our capital allocation strategy overall. And it's really very simple. We are going to continue to expand our free cash flow margin as we scale. We are going to invest in innovation. As Marc said, that is organic and it can be inorganic, if it matches our principles and our goals. And we're going to return cash to shareholders and we're doing that now both through our share repurchase program and our dividend program. Now on the inorganic perspective, as you brought up, we're always going to be opportunistic. M&A has been an incredible part of our past. I'm sure at the right time will be part of our future. But it's got to fit into the framework that we have been outlining for the last few days. We're going to have to have a time line to value accretion. We're going to need to prioritize our use of the balance sheet and it's got to be a best-in-class asset. And when all that comes together, that's what we'll be focused on. In the meantime, I really want to talk about our goal, we are trying to optimize shareholder value. At the end of the day, that's the single most important element. And we're doing that by focusing on delivering very strong free cash flow per share. We're doing this by our focus on profitable growth and by very carefully managing our dilution. And when you bring that together, I am very confident in our long term free cash flow per share opportunity and very confident about our capital allocation strategy overall.
Operator: Your next question comes from the line of Raimo Lenschow from Barclays. |
2,007 | CRM | 1 | 2,025 | 2024-05-29 17:00:00 | Salesforce, Inc. | 122,917 | Operator: Your next question comes from the line of Raimo Lenschow from Barclays.
Raimo Lenschow: Obviously, this quarter was impacted on the booking side. Maybe a question for Brian and Amy here. If you think about the two factors you pointed out, one is the economy, one is the -- on the sales changes at the beginning of the year. On the economy side, like we've been talking about a tough selling environment for a while now. Has it gotten worse from what you've seen or is it -- are the issues this quarter more coming from the sales reorg?
Brian Millham: Hard to parse apart what the two impacts were in our first quarter, no doubt about it. We did have some changes that I outlined in the quarter as we set ourselves up for productivity in FY25. The economy question, I think, is one that we feel like it's similar to what we felt in the first half of last year, the same measured buying environment that we experienced in the first half is sort of what felt like the same in Q1. We came off a Q4 that was very solid, very, very strong performance. In retrospect and hindsight, we may have been in a similar environment, but executed very well as the sales team in that fourth quarter. So hard to really parse apart these things. But when you look at some of the transactions that we saw in Q1, we saw a compression on many deals that we ultimately ended up getting done, but they got smaller when we ultimately closed them. We saw a couple of deals push out of the quarter as people delayed decisions that were -- that we thought would actually happen in our first quarter. And there's no decision issue, it’s coming up more frequently than we anticipated. So hard to really parse those two things apart. But when you combine them both in a particular quarter, it can have an impact of lower bookings, and that's what we felt in our first quarter. |
2,008 | CRM | 1 | 2,025 | 2024-05-29 17:00:00 | Salesforce, Inc. | 122,917 | Marc Benioff: I think I'd also like to add, and I'll just give you a little color on the narrative inside our company. When we look at operating inside this environment, which we've been now going through for a couple of years and we look at, hey, how do we continue to deliver these strong ACV numbers, but also how do we continue to deliver the overall strong financial metrics. At the same time, it's important that we're delivering this high level of customer success to prepare for our future growth. It's really along three lines. And those three lines, first of all, is we are just having to start every quarter with much higher pipelines. We look at these pipeline multiples as much higher than we've traditionally had to start with. And this is really critical in managing our distribution organization and overall success in the quarter. And where traditionally, we might have to start our pipelines at 2 times, now our message to our distribution leaders is, hey, if you're going to start out your pipeline in the quarter, you better start out at 3 times. And this is also our message to our peers as well to evaluate the pipeline much more aggressively than ever before, that means a much deeper inspection of the pipeline but holding it at a much higher level. That is evidence of this environment. And if you would ask any leader in this company, how many times they've heard from me or from Brian that they better started at a 3 times pipeline, because that is the world that we're in today. The second attribute that's incredibly important for all of our leaders in our company or throughout our industry is you might need a much higher level of enablement. What that means is so many people have come into our industry in the last five or even 10 years, a lot of them just need the level of training, capability, especially as we move into this new area of artificial intelligence, Generative AI, data, the kind of capabilities that we're talking about when we explain to people how models work, how UIs work, how data frameworks |
2,009 | CRM | 1 | 2,025 | 2024-05-29 17:00:00 | Salesforce, Inc. | 122,917 | the kind of capabilities that we're talking about when we explain to people how models work, how UIs work, how data frameworks work and how it works in regards to our software and our platforms and our architectures, that is requiring a level of training that is incredibly important. And when we're talking about companies at scale like Salesforce who have very significant numbers of sales people, I’m not going to go into all of the details of how it's organized and how many we have. But just know that, that requires a very high level of enablement and that's the second key attribute managing this framework -- in this environment. And the third is a level of stability. Now when you enter the first quarter of any fiscal year, there always is going to be a desire of every sales organization to slightly shift, slightly adjust their strategy and their organization to reflect the demand for the fiscal year, you start the fiscal year writing your business plan, thinking about how you're going to execute. And then you have to look at, how much disruption are you able to tolerate in the quarter? Because if you over shift, if you do too much, you will end up with more volatility in the quarter in the ACV than you like. Now it may result in a better fourth quarter. A good example is last year, where we saw, okay, in the first quarter, we might not have achieved exactly everything we wanted because we had too much disruption, but by the fourth quarter, we overdelivered. So there is a level of balance that has to be achieved in regards to stability and disruption. And those four attributes having 3 times pipelines, having much higher levels of enablement and having much level -- higher levels of stability, that is the key to managing in this environment in this part of the industry right now. And when I talk to my peers and other major enterprise software companies, that is what I'm really emphasizing to them. And for all of them, of course, it's good if they're using our products because our products are really the key to |
2,010 | CRM | 1 | 2,025 | 2024-05-29 17:00:00 | Salesforce, Inc. | 122,917 | to them. And for all of them, of course, it's good if they're using our products because our products are really the key to making all of that happen because we're able to deliver for these companies all of those things that they need to have that level of success as well. |
2,011 | CRM | 1 | 2,025 | 2024-05-29 17:00:00 | Salesforce, Inc. | 122,917 | Operator: Your next question comes from the line of Kash Rangan from Goldman Sachs.
Kash Rangan: Marc and team, actually looking at the Salesforce Tower from my office here. And I'm thinking about the past. Marc, you've been through all these cycles before. Maybe it's just cyclical, maybe high interest rates causing economic uncertainty, maybe it's as simple as that, or maybe it's structural. And if it's structural, maybe there's an architectural change going on. And Marc, you drove the last big architectural change from distributed computing to internet computing. And how confident you are that this generative AI, which is causing an upheaval in that whole tech stack is not something to take lightly? And what are the things that the company is preparing if it's not just cyclical or maybe there’s structural change that's going on, what are the things that you are doing to the company to bulletproof, because typically, people incumbents miss big transitions, right? You and I have seen that, we've all seen that. And one of the things you're doing to ensure that, you're bulletproof in that regard that you're absolutely ready architecturally for the next cycle. |
2,012 | CRM | 1 | 2,025 | 2024-05-29 17:00:00 | Salesforce, Inc. | 122,917 | Marc Benioff: Well, I will just say -- I'd like to make a couple of comments on that. I think that, number one, it's been pretty magical to use OpenAI over the last year, especially in the last release where I'm really talking to it. And when I think about the incredible engineering effort that OpenAI has done, it's pretty awesome. They've built a great UI. I love talking to the software. They have really strong algorithms or what we call models, especially their new one, which is their 40 model. And then they source data from lots of companies like Time, Dow Jones, New York Times, Reddit. Now they're all making good, doing agreements with all of us saying, we're sorry and paying for it. And they took that data, they normalized it, they delivered a comprehensive data set that they train their model on. And all of us understand that that's what they did, right? They have the great UI, they have this amazing model and then they have the data. And then we've seen a lot of fast followers with the models, it could be open source models like Lama 3. It could be some proprietary models like Gemini from Google and others. Now there's thousands and thousands of these models. And if you look on Hugging Face, everybody is a fast follower and six months later, everybody is where everybody else was six months ago. And the data, well, a lot of these companies are all thinking they can rip off all this data to and they're all having to pay that price. Okay, that's the consumer world. The enterprise world is a little different, right? We have great user interfaces, great apps, all kinds of great technology that our users are using, the millions and millions of users, than we have the same models in many cases or maybe we've written some of our own models with our engineers. But then the third piece is the data. And that data is a little bit different. Because in the enterprise, how do you put together these large, fully normalized data sets to deliver this incredible capability, and that is where the magic is going to be. |
2,013 | CRM | 1 | 2,025 | 2024-05-29 17:00:00 | Salesforce, Inc. | 122,917 | these large, fully normalized data sets to deliver this incredible capability, and that is where the magic is going to be. Because for all companies, including ours and others who want to deploy generative AI internally, it's not going to be Times Magazine that's going to give you the intelligence, it's going to be our customer data and your transaction history and how you're -- how your company operates in your workflow and your metadata. And that idea that we can deliver another level of productivity for companies using that architecture is absolutely in front of us. But that idea that we have to do it with the right architecture that also is in front of us. And I think that while we can say it's a different kind of architecture, it's still the same idea that we need a great UI, we need models, but we're going to need very highly normalized and federated data. And that data needs to be stored somewhere and it needs to come from somewhere. And it's going to -- that is going to be something that's going to continue in perpetuity over time as these models and UIs are quite fungible. And we'll be using different models and different UIs over the years, but we'll be using the same data sources. And I think that is why when I look at what Salesforce is doing, this is going to be critical for our customers. Now you may see great new UIs like agents and you may see great new UIs like you see what we've deployed with Slack. Brian was talking about how he's changed how we use Slack with our new Slack AI or what we've done with SFA this quarter or service this quarter with the incredible new generative capabilities. But this idea that the data is going to be more important for companies than ever, having deeply normalized federated data sources. And when I look at the success we've had with so many of these companies, I mentioned State Farm, briefly, we've become their fundamental data architecture, that is not where we were with that company even four years ago. Now they look at us as the fundamental framework for their |
2,014 | CRM | 1 | 2,025 | 2024-05-29 17:00:00 | Salesforce, Inc. | 122,917 | that is not where we were with that company even four years ago. Now they look at us as the fundamental framework for their future. And as they want to deploy agents or as they want to deploy new user interfaces or achieve more productivity, the data that they have in Salesforce and the ability to manage and share, keep that data reliable, available and scalable, the way that we do updates that we don't bring down our system, do an upgrade and an update like a lot of vendors still do, those kind of capabilities, that will be more important than ever. And I think that, that is going to be a huge driver for our growth going forward and provide the foundation for this future and what the future of the enterprise is going to look like. And I think it's a little bit different than in the consumer model. |
2,015 | CRM | 1 | 2,025 | 2024-05-29 17:00:00 | Salesforce, Inc. | 122,917 | Operator: Your final question comes from the line of Mark Murphy from JPMorgan.
Mark Murphy: Marc, you mentioned that there's a transformation of how we interact with software that's happening. And I'm curious, if you sense any temporary pause as customers may be trying to digest the new innovations, the new pricing mechanisms, it includes consumption pricing. And that perhaps there's going to be a pause that refreshes down the road as they'll ultimately gain comfort and start to move forward with the Einstein Copilots and all the other innovations that require a little bit of a different architecture, a different thought process? |
2,016 | CRM | 1 | 2,025 | 2024-05-29 17:00:00 | Salesforce, Inc. | 122,917 | Marc Benioff: Well, I think it's a very key question, which is Salesforce is managing many different kinds of pricing models, obviously, like our Data Cloud is a consumption product. We've seen a clear path now to over $1 billion in revenue with that product, it uses consumption pricing. We look at our core SFA product, which is a product doing, I don't know, approximately $8 billion a year or Service Cloud doing approximately $8 billion a year. These are per user prices. But when you buy Salesforce now and you're buying our products, you might be buying a new product that we have called UE+. And that's a product that we just introduced a few months ago. Now why is that exciting? Because UE+ is a hybrid pricing model that includes per user pricing and consumption pricing. It delivers for our customers the ability to deploy all the architectures that I articulated on the call today, but to do it in an incredibly competitive price point. And when we look at the very large customers that are deploying Salesforce, standardizing on our platform to deliver this kind of capability for the future as we retrain our sales people to be able to have the narrative that I have on the call today, this idea that we can deliver basically not only the number one AI CRM, not only deliver -- we see these incredible growth in our pipelines, as I mentioned, not only the kind of the next generation price points and products like with UE+, but we have to deliver it with a level of customer success through our partners and the implementations at scale and also with the culture that Salesforce is known for. Those are really the five elements that we are really taking into consideration as we're moving forward. We think that we have the right mix and we're spending a lot of time talking to our customers very, very closely, look at -- don't think that there aren't a lot of people walking into these companies saying, hey, you can do this, you can do that, you can do these other things. We've seen a lot of that in the last six to 12 months, |
2,017 | CRM | 1 | 2,025 | 2024-05-29 17:00:00 | Salesforce, Inc. | 122,917 | hey, you can do this, you can do that, you can do these other things. We've seen a lot of that in the last six to 12 months, and then it turns out that you can't. Hey, I can make this happen, I can make that happen. I can pull a rabbit out of the hat in the enterprise for you by doing this, that and the other thing and then it doesn't actually happen. And then what it turns out is, you got to do a lot of the hard work to make this AI happen, and that starts with building highly normalized, large scale, federated, highly available data sources. And then building on top of that the kind of capabilities to deliver it to our customers. I think a common story is, hey, oh, yes, I am a provider of a data lake or a data capability. And just by going to that, I'm going to be able to provide all your AI. But then it turns out that no one in the enterprise actually uses that product. There is no UI that's commonly access. That's why I'm so excited that Salesforce is Sales Cloud and Service Cloud, and Tableau, and Slack, and all of our amazing products that have these huge numbers of users that use these products every single day in a trusted, scalable way and then connecting that in to this new capability, that's where the magic is going to happen. By the time we get to Dreamforce, and for those of you who maybe were at our Connections Conference or our last World Tour in New York or even in Trailhead DX, we haven't heard gasps in the audience when we demoed the products, I think maybe ever, like some of the new technology is incredible we're able to deliver for our customers. And I think that it's going to be extremely exciting going forward, and it will be delivered with a variety of new business models and pricing models. But at the end of the day, we're going to have to be a trusted partner to these customers delivering this AI at scale. |
2,018 | CRM | 1 | 2,025 | 2024-05-29 17:00:00 | Salesforce, Inc. | 122,917 | Mike Spencer: Great. We want to thank everyone for joining the call today, and we look forward to seeing everyone over the coming weeks.
Operator: This concludes today's conference call. Thank you for your participation. You may now disconnect. |
2,019 | CVX | 4 | 2,024 | 2025-01-31 05:00:00 | Chevron Corporation | 98,506 | Operator: Good morning. My name is Katie and I will be your conference facilitator today. Welcome to Chevron's Fourth Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's remarks, there will be a question and answer session and instructions will be given at that time. [Operator Instructions] As a reminder, this conference call is being recorded. I will now turn the conference call over to the Head of Investor Relations of Chevron Corporation, Mr. Jake Spiering. Please go ahead.
Jake Spiering : Thank you, Katie, and welcome to Chevron's fourth quarter 2024 earnings conference call and webcast. I’m Jake Spiering, Head of Investor Relations. Our Chairman and CEO, Mike Wirth, and CFO, Eimear Bonner, are on the call with me today. We will refer to the slides and prepared remarks that are available on Chevron’s website Before we begin, please be reminded that this presentation contains estimates, projections and other forward-looking statements. A reconciliation of non-GAAP measures can be found in the appendix to this presentation. Please review the cautionary statement and additional information presented on Slide 2. Now, I will turn it over to Mike. |
2,020 | CVX | 4 | 2,024 | 2025-01-31 05:00:00 | Chevron Corporation | 98,506 | Mike Wirth : Thanks, Jake, and thank you everyone for joining us today. Chevron delivered another year of strong results in 2024. We achieved record production both globally and in the United States and reached key milestones that are expected to underpin years of future cash flow. This includes outstanding performance in the Permian, exceeding expectations with production growth of nearly 18% from last year; Delivering key project start-ups in the Gulf of America; Fully integrating PDC Energy, expanding our position in the DJ Basin; Optimizing our portfolio through asset sales and swaps that maximize long-term value; and completing WPMP and achieving first oil at the future growth project at TCO last week. We also returned a record $27 billion in cash to shareholders through dividends and buybacks. Over the past two years, we’ve repurchased $30 billion and reduced our outstanding share count by 10%. We continued to build our new energies business and complete projects to lower the carbon intensity of our operations. In 2024, we sold over 20 million barrels of bio-based diesel and advanced foundational projects in CCUS and hydrogen. We also completed projects designed to abate over 700 thousand tons of CO2 emissions annually. Now, I’ll turn it over to Eimear to go over the financials. |
2,021 | CVX | 4 | 2,024 | 2025-01-31 05:00:00 | Chevron Corporation | 98,506 | Eimear Bonner : Thanks, Mike. Chevron reported fourth quarter earnings of $3.2 billion, or $1.84 per share. Adjusted earnings were $3.6 billion, or $2.06 per share. Included in the quarter were special items totaling $1.1 billion related to restructuring and impairment charges. Foreign currency gains were $720 million. Full-year organic CapEx was aligned with our announced $16 billion budget. Inorganic CapEx of $530 million related mostly to lease acquisitions and new energies investments. We maintained double digit returns with adjusted ROCE of 10.5% for the year. Compared with last quarter, adjusted earnings were $900 million lower. Adjusted upstream earnings were impacted by revisions to asset retirement obligations and timing effects, including year-end inventory valuation. Adjusted Downstream earnings were lower due to softer refining and chemicals margins and timing effects. Chevron’s cash generation continued to position the company for long-term success while rewarding shareholders. In 2024, we Invested capital efficiently, growing production by 7%; Generated nearly $8 billion in proceeds from asset sales; sustained our long track record of dividend increases and repurchased 5% of shares outstanding; and maintained a strong balance sheet, ending the year with a net debt ratio of 10%. Chevron’s long-standing financial priorities have created value for shareholders. They have guided our actions through multiple commodity and investment cycles and will continue to govern how we allocate capital. Over the past five years we have grown our dividend faster than the S&P 500 and nearly double the rate of our closest peer. Today, we announced a 5% increase in the dividend, marking the 38th consecutive year with an annual increase to dividend payment per share. We’re committed to capital discipline. Only the most competitive projects in our portfolio will get funded. Where assets don’t compete for capital, we have a history of generating value commercially. The balance sheet is in excellent health, with net debt |
2,022 | CVX | 4 | 2,024 | 2025-01-31 05:00:00 | Chevron Corporation | 98,506 | for capital, we have a history of generating value commercially. The balance sheet is in excellent health, with net debt below our historical levels. We’ve repurchased shares 17 of the last 21 years and intend to maintain a buyback range of $10 to $20 billion per year depending on market conditions. Compared to our peers, we’re delivering growth with less capital and returning more cash to shareholders. In the past three years, we’ve returned $75 billion in cash to shareholders via dividends and share buybacks. Now, I’ll hand it back over to Mike to cover our near-term outlook. |
2,023 | CVX | 4 | 2,024 | 2025-01-31 05:00:00 | Chevron Corporation | 98,506 | Mike Wirth : Thanks, Eimear. Chevron is in a strong position today, with near-term catalysts that are expected to drive the company to even better performance in 2025 and 2026. Our objective is unchanged, to safely deliver higher returns and lower carbon. In the next two years, we plan to achieve industry leading free cash flow growth; further strengthen our portfolio, including the expected completion of the Hess transaction in the third quarter; advance opportunities in renewable fuels, hydrogen, CCUS and power; while maintaining cost and capital discipline. It's important to note that the guidance provided today exclude tests, we continue to be very confident in assets position in arbitration. We plan to host our next Investor day with the longer term outlook after we close the transaction later this year. Chevron is poised for industry-leading free cash flow growth. We expect to add $10 billion of annual free cash flow in 2026, led by growth and advantaged upstream assets. With additional production from FGP and a further reduction in affiliate CapEx, we expect a sustained increase in distributions from TCO going forward. In the Gulf of America, where we produce some of the highest margin barrels in our portfolio, we'll have additional growth as Anchor and Whale continue to ramp up and we bring Balimore online. And in the Permian, we're focused on operational efficiency and free cash flow, positioning the asset as a core cash generator for the company. We're also executing plans to deliver stronger results across the entire portfolio, including cash savings from our targeted $2 billion to $3 billion reduction in structural costs and improved returns in our Downstream and Chemicals businesses. At TCO, we achieved first oil at FGP last week. This important milestone is the result of consistent, disciplined execution by the project and operations teams. Our focus remains on a safe and reliable ramp-up of the plant. FGP adds 260,000 barrels of oil production capacity to the existing plants. We expect to achieve |
2,024 | CVX | 4 | 2,024 | 2025-01-31 05:00:00 | Chevron Corporation | 98,506 | reliable ramp-up of the plant. FGP adds 260,000 barrels of oil production capacity to the existing plants. We expect to achieve full production rates 1 million barrels of oil equivalent per day – within the next three months. At $70 Brent, expected free cash flow to Chevron is $5 billion in 2025 and $6 billion in 2026. This includes fixed loan repayments and quarterly dividends. We are proud to bring this large, complex project online for the benefit of our shareholders and the Republic of Kazakhstan and look forward to future collaboration to maximize the long-term value of the Tengiz reservoir. In 2024, execution efficiencies led to strong well and base business performance, helping us achieve another record for Permian production. Over the last five years, we’ve delivered compound annual growth of 16% while continuing to capture efficiencies. Through optimized pad and drilling designs, and completions improvements like triple frac, we’re able to achieve these production levels with 40% fewer company-operated rigs than our plans included just a few years ago. We expect production to reach one million barrels of oil equivalent per day in 2025, and plan to moderate growth and CapEx to drive predictable and durable free cash flow generation. Our Permian portfolio delivers superior returns due to royalty advantaged acreage across all of the sub-basins, which add to both the top and bottom-line. We’re continuing to develop and deploy technologies to enhance efficiencies and recoveries. We’re leveraging our strengths in advanced chemicals and stimulation and scaling them across our shale and tight portfolio. Our world-class upstream assets provide further growth opportunities that are poised to deliver value for decades. In the Gulf of America, where we expect to grow production to 300,000 barrels of oil equivalent a day, we achieved first oil at the Anchor and Whale projects, and Ballymore is expected to come online around the middle of this year. In Western Australia, our discovered resource has the ability to |
2,025 | CVX | 4 | 2,024 | 2025-01-31 05:00:00 | Chevron Corporation | 98,506 | is expected to come online around the middle of this year. In Western Australia, our discovered resource has the ability to keep our LNG plants full for decades. Last month, we announced an asset swap that will increase our equity in Wheatstone, which enables long-term asset development and monetization. In West Africa, we have a queue of low-cost developments that are expected to sustain production for many years. We recently extended leases in Nigeria and had a shelf discovery that will tie back to existing infrastructure. In Angola, we achieved first gas at the Sanha Lean Gas Connection project, and we plan to bring online our South N’dola development later this year. In the Eastern Mediterranean, we have a significant resource position we’re continuing to unlock. Expansion projects at Leviathan and Tamar are expected to come online through the end of the decade. Turning to our Downstream and Chemicals businesses, we’re focused on operating reliably and efficiently while executing competitive projects that extend our value chains and capture market synergies. The recently completed expansion at our Pasadena refinery enhances our integrated value chain by running more Permian crude, supplying more products to our regional marketing business and expanding synergies with the Pascagoula refinery. Our petrochemical growth projects in the U.S. and Qatar are more than 50% complete and are expected to contribute to further cash flow growth beyond 2026. Both projects are feedstock advantaged, have competitive cost structures and are well-positioned to serve growing demand. We have several projects in our New Energies business that are expected to achieve key milestones in the next two years. In renewable fuels, we’re in final commissioning of the Geismar renewable diesel expansion and at our Bunge joint venture, construction continues at the new oilseed processing plant in Louisiana, increasing our exposure across the renewable fuels value chain. We’re working towards start-up of the ACES green hydrogen project in |
2,026 | CVX | 4 | 2,024 | 2025-01-31 05:00:00 | Chevron Corporation | 98,506 | our exposure across the renewable fuels value chain. We’re working towards start-up of the ACES green hydrogen project in Utah later this year, which will produce hydrogen from water and excess renewable power and store it underground for dispatchable lower carbon power generation. The project is one of the world’s largest hydrogen storage projects and will have over 200 megawatts of electrolyzer capacity. In carbon capture and storage, Bayou Bend is working towards a FEED decision for the offshore project, and we’re also developing plans to capture and store CO2 from our Pascagoula refinery. Earlier this week we announced plans to jointly develop scalable, reliable power solutions to support growing energy demand from U.S. data centers. Chevron is positioned to participate in this growth and generate competitive returns through integration with our U.S. natural gas business; Experience in building and operating nearly five gigawatts of reliable, behind-themeter power; and Expertise in technologies that can help provide a pathway to reduce GHG emissions. We've secured slot reservations to purchase seven natural gas fired turbines from GE Vernova with deliveries beginning late 2026, and we’re advancing site selection and engineering work while engaging customers. We look forward to sharing more as our plans develop. I’ll hand it back to Eimear to close out our guidance for 2025 and 2026. |
2,027 | CVX | 4 | 2,024 | 2025-01-31 05:00:00 | Chevron Corporation | 98,506 | Eimear Bonner : Thanks, Mike. In a cyclical commodity business, capital and cost discipline always matter. Chevron’s CapEx and affiliate capex budgets reflect our commitment to capital efficiency while funding a balanced portfolio of short and long-cycle investments. Organic CapEx is expected to remain within our $14-16 billion guidance range. As spend in the Permian and Gulf of America comes down, capital will flow elsewhere within the portfolio to support continued growth. Affiliate c is expected to trend down further as investments at TCO and CPChem come online. We’re targeting $2 billion to $3 billion in structural cost reductions by the end of 2026. Work is underway to deliver these savings through asset sales; scaling technology solutions, such as expanding the use of robotics; and changing how we work to improve efficiencies. We’re executing our plans to lower absolute costs while delivering growth. Last year, worldwide oil equivalent production was the highest in our history, benefitting from a larger position in the DJ Basin following our acquisition of PDC Energy and nearly 18% growth in the Permian. Excluding asset sales, we expect production to grow around 6% annually through 2026. In 2025, we expect growth to be weighted towards the second half of the year as key projects in Tengiz and the Gulf of America come online and ramp throughout the year. We’re excited about the year ahead. We’re focused on delivering growth across advantaged assets and value chains while reducing absolute costs; starting up profitable New Energies projects and advancing new behind-the-meter power solutions; and continuing to reward our shareholders with higher returns and a differentiated value proposition. I’ll now hand it off to Jake. |
2,028 | CVX | 4 | 2,024 | 2025-01-31 05:00:00 | Chevron Corporation | 98,506 | Jake Spiering : That concludes our prepared remarks. Additional guidance can be found in the appendix to this presentation and the slides and other information posted on chevron.com. We're now ready to take your questions. We ask that you limit yourself to one question. We will do our best to get all of your questions answered. Katie, please open the line.
Operator: Thank you. [Operator Instructions] We'll take our first question from Biraj Borkhataria with RBC.
Biraj Borkhataria : Hi, thanks for taking my question. Firstly, congrats on getting FGP online. I know it’s a big project. So I wanted to ask about sort of underlying cash flow, excluding working capital. This quarter, at least versus our model the $5.3 billion was quite a bit with what we expected. So could you just walk me through how I should think about any one-offs in there? And help me understand what the sort of underlying basis should be as we think about ‘25? Thank you. |
2,029 | CVX | 4 | 2,024 | 2025-01-31 05:00:00 | Chevron Corporation | 98,506 | Eimear Bonner : Hi, Biraj, thanks for the question. You're right. Cash flow, excluding working capital, was impacted by some non-recurring and accounting items this past quarter. So let me step you through the big ones. Maybe the first is we recognized some tax charges and earnings related to our recently completed Canadian asset sale, and that was around $1.5 billion. It's important to note that these tax charges are offset in working capital. But if you exclude the working capital when you're looking at cash flow, you're still going to see that tax charge. So that's a big one. That's the main one. The second one is we also recorded some charges in the quarter that for earnings, we had identified those as special items. We disclosed them back in December and our capital release. However, we don't make the same adjustments for these items and cash flow. So you're seeing some of that flow through to the bottom line, and that's about a $500 million headwind. Beyond those two items, we did have some other impacts, the combination of affiliate distributions, some unique commercial activity, and that's another $500 million. So when you add up the three elements, that's about $2.5 billion to take into consideration for the cash flow this quarter. So if you've got any additional questions on those pieces acknowledging they're a bit unusual this quarter. I mean Jake can follow up with you after the call and sure you how everything flows through. Thanks.
Operator: We'll take our next question from Paul Cheng with Scotiabank. |
2,030 | CVX | 4 | 2,024 | 2025-01-31 05:00:00 | Chevron Corporation | 98,506 | Operator: We'll take our next question from Paul Cheng with Scotiabank.
Paul Cheng : Thank you. When we're looking at your next two years, I think we have a really good outlay and I think investors are comfortable. I think the question has always been talking about longer term, say, by the turn of the decade, I mean what you're going to do if we put half of that aside. And in here, can you talk about your opportunity set you already had the [indiscernible], for example, I believe there's a lot of discovery you guys have made in Nigeria and Angola. But where are we in terms of bringing those that to the solution and having the project coming on stream? What we need in order for that to become a win out there [ph] and how big are those opportunities there? Thank you. |
2,031 | CVX | 4 | 2,024 | 2025-01-31 05:00:00 | Chevron Corporation | 98,506 | Mike Wirth : Okay. Paul, thank you. Yeah, you're right. What we laid out today is a more detailed look ahead for the next two years. And as you rightly note, there's a lot of significant growth. We wanted to provide you more confidence and visibility on that free cash flow growth. And frankly, it continues to be derisked every day here during the month of January with the whale startup and the FGP start-up, are two significant events that really derisk that. And so that was the primary objective is provide transparency and confidence in that. And I will set Hess aside, but I'll just acknowledge that we look forward to closing Hess, which will make a strong hand even stronger. If you look out beyond the end of 2026, there are a number of things that are going to contribute to continued free cash flow growth. We've got two big chemicals projects that are under construction that will come online late '26, early '27 time window. We've got projects in the Eastern Mediterranean in the near term for both Tamar and Leviathan that will come on towards the end of this year and be ramping into '26 and beyond. And then we've got further work underway, particularly at Leviathan for yet another expansion in the Eastern Mediterranean. I would expect Argentina over the back half of this decade to begin to grow at a rate that's stronger than what we've seen thus far. Contingent upon -- continued progress in policy and kind of government stability and macro environment stability there, but the signs there have been encouraging and positive. You mentioned West Africa. There's a number of opportunities. I talked about a discovery on the Nigeria shelf, Saudi Arabian gas, South Angola, We have a number of other very attractive prospects there. We haven't really gone below 10,000 feet to produce yet in that region. We picked up additional acreage offshore Angola, three new blocks that are undergoing seismic work right now. And we haven't talked a lot about West Africa in recent years given some of the other things within our |
2,032 | CVX | 4 | 2,024 | 2025-01-31 05:00:00 | Chevron Corporation | 98,506 | seismic work right now. And we haven't talked a lot about West Africa in recent years given some of the other things within our portfolio, but that has a lot of running room left ahead of us. Venezuelan Partition Zone, huge, huge resource positions. We've been moving thoughtfully for particular reasons in each of those locations, but those present long-term opportunities that are captured and can become very attractive. And we've got a really nice exploration portfolio. In West Africa, South America, the U.S. Gulf, the Eastern Mediterranean that we expect to provide further resource opportunities. We've got technology that can unlock things. And of course, a large low decline base that we can sustain with a very competitive capital investment and good underlying growth rates. So we've seen outsized growth here in recent times, right. Last year's growth 7%. We're guiding to a 6% CAGR on for the next couple of years. That's probably not a growth rate that anyone would expect to continue. But there are plenty of opportunities out there in the 2027 and beyond Q we'll sort through and fund the best of those within a tight disciplined capital budget. Thanks, Paul. |
2,033 | CVX | 4 | 2,024 | 2025-01-31 05:00:00 | Chevron Corporation | 98,506 | Operator: We'll take our next question from Neil Mehta with Goldman Sachs.
Neil Mehta : Yeah, good morning, Mike and team. Just wanted to better understand the power business and the announcement from earlier this week with GE Vernova. Mike, you've talked a lot about power being a tricky business, and Chevron seen that firsthand over the last 30 years at different points. But and wanting to ensure that you're staying true to your core competency. So how do you think about playing in this ecosystem and ensuring that you derisk it so that you can preserve the upside? |
2,034 | CVX | 4 | 2,024 | 2025-01-31 05:00:00 | Chevron Corporation | 98,506 | Mike Wirth : Yeah. So Neil, I would tell you, you should think of this as being aligned with what we've said we were looking to do, which is leverage our strengths to advance lower carbon energy solutions to meet demand growth in the world. We operate nearly 5 gigawatts of reliable and at scale power today at Gorgon, at TCO and refineries. We know how to build and operate large-scale power generation and integrate it to a core customer. We know how to operate these assets very, very well. We've got technical capabilities that are required to do this. In the U.S., we've got a very large natural gas position. And we've been diversifying some of our gas markets with some LNG offtake. And this allows us to backstop power investments for premium customers. We have said we didn't envision ourselves as a merchant power player, and we still don't. Building power to sell into the grid and just generate merchant power is probably not going to deliver returns competitive with our portfolio, but a high reliability at scale offering that's delivered rapidly is something that's in high demand from customers right now. You can see PPAs that have been done for things like recommissioning nuclear facilities that give you some sense of the value that these have for customers. And we've been engaged in discussions with the hyperscalers for a year or more to understand what they're looking for and understand whether or not that's something that we can we can deliver on it. And we think that it really does make good sense for us. We're got 7 of GE Vernova’s largest turbines with reservation slots for delivery beginning in late '26 and then into '27, and would expect to be on the front end of what will be a real surge in power demand in this country. And importantly, the last thing I'll say is I think most of the people on the call are familiar with the challenges that the grid in this country faces right now and ensuring we keep supply of electricity reliable into the economy as it stands today. Doing this off the grid and behind |
2,035 | CVX | 4 | 2,024 | 2025-01-31 05:00:00 | Chevron Corporation | 98,506 | now and ensuring we keep supply of electricity reliable into the economy as it stands today. Doing this off the grid and behind the meter doesn't further tax and already tax distribution infrastructure, and it doesn't put this investment cost into the rate base and drive up costs for consumers as well. So we think this is something that's good for America. American Energy abundance can help ensure AI leadership. It's good for the public. It will create jobs and it will help to keep rates from rising and it's good for the big customers. They're looking for reliable and fast solution to deliver this power and eventually lower carbon options to reduce carbon intensity. Thanks, Neil |
2,036 | CVX | 4 | 2,024 | 2025-01-31 05:00:00 | Chevron Corporation | 98,506 | Operator: We'll take our next question from Doug Leggate with Wolfe Research.
Doug Leggate : Good morning, guys. Thanks for the opportunity to ask, Mike. I did warn Jake I may have a Part A and a Part B, so it's technically one question, but hopefully, you can -- I'll assume he blessed it. So the incremental disclosure on the bridge to 2027 is really, really helpful. But I wonder -- it's never enough, obviously, but I wonder if you could just benchmark against what you gave us in February 2023, I guess, under similar conditions. So what is the incremental 10, including the debt payback? What does that look like in 2027 versus, I guess, what you gave us before? And the Part B is obviously, Tengiz is the big story here. But a couple of days ago, I think the Kazakh government on the wire is actually talking about contract extensions, which is great news for you potentially, but on better terms. So I was just wondering if there was any color you could offer on that?
Mike Wirth : Yeah. So Eimear, why don't you talk about free cash flow for 2027 and then I'll take the concession. |
2,037 | CVX | 4 | 2,024 | 2025-01-31 05:00:00 | Chevron Corporation | 98,506 | Mike Wirth : Yeah. So Eimear, why don't you talk about free cash flow for 2027 and then I'll take the concession.
Eimear Bonner : Yeah. Thanks, Doug. The short answer is it's aligned with the previous guidance. So we're really reaffirming that guidance. Obviously, since then, there's been some puts and takes. On the portfolio side, we've -- out of PDC since our last guidance. We've divested some assets as well, primarily Canada. There's been some price assumptions changed. But we do have growth laid out today out to 2026, and we see growth beyond that. We've got the CP-10 projects that will be online around that time. We'll have some Eastern Med brine feed projects in Tamar and Leviathan that will come after 2026. Mike talked earlier about the Argentina potential there and the power potential. And then in addition to that, we've got the $2 billion to $3 billion of structural cost reductions that are underway. So the short answer is it's aligned. But maybe many of the projects that we talked about a few years ago have also been derisked since then. So we'd expect to provide the 2027 outlook later on the year. |
2,038 | CVX | 4 | 2,024 | 2025-01-31 05:00:00 | Chevron Corporation | 98,506 | Mike Wirth : Okay. Yeah on the concession, Doug, we're still focused on ramping up safely and reliable. This is a really important milestone, and it signals moving to the next phase in the life of that field. And so we're absolutely laser-focused on getting that right. Early performance has been very stable and very encouraging. As we get through the ramp up to see the plant and reservoir performance, we'll then be able to really turn our focus to the future. This is a world-class asset. We've got a long proud history in Kazakhstan and with the TCO partnership and we certainly would like to extend the concession, but it has to work for everyone. It has to work for the Republic. It has to work for our company and our shareholders has to be competitive. These things take time. These are complex contracts, complex negotiations. And we'll keep you posted as that evolves over time. Okay. And that was a clever way to get two completely unrelated questions in, Doug. So if Jake's blessed that, I better have to talk to Jake, about the ground rules in the future. Let's go to the next question.
Operator: We'll go next to Devin McDermott with Morgan Stanley.
Devin McDermott : Hey, good morning. Thanks for taking my question about detailed update today. Mike, I wanted to ask you about policy. There's been in the U.S. now a series of energy-related executive orders over the past week. I was wondering if you could talk through how this might impact some of your oil and gas operations, especially given the large presence you have in the Gulf and then new energy opportunities and we think through the flurry of news flow over the last year. There's also been some headlines in your Venezuela license, if you could address that as part of the response. I'd appreciate it. I know a lot to unpack there, but I would love your thoughts. Thanks.
Mike Wirth : Yes, that is a lot Devin.
Devin McDermott : Following up with [multiple speakers]. |
2,039 | CVX | 4 | 2,024 | 2025-01-31 05:00:00 | Chevron Corporation | 98,506 | Mike Wirth : But they're all related for you. So let me start kind of at the highest level. For years now, I've been calling for a more balanced discussion about energy. We're finally beginning to see it. We're seeing economic prosperity, energy security and environmental protection, all being brought together. And in the past, really the dialogue skewed toward environmental protection and much less toward the others. And I think it's a welcome change to see this reflected. It's a conversation that now recognizes oil and gas are a vital part of the energy mix in this country and in the world, which is a reality that we all need to acknowledge. And it's good to see an administration that is intent on leveraging and encouraging American energy abundance for the benefit of our economy, for the benefit of our security, for the benefit of our allies and intends to do that in a way that also provides environmental protection. So I think it's a more balanced approach. I think it's a welcome approach. And the specifics still remain to play out. Many of these executive orders direct agencies to review things, to look at actions that can be taken. And so actual actions, I think, for the most part, still remain ahead of us, but I would expect them to encourage more access for instance more regular lease sales. There is building bipartisan support for permit reform, which is very necessary, not just for our industry but for many other industries where it's become so difficult to build things here in the United States. And so I think it's a welcome reset and one that our country will benefit from. I can't much more about anything. Venezuela is an issue that has been around for quite some time during the first Trump administration, during the Biden administration. And now again, in the second Trump term, sanctions exist on Venezuela. We're the only U.S. company on the ground there. We're focused on keeping our people safe, ensuring that assets operate in a way that protects the environment and complying with all the laws. We |
2,040 | CVX | 4 | 2,024 | 2025-01-31 05:00:00 | Chevron Corporation | 98,506 | our people safe, ensuring that assets operate in a way that protects the environment and complying with all the laws. We don't set policy. We comply with laws, and we engage with the government to help inform them of the potential impacts of policy choices, and we'll continue to do so. Thanks for the question, Devin. |
2,041 | CVX | 4 | 2,024 | 2025-01-31 05:00:00 | Chevron Corporation | 98,506 | Operator: We'll take our next question from Stephen Richardson with Evercore ISI.
Stephen Richardson: Hi, good morning. Mike, I was wondering if you could talk about the position of the Permian in the portfolio. You've got this 1 million-barrel a day target out there that looks like you're going to hit if you haven't already hit it pretty soon. And I know there was a previous target in the last Analyst Day that was a little higher than that. Can you maybe just talk about the right amount of unconventionals in the portfolio? And do we think about the Permian and the DJ? Do we think about it relative to the total -- is it production? Is it decline curve? How do you think about the right amount of unconventionals for the size of the corporation over the next couple of years? |
2,042 | CVX | 4 | 2,024 | 2025-01-31 05:00:00 | Chevron Corporation | 98,506 | Mike Wirth : Yeah. So let me start. I'm really pleased with our team in the Permian and the performance again in the fourth quarter. We delivered 992,000 barrels a day in the fourth quarter. We were over 1 million barrels a day in December. For the full year, we saw a growth of 18% and really, really strong performance across all aspects of the Permian. And we expect to continue to grow even as we've now passed our peak investments, and we've started to bring capital investment down. We still expect to see a 9% or 10% production growth in 2025. Something a little bit less than that, probably in 2026. And we're headed towards a lower rate of growth. And at some point, you can't grow a position like this infinitely. That was the criticism of the industry last decade is companies only focused on growing, and they never focused on generating free cash flow and returning to shareholders. And that's always been our plan to do just that. So we'll have an asset that will produce something over 1 million barrels a day for many, many years into the future. And as we can maintain that with a lower rate of capital investment than we've required to get to where we are, that really opens up the free cash flow off of that asset. So we are very pleased with that. We've got 400,000 barrels a day, give or take now in the DJ Basin, which is kind of in that plateau phase where we can draw free cash flow off of that. We closed Hess. There's another couple of hundred thousand barrels a day in the Bakken. You bring Argentina in, and now you're talking 1.7 million barrels a day or so. And this year, we produced 3.3 in change. And so it's kind of 50% of the portfolio. And the nice thing about that is that very modest CapEx you can hold that production flat for quite some time and use that as a big cash generator. And so that is the intent. There's always the prospects that we see technology breakthroughs. We're working on improved recoveries that if economic could open a new phase of growth. And I don't want to predict that, but I |
2,043 | CVX | 4 | 2,024 | 2025-01-31 05:00:00 | Chevron Corporation | 98,506 | We're working on improved recoveries that if economic could open a new phase of growth. And I don't want to predict that, but I certainly wouldn't want to rule that out. And so as we continue to get better and better at this and develop technologies to improve recoveries, we can extend the plateau, we could raise plateaus, but this is a highly economic asset that is a core position that will generate production and cash long into the future. And of course, in the Permian, the royalty advantage that we have is kind of icing on top of that cake. And so that's how we think about it. I can't give you a magic formula, a percentage. But it's -- like I said, it's approaching 50% of our overall production, which is a significant piece. Thanks, Steve. |
2,044 | CVX | 4 | 2,024 | 2025-01-31 05:00:00 | Chevron Corporation | 98,506 | Operator: We'll take our next question from Jason Gabelman with TD Cowen.
Jason Gabelman : Hey, thanks for taking my question. I wanted to ask about the TCO distribution, and I appreciate the detail between first half and second half of this year. The $5 billion and $6 billion for '25 and '26, is that similar to the $4 billion and $5 billion respectively that you guided to previously just at a higher price deck? And further to the distribution -- it looks like based on TCO's own filings at their operating expenses from 2022 to 2023 have gone up about $5 a barrel. I'm not sure if that's related to the Russian war or something else, but I wonder if that increase in OpEx is contemplated in your free cash flow guidance for TCO, or if that's something you expect to come back down. Thanks.
Eimear Bonner : Jason, yes, I can talk to that. The free cash flow inflection that's coming with -- which is actually upon us now that the asset has started up. So we shared in the slide, $5 billion for 2025 and $6 billion for 2026. What's contributing there is obviously the production but also the affiliate CapEx is coming down. So with the project completing and the affiliate CapEx is reducing significantly. And so that's resulted in the free cash flow. We also anticipate that as the plant gets [indiscernible] and the safe and reliable start-up completes that they'll be focused as well on operational OpEx and optimizing that, given the new base business of 1 million barrels a day that they will have. So that can move around a little bit during the year. But generally, we have OpEx coming down there, too. So those are two things that are contributing to the free cash flow in addition to the production.
Mike Wirth : Thanks, Jason.
Operator: We'll take our next question from Alastair Syme with Citi.
Alastair Syme : Thanks, Mike. I just wanted to ask about Bolivia. If you've got a good sense of why first exploration well failed and whether you've seen enough to make you want to go again in a different location? Thank you. |
2,045 | CVX | 4 | 2,024 | 2025-01-31 05:00:00 | Chevron Corporation | 98,506 | Mike Wirth : Yeah, Alastair. The first well was the first well. And in exploration, you learn that oftentimes, particularly in a new -- relatively new basin you need a lot of information. And so each well is actually -- while you're targeting hydrocarbons, the real objective is to learn. And failure to learn would be a failure of the well. Failure defined oil and gas happens more often than not. And so we have a very large position on two different blocks in the Orange and the Walvis basins. As people are well aware, others have found some encouraging things on their blocks. And so there's a working petroleum system that exists there. And we're very pleased with the information that we learned. And it does inform future activity, and it helps us understand the geologic history of that part of the basin which is fundamental to understanding how the depositional structures and geology evolved. And we'll use that to inform future activity. We are -- it's not enough, if I heard your question correctly, it's not enough to say we're not interested. It's enough to say we continue to be interested. The other thing I'll just tell you is that the well went down very fast. The cost was much lower than some of the other wells we've seen in that area. And so I think the other encouraging thing that we learned is that the drilling environment there is one that we can execute very well in and keep future exploration wells in a very cost-effective manner. So we'll talk to you more as we evaluate the next steps in both of those basins and continue to evolve our program.
Operator: We'll take our next question from Betty Jiang with Barclays.
Mike Wirth : Hi, Betty. |
2,046 | CVX | 4 | 2,024 | 2025-01-31 05:00:00 | Chevron Corporation | 98,506 | Operator: We'll take our next question from Betty Jiang with Barclays.
Mike Wirth : Hi, Betty.
Betty Jiang : Good morning. Thanks for taking my question. I want to go back to the Power venture. I want to ask about how do you think about the capital commitment for Chevron related to that venture. It is really impressive that you were able to secure these high-demand turbine spots. So have all the deposits for them being made and just how much equity capital would you be willing to put into it? Thanks.
Mike Wirth : Yeah. Thank you, Betty. It's still early days, and we're not providing public details on some of the specifics of the joint developments as we move into the next phase of site selection and engineering and the like. We have secured the slot reservations with payments. And those are, again, terms that are confidential. We won't have 100% of this. It will be funded through partners and other investors. And we we'll provide more detail at the time that's appropriate on that. The one thing that I do just want to call out is we haven't changed our CapEx guidance. And so this will be done within the CapEx guidance that we've issued. We intend to develop opportunities that are competitive with other things in our portfolio. And here, you've got the benefit of scale. We've got an early position in the queue. Gas turbine generators are seeing upward price pressure. And so it's better to be early in the queue than later in the queue. And so we'll be focused on capital efficiency here and developing a project that delivers value for customers and delivers value for shareholders. So stay tuned for more details as things evolve later this year.
Operator: We'll take our next question from Ryan Todd with Piper Sandler. |
2,047 | CVX | 4 | 2,024 | 2025-01-31 05:00:00 | Chevron Corporation | 98,506 | Operator: We'll take our next question from Ryan Todd with Piper Sandler.
Ryan Todd : Thanks. Maybe if I could ask one on the Gulf of Mexico, or Gulf of America, or whatever we're calling it now. You've now got two of the three projects online for the 2025 and 2026 time period with Ballymore coming soon. I mean what -- what have you seen in terms of reservoir performance so far? What have you learned in terms from these developments, both on the, I guess, on the subsurface and on the facility side? And how does it inform kind of future potential for you in the basin?
Mike Wirth : Yeah. Thanks, Ryan. The -- the short story is the wells are performing very well. We've got two wells on line at Anchor. We've got a third well that we expect to come online in the second quarter. The fourth and fifth wells, we've got top holes drilled and the top hole section drilled, and we had remaining drilling and completion work ahead of us, a fifth well in early 2026. So we are able to drill and complete in this pressure and temperature regime, which is a new one for the industry. Reservoir performance, frankly, is at or above expectations. And so we're quite encouraged. On Whale, I would refer you to the operator for specifics and let them update you on that. And Ballymore, as I mentioned, online here midyear, and so we'll update you as we see performance out of that. But it's very encouraging. The Gulf of -- we're calling it Gulf of America. It's the -- that's the position of the U.S. government now. And there's a lot of running room out there. We're a large lease holder. There's a lot of acreage that is prospective for tiebacks. There's also acreage that is prospective for greenfield developments. We've brought costs down significantly. We've advanced technology to operate in different pressure regimes. And I think this going to be an important producing basin for our country for many, many years to come. Thanks, Ryan.
Operator: We'll take our next question from John Royall with JPMorgan. |
2,048 | CVX | 4 | 2,024 | 2025-01-31 05:00:00 | Chevron Corporation | 98,506 | Operator: We'll take our next question from John Royall with JPMorgan.
John Royall : Hi, good morning. Thanks for taking my question. So I was wondering if you can just talk about your operations in the Eastern Med today and just an update there. Obviously seen a significant improvement in the political situation in that part of the world, and there are no guarantees that's forever. But as Mike mentioned, you do have some project growth that you're working through there. So maybe just an operational update on how you're feeling about your position there and the risk as you see it today?
Mike Wirth : Yeah. So first of all, we're really pleased to see tensions diminishing in the region and hopefully a lasting piece for the people there. The headline is there's no real change to our plans, John. We expect projects that are in execution at both Tamar and Leviathan to come online by the end of the year or into early 2026. There was a pipelay vessel that was demobilized during kind of the height of the conflict. That vessel will be remobilized here during the first half of this year to complete the work that it had underway. So the next leg of growth after those two projects would be a Leviathan expansion. We're currently in feed for that. It would be a significant growth in production for Leviathan. Still work to be done but that's a project that would come online towards the end of this decade and continue to step up the production on that asset significantly. So despite all the activity we've seen in that region, we'll see production up by 25% over the next two years and something closer to 50% by 2030.
Operator: Thank you. We'll take our next question from Jean Ann Salisbury with Bank of America.
Jean Ann Salisbury : The ramp is basically tracking to your expectations or even exceeding them and when you might have any more to share about potential debottlenecking potential? |
2,049 | CVX | 4 | 2,024 | 2025-01-31 05:00:00 | Chevron Corporation | 98,506 | Mike Wirth : Jean, you came off mute partly into your question, and you're -- I caught the part about ramp and debottlenecking. Were you asking about FGP?
Jean Ann Salisbury : Yes, yes.
Mike Wirth : Okay. Good. Yeah. So look, we're a little bit more than a week into this at this point. And so it's very early days. But I will tell you, the operations have been very stable. This is a big complex process operation with crude stabilization, some fractionation, obviously, the high-pressure sour gas injection and temperatures and pressures that are significant. And so seeing stable operations is very encouraging. We have seen production step up. The well deliverability has been very strong, and we've completed all that work last year, but the field performance has met or exceeded expectations. And we feel good about what we see to this point in terms of stable and reliable operations. We'll step things up gradually to be sure that we maintain that stability and reliability. We still have very significant exclusion zones in place, for instance, to minimize the number of people that are in a plant that is just beginning to operate with the H2S concentrations that we see there. And so it will be methodical and very deliberate in raising the production levels up to full capacity. But early indications, I would say, are all positive. And any things we've encountered are well within the range of what would be normal start-up things that you see in a plant like this. So more to follow. Debottlenecking is probably a question for the future. We're really focused on getting the most we can out of this plant right now. And so we'll update you on that. I'm certainly on the next quarter call, we'll have a lot to say about performance at FGP.
Operator: We'll take our next question from Lucas Hermann with BNP Paribas. |
2,050 | CVX | 4 | 2,024 | 2025-01-31 05:00:00 | Chevron Corporation | 98,506 | Operator: We'll take our next question from Lucas Hermann with BNP Paribas.
Lucas Herrmann : Thanks, Mike. Thanks for the opportunity. Really just a point of clarification, Mike. You talked about the transaction with Wheatstone, or around Wheatstone with Woodside. You mentioned that -- you talked about better positioned to monetize. When you talk monetize, do you mean monetize the resource that you have? Or do you also imply monetize the facility I look to take capital out of it in some way with a potential insurance pension fund? And if I might just ask one other question. In essence, when you talk about returns on the power business, do you think about returns volatility adjusted or naked, for want of a better phrase? Thanks very much. |
2,051 | CVX | 4 | 2,024 | 2025-01-31 05:00:00 | Chevron Corporation | 98,506 | Mike Wirth : Yeah. Thanks, Lucas. Look, on Wheatstone, we're really talking about monetizing resource over time. And we're going to acquire not only Woodside's interest in the Wheatstone project, but also in Julimar-Brunello and we'll hand over to them our interest in Northwest shelf and some other smaller related things. We've got high expectations for the Carnarvon Basin for many decades to come. We've had a strong exploration track record out there. We've got a tremendous amount of resource and optimizing that resource through both Wheatstone and Gorgon in a way that's economic, that keeps the plants full, that's good for Australia, good for customers, is important, and this gives us more control over that and a bigger stake in that. And so that's really the primary driver. We're not contemplating bringing in a pension fund or anything like that to sell down our position there. The second question or the second part of your question was about returns in power, yeah. Yeah, look, we have a volatility in our oil and gas business. We have a volatile refining and marketing business. We would look to have put in place PPAs that work for customers and work for us. And as a large natural gas producer we obviously have natural gas supply. We've got natural gas commercial capability across the value chain. And so we can use that to help manage exposure and volatility for our investment potentially for customers if that's what they're looking for. But it's very similar to how we encounter volatility in other aspects of our business, and we'll look at it in a way that is consistent with how we look at other things that have associated volatility. Thanks, Lucas.
Operator: We'll go next to Josh Silverstein with UBS. |
2,052 | CVX | 4 | 2,024 | 2025-01-31 05:00:00 | Chevron Corporation | 98,506 | Operator: We'll go next to Josh Silverstein with UBS.
Joshua Silverstein : Hi, good morning, guys. Maybe switching to the refining and chems business. We're clearly in a weak price environment and margin environment right now. Other than maybe improving the product slate and doing some cost reductions, are there things that you guys do characteristically to improve your leverage to the recovery? Maybe bring forward some projects or turnaround to fire some other assets that might be initially challenged? Anything like that? Thanks. |
2,053 | CVX | 4 | 2,024 | 2025-01-31 05:00:00 | Chevron Corporation | 98,506 | Mike Wirth : Yeah. Having spent a good part of my career in that business, margin pressure is a familiar friend, I guess, I would say. And it does spark innovation and there's nothing like feeling kind of the sharp end of the stick to make people continue to find ways to find a little more flexibility in your feedstocks, improve your operating reliability, your cost structure. Make sure you've got all the right handles for product optimization into the market via different products via different channels to go to market and customer relationships and the like. And so I think we'll be looking to do all of those things, but we should be looking to do all those things when margins are good. And we certainly are looking to do those when margins are difficult. I would point to the fact that we're now increased capacity to run light oil at our Pasadena refinery. This is a good example of that. So we can integrate some of our upstream production that we may get a better netback on it versus exports, for instance. Will produce products that can move out into our marketing channels where we might otherwise be reliant on others to supply some of our market needs. And we can integrate intermediates with the Pascagoula refinery. We can optimize during turnarounds and storms and other market conditions by thinking of those two as a system. And so we'll continue to look for opportunities like that, which are capital efficient ways to increase your flexibility and ability to control your own margin outcomes in the downstream.
Operator: We'll take our next question from Paul Sankey with Sankey Research.
Paul Sankey : Hi, Mike, thanks everyone.
Mike Wirth : Nice to hear you back on the call, Paul. |
2,054 | CVX | 4 | 2,024 | 2025-01-31 05:00:00 | Chevron Corporation | 98,506 | Paul Sankey : Hi, Mike, thanks everyone.
Mike Wirth : Nice to hear you back on the call, Paul.
Paul Sankey : It's a pleasure to be back, Mike. I had a very quick one just about potential corporate actions. But the big idea was I was looking at your CapEx and that 14% to 16% range. I was just wondering what the chances are if you getting towards the lower end of that range because it strikes me that you could differentiate yourselves with lowering CapEx and falling CapEx over the coming years. And further to that, I was wondering, do you think there is potential, for example, for you to cut upstream CapEx once test is completed, how would that work out? Secondly, the volatility of your results. I was wondering, you underinvested in refining. Do you think that's been an issue? And then the wildcard was the potential for mega deals, the exact opposite under Trump and whether or not it might be an idea to go really big as opposed to continuing to sort of try and shrink. And then the final element of the CapEx question was if you're doing this AI gas-fired power, does it -- did you cut back -- what are the areas that you're cutting back CapEx that presumably are now less attractive under the Trump guidance such as it is? |
2,055 | CVX | 4 | 2,024 | 2025-01-31 05:00:00 | Chevron Corporation | 98,506 | Mike Wirth : All right. Well, you have clearly pipped Doug Leggett in terms of getting the most questions into one. So making up for some lost time, Paul. Okay. So let me tick through those quickly. 14 to 16 as the range. Last year, we were at the top end of the range. This year, we're at the middle end of the range. Could we be at the low end of the range? We could. And we'll make that call based on the opportunity set, the competitiveness of those, our view on the market outlook. The real message here is, I think you can depend on us to remain very disciplined, and we're getting more for every dollar we're spending. I mentioned earlier, the Permian is growing with 40% fewer rigs and our plans contain just a few years ago. We're growing at a 7% rate last year, 6% CAGR over the next couple of years. The infamous porcupine charts show that at the time we were spending a lot more capital, we weren't delivering that kind of growth. So we become more capital efficient. And we have to continue to look for ways to deliver energy at lower and lower capital investments. Are we underweight in refining? We've always been more skewed to the upstream. If there are -- if the right opportunity were to come along in downstream or in chemicals, you'd always look at it. In those segments, one of the ways you derisk your position is by not overpaying. And so we're always attuned to opportunities out there. It would have to fit our criteria, which really are assets that have scale, flexibility can operate very efficiently would integrate into good market positions. So there's a set of criteria that we would apply to that. I'm not going to speculate on mega deals, whatever that means. And then look, the AI investment is -- the power for AI is going to fit into the portfolio like other things. The CapEx on that is manageable for sure. And it's spread out over time. It's not 100% equity on our part. And it'll have to deliver competitive returns. And so will it displace something? Will it cause something else to maybe be pushed out in |
2,056 | CVX | 4 | 2,024 | 2025-01-31 05:00:00 | Chevron Corporation | 98,506 | have to deliver competitive returns. And so will it displace something? Will it cause something else to maybe be pushed out in time? How we prioritize those things as a part of running our business each and every day. And so we've got a queue of investments that we're constantly working on. We should not fund all of them. We should only fund the best of them. And this will go into that same process and be optimized within the overall set of investments that we're advancing. |
2,057 | CVX | 4 | 2,024 | 2025-01-31 05:00:00 | Chevron Corporation | 98,506 | Operator: Thank you. We'll take our next question from Nitin Kumar with Mizuho.
Nitin Kumar : Good morning, everyone. And thanks, Mike for taking my question. Congrats on starting TCO. I just want to touch on the cost -- structural cost reductions you've talked about. Could you break that $2 billion to $3 billion between your upstream and downstream a little bit? You were talking earlier about the margin pressure in downstream. And then as I look at Slide 10 and the trajectory of those savings, it seems like you're a little bit weighted towards 2025. So are they more related to asset sales? Or are there other things kind of in the remaining businesses that are helping? |
2,058 | CVX | 4 | 2,024 | 2025-01-31 05:00:00 | Chevron Corporation | 98,506 | Eimear Bonner : Yeah. Nitin, I'll take this one. Yeah, the $2 billion to $3 billion structural cost reductions, you'll see them across all segments. So let me kind of break down and the focus areas for you a little bit. The first focus areas around asset sales. So you're right, we'd expect to see some reductions this year given the asset sales last year in Canada, for example. So we will see some of those portfolio impacts in 2025. And the second focus area that we have looks at kind of changing how we work. So we're looking at standardizing work that we do and then thinking differently about where we do that work. And that will impact the downstream segment that will impact the upstream segment. So we're looking across all the businesses. I mean an example there would be how we design Whales for certain asset classes. Is there a way to do that more in a more standardized fashion and a more centralized fashion? So that's the second focus area and work is underway on that. So I think you should expect to see savings come through '25 and '26. And then the last one, maybe the one that I'm very excited about is the technology focus area. So this is where we're looking at using technology to do work completely differently. So we mentioned in the presentation, the robotics example, but there's a lot -- a long list of examples that we're deploying today, whether that's drones to inspect our facilities, digital twins to plan our turnarounds. AI to look at reducing cycle times for exploration subsurface work. The technology focus area will also deliver savings. So in terms of the profile, 2025, between $1.5 billion to $2 billion. And then '26, you should see the $2 billion to $3 billion come off then. So in total, $2 billion to $3 billion structural costs of the 2024 base.
Operator: We'll take our next question from Bob Brackett with Bernstein Research. |
2,059 | CVX | 4 | 2,024 | 2025-01-31 05:00:00 | Chevron Corporation | 98,506 | Operator: We'll take our next question from Bob Brackett with Bernstein Research.
Bob Brackett : Good morning, guys. Question about the Permian. Clearly, you've laid out a disciplined model there to release cash flow, but you're uniquely positioned in that you have JV partners plus the royalty interest. You probably have the best view of the landscape. What are you seeing there in terms of discipline from the other operators? And is it a trend that's going to continue?
Mike Wirth : Yeah, Bob, it's interesting. Because of our large mineral rights position, we not only get the financial advantage that accrues through that, but we also get the information advantage. We have a position in one out of every five wells in the Permian. And so we see a lot -- we see a lot from our NOJV partners, and most of that activity is really through five good companies, companies that you all know and cover. And so you've got visibility into what they're doing via what they say we do from seeing AFEs for funding and the like. And I would say people are sticking with their plans. And I think everybody has seen the kinds of things we are, which is productivity and efficiency gains and continuing to look for innovation and lateral length and completion techniques and proppant loading and proppant to water ratios and all the rest of it. And I don't see anybody that is kind of heading back to what the industry was doing a decade ago, which is kind of throwing all the cash right back into growth and stepping away from what they've now established, which is a more balanced return-oriented strategy. And so I can't speak for others. You'll have to ask that question specifically to other companies. But at least what I see would be a continuation of what we have been seeing is the way I would describe it.
Operator: We'll take our next question from Neal Dingmann with Truist. |
2,060 | CVX | 4 | 2,024 | 2025-01-31 05:00:00 | Chevron Corporation | 98,506 | Operator: We'll take our next question from Neal Dingmann with Truist.
Neal Dingmann : Hi, Mike. Thanks for letting me in guys. My question really, Mike, is just on the downstream segment. It's a little bit weak last quarter sequentially and year-over-year. And I'm just wondering, was that more driven by -- I know you had more turnarounds that you talked about having about 25% less of those this year? Or is it just continue to see more, I'd call it, macro pressures there?
Mike Wirth : It was a weak fourth quarter. There's no doubt about it. Margins were off. There was some turnaround effects. We also had some significant inventory accounting effects that rolled through the downstream segment and some of the impairments that we took charges for hit downstream on a proportional basis, you see the much more than you would see anything in the upstream. And so I'm not going to call it the perfect storm, but it was a quarter where there were a lot of things that all went in one direction, and it was a negative direction. And so can't affect margins. We can certainly affect turnarounds you've already seen that next year is a lighter turnaround schedule. The impairments or one-off charges and the inventory accounting is a function of LIFO layers and prices and inventory levels is a complex equation. So I wouldn't assume there's anything structurally in that business that says it's deteriorating. But you have these quarters every now and again in that business.
Operator: We will take our last question from Geoff Jay with Daniel Energy Partners.
Geoff Jay : Hi. Mike, I was just kind of curious about Argentina. I mean, clearly, with Malayan office, it seems like a much friendlier place to do business. You mentioned it earlier. How do you see the politics and the opportunity set changing down there? |
2,061 | CVX | 4 | 2,024 | 2025-01-31 05:00:00 | Chevron Corporation | 98,506 | Mike Wirth : Yeah. Thanks for asking. It's an area that I am encouraged by. We've got a very strong position in the Vaca Muerta both in Loma Campana in the South and El Trapial in the North. The geology works very well. We're very pleased with what we've seen, and we've had a, I would say a moderate pace of activity. More history down in the South at Loma Campana, but encouraging over the last couple of years at El Trapial in the north. I'm also really pleased to see the situation of the country improving. We've seen inflation come down significantly. The banking system has stabilized. There's progress towards reducing and removing capital controls, President Milei is a reformer. And he's got a serious agenda that would make the country more investable for foreign investors. And we're very encouraged by what he says, and we're encouraged by what he's done thus far. I think there's more to come. And certainly, he's made great progress thus far. So we are hopeful that he'll continue to do so and that we will see an environment that increases our confidence in putting more capital to work there. So we're engaged on the ground. And right now, we're taking a look at a midstream opportunity on pipeline that could help us with exports to a good deepwater export terminal. So we'll continue to update you on developments there. But you're right. And we've seen encouraging signs, I guess, in Argentina in years gone by, and then things kind of move the other direction. So we'll be watching to see if this seems to be a more durable set of reforms and that would certainly be an important signpost for us. Thanks for the question, Geoff.
Jake Spiering : I would like to thank everyone for your time today. We appreciate your interest in Chevron and your participation on today's call. Please stay safe and healthy. Katie, back to you.
Operator: This concludes Chevron's fourth quarter 2024 earnings conference call. You may now disconnect. |
2,062 | CVX | 3 | 2,024 | 2024-11-01 11:00:00 | Chevron Corporation | 98,506 | Operator: Please standby. Good morning. My name is Justin, and I will be your conference facilitator today. Welcome to Chevron's Third Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' remarks, there will be a question and answer session, and instructions will be given at that time. If anyone should require assistance during the conference call, please press star and then zero on your touch-tone telephone. As a reminder, this conference call is being recorded. I will now turn the conference call over to the Head of Investor Relations of Chevron Corporation, Mr. Jake Spiering. Please go ahead.
Jake Spiering: Thank you, Justin. I am Jake Spiering, Head of Investor Relations. Chairman and CEO, Mike Wirth, and CFO, Eimear Bonner, are on the call with me today. We will refer to the slides and prepared remarks that are available on Chevron's website. Before we begin, please be reminded that this presentation contains estimates, projections, and other forward-looking statements. A reconciliation of non-GAAP measures can be found in the appendix to this presentation. Please review the cautionary statement on slide two. Now I will turn it over to Mike. |
2,063 | CVX | 3 | 2,024 | 2024-11-01 11:00:00 | Chevron Corporation | 98,506 | Michael Wirth: Alright. Thanks, Jake. This quarter, Chevron delivered strong financial and operational results, returned record cash to shareholders, and achieved project milestones that are expected to deliver production and cash flow growth over the coming years. We continue to see strong performance in the Permian, executed major turnarounds at TCO and Gorgon ahead of schedule. Worldwide production increased by 7% from the prior year and set a third-quarter record. We started up the high-pressure anchor project and began water injection to boost production at the Jack Saint Melo and Tahedi fields. These projects, combined with additional project startups through 2025, are expected to grow Gulf of Mexico production to 300,000 barrels per day by 2026. We have expanded our CO2 storage portfolio, adding over two million acres offshore Western Australia. In September, the FTC completed its review of the company's merger with Hess. We also recently announced several asset sales as part of our ongoing portfolio optimization efforts. This quarter marked the one-year anniversary of the PDC Energia Position. We have successfully combined the two companies, taking best practices from both and applying them across our shale and tight portfolio. We have exceeded our guidance of $500 million in combined capital and cost synergies by more than 30% and have delivered more than $1 billion in incremental free cash flow since acquiring PDC. Jurn's well performance is 40% better than the DJ Basin average, and we continue to optimize development plans. We have advantaged inventory, with around 75% of locations at a breakeven below $50 per barrel. We expect to hold production at a plateau around 400,000 barrels of oil equivalent per day through the end of the decade. Our operations in Colorado are among the lowest carbon intensity in the industry, benefiting from tankless production facilities that lower greenhouse gas emissions by 90% compared to older designs. Where possible, we utilize grid-powered rigs that reduce more than |
2,064 | CVX | 3 | 2,024 | 2024-11-01 11:00:00 | Chevron Corporation | 98,506 | greenhouse gas emissions by 90% compared to older designs. Where possible, we utilize grid-powered rigs that reduce more than 60% of our on-site greenhouse gas emissions from drilling. At TCO, the team continues to deliver consistent progress on project milestones. All four Pressure Boost facilities are now online and operating with high reliability. All production is flowing through these facilities, which allows optimization of existing plants and enabled the highest daily production in the field's 31 years of service. Remaining metering stations are all under conversion, and we are confident in the incremental well capacity that will feed FGP. We have initiated final leak testing for the wet sour gas compressors and are preparing the crude processing systems for operation. Complex commissioning activities will continue over the coming months, leading into initial startup activities in the first quarter of 2025. We continue to divest non-core positions at significant value. We have announced asset sales in Canada, Alaska, and Congo, which will contribute before-tax proceeds of approximately $8 billion pending regulatory approvals. We expect to close these transactions in the fourth quarter. In Canada, we received a compelling offer for our Kaybob Duvernay shale position and non-operated interest in the Athabasca Oil Sands project. Both are good assets, and we have a long history there, but they are a better fit for a reputable counterparty and an attractive deal value for Chevron. Now, I will turn it over to Eimear to discuss the financials. |
2,065 | CVX | 3 | 2,024 | 2024-11-01 11:00:00 | Chevron Corporation | 98,506 | Eimear Bonner: Thanks, Mike. We reported third-quarter earnings of $4.5 billion or $2.48 per share. Adjusted earnings were $4.5 billion or $2.51 per share. Organic CapEx was $4 billion for the quarter, in line with our budget. Our balance sheet remains one of the strongest in the industry, ending the quarter with a net debt ratio under 12%. Cash flow in the third quarter was the highest for the year despite lower oil prices. Working capital decreased by $1.4 billion on lower inventory levels. Share repurchases were a record $4.7 billion at the top end of our quarterly guidance range. Our financial priorities are unchanged, and we plan to use our strong balance sheet towards shareholders consistently through commodity cycles. Compared with last quarter, adjusted earnings were down about $150 million. Adjusted upstream earnings were down mainly due to lower realization and high dividend at TCO, partly offset by higher lifting. Adjusted downstream earnings increased primarily due to favorable timing effects and higher US volumes. This was partially offset by lower US refining margins. Adjusted third-quarter earnings were down $1.2 billion versus the same quarter last year. Adjusted upstream earnings were flat. Lower liquids realizations and higher DD&A were mostly offset by higher liftings and timing effects. Adjusted downstream earnings decreased mainly due to lower refining margins. All other was down primarily due to interest expense. Third-quarter oil equivalent production was up around 75,000 barrels per day from last quarter. Strong production in the Permian, primarily in our company-operated New Mexico assets, was the main driver. We expect full-year average production growth to finish at the top end of our guidance range of 4% to 7%. Costs always matter in a commodity business. We have a track record of managing unit costs well below inflation while successfully integrating several acquisitions. Higher returns require competitive costs and safe and reliable operations. Executing turnarounds on budget and on |
2,066 | CVX | 3 | 2,024 | 2024-11-01 11:00:00 | Chevron Corporation | 98,506 | acquisitions. Higher returns require competitive costs and safe and reliable operations. Executing turnarounds on budget and on schedule is a key performance driver, and we have delivered outstanding performance in 2024. Our teams have collaborated across upstream and downstream to standardize the approach to these complex maintenance events, increasing the days our facilities are online and lowering unit costs. While we anticipate significant volume growth in the years ahead, we also expect to deliver $2 to $3 billion in structural cost reductions by the end of 2026. These cost savings will largely come from optimizing the portfolio, leveraging technology to enhance productivity, and changing how and where work is performed, including the expanded use of global capability centers. Now looking ahead, in the fourth quarter, Upstream will have downtime, which is expected to be split between US and international operations. Impacts to production from divestments are expected to be around 45,000 barrels of oil equivalent per day for the quarter. Downstream, we will have higher planned maintenance primarily at El Segundo and Pasadena. We will also have a shutdown at the Pasadena refinery, enabling the light tight oil expansion to come online. We anticipate affiliate dividends to be around $1 billion this quarter. Share repurchases are expected to be between $4 and $4.75 billion in the fourth quarter, unchanged from prior guidance. Proceeds from asset sales are expected to be about $8 billion before taxes. Back to you, Jake. |
2,067 | CVX | 3 | 2,024 | 2024-11-01 11:00:00 | Chevron Corporation | 98,506 | Jake Spiering: That concludes our prepared remarks. We are now ready to take your questions. We ask that you limit yourself to one question. We will do our best to get all of your questions answered. Justin, please open the lines.
Operator: Thank you. If you have a question at this time, please press star one on your touch-tone telephone. To allow for questions from more participants, we ask that you limit yourself to one question. If your question has been answered or you wish to remove yourself from the queue, please press star two. If you are listening on a speakerphone, we ask you to please lift your handset before asking your question to provide optimum sound quality. Again, if you have a question, please press star one on your touch-tone telephone. And our first question will come from Jean Ann Salisbury with Bank of America.
Jean Ann Salisbury: Hi. Good morning. The main feedback I have heard from investors hesitant on Chevron is wanting resolution on TCO startup and test. At what point should investors consider TCO startup largely derisked? Is there, like, a specific milestone in the commissioning and startup process, like where you have listed here, where you say, okay, startup probably really cannot slip much from here, and are we there now? |
2,068 | CVX | 3 | 2,024 | 2024-11-01 11:00:00 | Chevron Corporation | 98,506 | Michael Wirth: Yeah. So thanks for the question. You know, we are making great progress, and I think you saw that again this quarter as we have had several quarters now where we have laid out expected milestones and delivered on them. So the team is delivering predictable commissioning and startup activity, and I ran through some of the current state relative to low-pressure production, strongest day of production ever, etcetera. That said, there is still significant complex commissioning work ahead, particularly on the future growth project. That work is well underway here, and we expect, as we said, to begin startup procedures in the first quarter. So our cost and schedule guidance is unchanged. You know, one of the key things for us, and this is a learning from other projects over the years, is to ensure reliability. We want to make sure that we have everything ready to start up safely and then run reliably as we go forward. And so we are going to continue to be very methodical in the way we go about starting up the equipment there. But every quarter that passes, it is being derisked. I do not know that there is a magic threshold you can say it is entirely derisked, but everything we see is very positive. In fact, Eimear was there just recently along with Mark Nelson. Maybe, Eimear, you can share some of the things you saw at TCO. |
2,069 | CVX | 3 | 2,024 | 2024-11-01 11:00:00 | Chevron Corporation | 98,506 | Eimear Bonner: Yeah. Thanks, Mike. And, yeah, it was great to be back and to be with Mark and Jake and the team in Tengiz. When we were there, they actually achieved a key milestone the day we arrived in Tengiz, and that was when they fully transitioned to feeding all of the existing six production trains with low-pressure production fed through the pressure boost facility. So I think the fact that the production was at high levels producing through the pressure boost facility just shows the high reliability that has been achieved there. We also visited three sites at Tengiz, Jean Ann. The first one was the operations and control center, and there, we saw how they are leveraging the advanced process control technology, digital tools to really optimize production, keep the plants full, and plan work safely. So that was great to see that to be part of the project, and it is really enabling a whole new level of optimization. We went to the sites that Mike talked about where the complex commissioning is ongoing. So the third generation site, there is a large, high number of equipment that is being commissioned there. So we talked to the team about the high diligence they are being to ensure that we do the performance testing on the equipment, we commission the equipment, and we do that in a very methodical way. So that was great to see. We also went to the third generation injection facility. And with the design that we have, we will be injecting all of the produced gas into the reservoir to help with pressure management. And they were doing injection testing when we were there. So that is a key bit of derisking to know that the wells will take the sour gas into the back end of the reservoir. So overall, it was a great visit. You know, we came away really encouraged by the work of the team, by the consistent progress that is being achieved, but also by the just the rigorous planning and thought that is going into ensuring a safe and reliable startup and ramp-up over the first half of 2025. Thanks for the question, |
2,070 | CVX | 3 | 2,024 | 2024-11-01 11:00:00 | Chevron Corporation | 98,506 | that is going into ensuring a safe and reliable startup and ramp-up over the first half of 2025. Thanks for the question, Jean Ann. |
2,071 | CVX | 3 | 2,024 | 2024-11-01 11:00:00 | Chevron Corporation | 98,506 | Operator: And our next question will come from Neil Mehta with Goldman Sachs.
Neil Mehta: Yeah. Good morning, Mike and team. I just want to spend some time on the Permian. You had indicated in the prepared remarks that you expect to finish towards the top end of the 4% to 7% range in guidance. And you highlighted strength in company-operated New Mexico. Can you spend a little bit more time unpacking that, the sustainability of that, and just how should we think about the path to ultimately getting to plateau at this asset? |
2,072 | CVX | 3 | 2,024 | 2024-11-01 11:00:00 | Chevron Corporation | 98,506 | Michael Wirth: Yeah. Neil, we did have a nice strong quarter again in the Permian. I realize a lot of our activity now being in New Mexico, the data is not quite as timely and transparent maybe as on the Texas side. And so you may not see that, but a couple of things. Number one, our new well performance has been very, very strong in the Delaware Basin. We have got a lot of that in the third quarter, particularly, we are in the second Bone Spring. And seeing top quartile performance out of those wells. Also on the Texas side and the Delaware and the Wolf Camp A, we are outperforming expectations. So new wells and completion of pop time on those new wells have been very, very strong. In the base business, we are seeing stronger reliability performance, proactive maintenance efforts are paying off. We are seeing artificial lift optimization now sustaining strong production. And we are seeing efficiency gains in everything from completions designs, coordination, and logistics to reduce mobilization. We have talked about triple frac before. And so across the entire activity portfolio in the basin, we just continue to see improvement in the execution of that and then improvement in the performance of the wells. As we move towards the, you know, the million barrel a day mark next year, we will begin to shape our profile there a little bit towards a plateau. And we will really begin to focus on free cash flow. And so growth will become less the driver, and free cash flow will become more of the driver, if you will. So we will bring capital spending down, and I think what you will see is this year is probably going to be the peak in Permian CapEx. And as we move forward, we will start to attenuate that. The growth, which has been at a, you know, a 15% CAGR for the last three years, probably going to be higher than this year, will begin to attenuate as well, and we will really open up the free cash flow there. So more to follow. In terms of exactly what that looks like. I am sure people are curious about that. So we will |
2,073 | CVX | 3 | 2,024 | 2024-11-01 11:00:00 | Chevron Corporation | 98,506 | flow there. So more to follow. In terms of exactly what that looks like. I am sure people are curious about that. So we will provide more guidance here, you know, over the next call or two, so you can start to think of what that looks like. But the, you know, the headline here is continued efficiency and productivity gains, strong free cash flow today, and we are going to manage it for even stronger free cash flow in the future. |
2,074 | CVX | 3 | 2,024 | 2024-11-01 11:00:00 | Chevron Corporation | 98,506 | Operator: And the next question will come from Doug Leggett with Wolfe Research.
Doug Leggett: Good morning. Sorry. I had a frog in my throat, Mike. I appreciate the opportunity to ask you a question. You know, if I could observe as a kind of precursor to my question, this is probably your best operating quarter in quite a while, so congrats. The share price is responding accordingly. But if you look at your relative underperformance since you announced the Hess deal, it is clearly a huge, you know, weight of uncertainty on the stock. It basically wiped out the value of Hess. So it is a Hess question. And it goes something like this. You have now got FTC since we last spoke in the last call. You have got the shareholder vote, and you are moving ahead with I guess, what many would think with the post-Hess acquisitions disposals. Synergies presumably are not related to Guyana. Why not go ahead and close the deal if you are so confident in your legal position? |
2,075 | CVX | 3 | 2,024 | 2024-11-01 11:00:00 | Chevron Corporation | 98,506 | Michael Wirth: Well, look, the relative performance of the shares relates to a lot of things. Number one, and so I would not dispute the fact that the Hess uncertainty is a material contributor. But as you said, we have had some performance unevenness that I think we have, you know, ironed out and we need to prove that. But you know, we announced the cost and schedule update to TCO during this period of time. So there have been a number of things that I think are all part of that, all of which are a high priority. And as you see today, we are getting a lot of attention and I think improving. Look, we have got a deal structure with Hess that has a condition precedent that if there is an arbitration, the arbitration has to be concluded. We are confident that it will be successfully concluded, but you know, that is where we set the deal up and we are going to execute the transaction the way the transaction is written and integration planning is going very well. We are working very closely on everything that we can at this point in the process to prepare for the future. And I realize that the timing on this is unfortunate, but we are continuing to move forward and look forward to integrating the two companies and being really the premier oil and gas company prepared for the energy transition. Thanks, Doug.
Operator: And our next question will come from Biraj Borkhataria with RBC. |
2,076 | CVX | 3 | 2,024 | 2024-11-01 11:00:00 | Chevron Corporation | 98,506 | Operator: And our next question will come from Biraj Borkhataria with RBC.
Biraj Borkhataria: Hi there. Thanks for taking my question. I wanted to ask around the Canada sales. So if I go back to the Hess deal, you know, the rationale was to buy, you know, long cycle high-quality resource and obviously diversify your portfolio. And Guyana is very different from Canada, obviously, but could you just talk about the decision to execute that divestment now ahead of the arbitration decision? Which was a surprise, but also more broadly, you know, I would have thought you were a net buyer of long cycle resource. So if you could just talk about how you are thinking about that and how you are thinking about the portfolio, that would be helpful. |
2,077 | CVX | 3 | 2,024 | 2024-11-01 11:00:00 | Chevron Corporation | 98,506 | Michael Wirth: Sure. So, Biraj, we have got a long history in Canada. AOSP has been, you know, a steady contributor of cash for many years. But, you know, we have also indicated that as a 20% non-op position, it was not really viewed as a core asset in the portfolio. So as we were marketing the unconventional position in the Kaybob Duvernay, we were not actually marketing AOSP, but the buyer came to us and proposed buying both. And made us a very attractive offer to buy both. You know, the Duvernay, while it is a good asset, we are struggling to compete against the strength in other parts of our shale and tight portfolio. And AOSP, you know, as we have indicated for some time, is a non-core asset we were willing to consider offers for it, but there was a long time when I think potential buyers were struggling to give us the value that we saw, to your point, for a long-duration asset. The Canadian producers are faring better today. I think their valuations have recovered, and so we were presented with an opportunity to transact at what we thought was good value and we have been patient. Others have left the oil sands over the years at what we felt were discounted values, and we were not prepared to do that. But when we got a value that we thought was a fair value, you know, we were prepared to transact. And, you know, yes, we want to add good quality long-duration assets to the portfolio, but we have a lot of those in our portfolio today. And so I do not think you should read our desire for those kinds of assets to say that anything that would kind of broadly fit under that heading is not eligible for potential divestment. We are going to continue to high-grade our portfolio over time and as we add quality assets and use technology to improve the value of assets in our portfolio, we will always ask ourselves if the balance of the portfolio has more value to others than it does to us and be willing to entertain that kind of a question. Thanks, Biraj. |
2,078 | CVX | 3 | 2,024 | 2024-11-01 11:00:00 | Chevron Corporation | 98,506 | Operator: And the next question will come from Josh Silverstein with UBS.
Josh Silverstein: Thanks, guys. Just on the $2 billion to $3 billion cost savings, how much of this comes from the announced $8 billion of asset sales year to date versus what maybe comes from additional asset sales and structural savings, and then any split between upstream or downstream? |
2,079 | CVX | 3 | 2,024 | 2024-11-01 11:00:00 | Chevron Corporation | 98,506 | Eimear Bonner: Yeah. Thanks, Josh. So let me talk you through kind of our plan here given that it is new material. So first of all, as you saw on the slide, we have been disciplined in managing our costs competitively over the years. So this program is essentially our next set of cost reduction steps to sustain our discipline given that in our business, costs always matter. They are always important. So what we are focused on here is reducing absolute costs while we deliver significant growth in the business. Think about this program as focused on the controllables. We are expecting run rate reductions to be realized over the next few years by the end of 2026 from a 2024 baseline. So the full benefits will be seen in 2027. So in terms of where the reductions are coming from, the first category is really portfolio actions. So examples like what we have heard today in the call and the United Canada, Alaska, Congo, sales. So there is a large portion of this associated with that. We see the direct cost be reduced as the asset transfer from our portfolio. And then we would expect overhead costs associated with those assets to reduce over time. So that is one part of this program. The second part is just improvement initiatives that we see across the organization. They are coming from the business units, all segments. They are coming from the functions. You know, some examples of what we are talking about here are initiatives that leverage technology solutions to reduce cost, drones, robotics, digital twins that have transformed how we think about operating and maintaining our facilities. That would be an example. Another example would be improvement initiatives that really look to how we do our work, where we do our work, an example there would be the recent announcement of the engine global capability center in India. So in these centers, we are looking to standardize and centralize more of our workflow. So that is really what the program is. You know, when you think about the range, you know, what I would say is |
2,080 | CVX | 3 | 2,024 | 2024-11-01 11:00:00 | Chevron Corporation | 98,506 | of our workflow. So that is really what the program is. You know, when you think about the range, you know, what I would say is the first $2 billion, think about these as divestments and cost reduction initiatives that are in our plan, they are either execution ready or working towards becoming execution ready. Think about the third billion as an additional target that we have with initiatives that are underway that we have not really quantified. They are not execution ready. We have work to do to make them execution ready. So that is how I would describe the range and, you know, we expect to provide updates on these initiatives. We will do that through 2025 as we execute on them and deliver results. Thanks. |
2,081 | CVX | 3 | 2,024 | 2024-11-01 11:00:00 | Chevron Corporation | 98,506 | Operator: And we will go to Devin McDermott with Morgan Stanley.
Devin McDermott: Hey. Good morning. Thanks for taking my question. I wanted to ask about the balance sheet and shareholder returns. Your net debt ticked up a bit quarter over quarter in 3Q versus 2Q, I think supporting strong buybacks, and you are still well below your long-term targets. You have cash coming in the door from asset sale proceeds, as you noted, between now and year-end, and then a nice inflection in the Permian and TCO cash flow into next year. But I guess my question is given how volatile commodity markets and oil markets specifically have been in recent times, how do you think about continuing to use the balance sheet to support shareholder returns versus tapering it back and waiting for potentially lower commodity prices over the next few years? So balance sheet use and how you think about that is the core of the question. |
2,082 | CVX | 3 | 2,024 | 2024-11-01 11:00:00 | Chevron Corporation | 98,506 | Michael Wirth: Yeah. Devin, let me just address share repurchases, then I will let Eimear talk about the balance sheet. Recent volatility in commodity prices, for somebody who has been in this industry for 42 years, is not new news. That is the way this industry works, and we are in a volatile cyclical commodity business. So, you know, the backdrop is nothing we are not well prepared for. First thing is I just want to reiterate our guidance, you know, the share repurchase run rate of $17.5 billion is unchanged. The range we have given you, you know, kind of brackets the way we execute the program, and we were, you know, a little bit above the, you know, the midpoint of that here this most recent quarter. We have got a strong track record of buying back shares, which is our fourth financial priority, and that is after, you know, making sure we can sustain and increase the dividend where we have got a track record of doing that for 37 years in a row. Reinvesting in organic projects to grow future cash flows, to support that. So the second priority, the third is to maintain a strong balance sheet. We have got a AA credit and below 12% net debt. And then the fourth is to return excess cash to shareholders through share repurchases, which we have done for 17 of the last 21 years. And so consistency in financial priorities, consistency is very important. And I think we have got a track record that we can stand behind there through commodity price cycles. You know, over the last 21 years where it says 17 of 21 that we have repurchased. We have seen a financial crisis. We have seen a pandemic. We have seen OPEC, you know, open up the taps and, you know, commodity prices respond accordingly. And so we have been through down cycles. We have been through unexpected circumstances and have maintained a strong track record of shareholder distributions through it. In part because we have maintained a conservative financial position and a very strong balance sheet. I will let Eimear talk a little more about the balance sheet. |
2,083 | CVX | 3 | 2,024 | 2024-11-01 11:00:00 | Chevron Corporation | 98,506 | Eimear Bonner: Yeah. Thanks, Mike. Devin, you know, when we look at the balance sheet, you know, we are focused on maintaining its strength through the cycles. Right? It is an asset that we use to create value and to navigate the volatility that Mike talked about and reward shareholders consistently. So when we look at our debt levels today, our net debt is under 12%. That is at the low end of where we have been over the last ten plus years. So we are under-levered and given this and all the growth that is coming and the additional asset sale proceeds that we are expecting in the short term, we are comfortable with where we are, and, you know, we anticipate the net debt will come down a little bit in the near term with the asset sale proceeds that are coming. But we are planning with a multi-year time horizon with a through-cycle approach, and we are very comfortable with where we are right now with the balance sheet. Thanks.
Operator: And moving on to Lloyd Byrne with Jefferies.
Lloyd Byrne: Hey. Good morning. First, congrats to you and your M&A team. I think the divestiture progress has been great. I want to follow up quickly to Biraj's question. AOSP seemed very opportunistic. Does that change your long-term goals? And then really, I wanted to ask about the DJ and see whether, I mean, it is just really impressive operating progress there. Synergies, free cash flow, but I think the surprise has to be you guys holding it flat to the end of the decade. Maybe you can just comment on the opportunities there and whether there are more opportunities for scale. |
2,084 | CVX | 3 | 2,024 | 2024-11-01 11:00:00 | Chevron Corporation | 98,506 | Michael Wirth: Thanks. Yeah. So just to quickly touch on AOSP, you know, there was one kind of most logical buyer. Right? And it was the operator, and we have had discussions over the years and have not been able to really get to a common view on value. And so that is what has changed. And so if you want to see that as opportunistic, that is fine. But we really wanted to realize the value that we saw in that asset, and we have been able to do that. The DJ, look, you know, the first thing I will say is the integration there and the synergy delivery continues to track record that we have had over a long time of exceeding our synergy commitments. And, you know, when we do a deal and we come out with a target, it is intended to give you a high confidence number that you can use, and we have done the diligence we have at that point in, you know, our track record as we find more and we deliver more. We are very happy with the quality of the asset and the ability to drive strong performance. We have learned from each of the companies that we have acquired. I talked a little bit about the lower carbon footprint there. We have seen some other things like gas lift and new laterals that have been used. Some of these companies that we are starting to work with in some of our other parts of our portfolio. And the last thing I will say is the team there does a wonderful job of balancing the multi-step permitting process, and I know there has been some concern expressed by people about the regulatory environments. You know, we are working very closely with the regulator in Colorado to ensure that we can achieve their objectives and that we can achieve our objectives. And I would say that is a very constructive relationship. We have got comprehensive area plans in place that derisk the longer-term development. And the quality of the assets, you know, 400,000 barrels a day out through the end of the decade. You know, three years ago, we had zero in the DJ Basin. And so very pleased with it. We are big there. We are the biggest |
2,085 | CVX | 3 | 2,024 | 2024-11-01 11:00:00 | Chevron Corporation | 98,506 | You know, three years ago, we had zero in the DJ Basin. And so very pleased with it. We are big there. We are the biggest operator there. The question was, are you going to acquire some additional positions there? I would not say that is high on the priority list. The real key is to drive value out of this asset. |
2,086 | CVX | 3 | 2,024 | 2024-11-01 11:00:00 | Chevron Corporation | 98,506 | Operator: And the next question will come from Betty Jing with Barclays.
Betty Jing: I was on mute. I am sorry. Good morning. Thank you for taking my question. So I want to ask about the Gulf of Mexico. It feels like there is a bit of a technology renaissance that is happening in the Gulf, including the Anchor project that just came online. Can you talk about how the technology is opening up new resource opportunities for the Gulf for the Chevron portfolio, and does that represent any upside to how you think about the longer-term production and resource opportunities in that area? |
2,087 | CVX | 3 | 2,024 | 2024-11-01 11:00:00 | Chevron Corporation | 98,506 | Michael Wirth: Yeah. Betty, it sure does. And it is an extension of the story of the Gulf of Mexico. You know, initially, on the shelf as people moved from onshore to offshore, then out into the deep water, and we began to develop techniques to explore and ultimately develop and produce in deepwater now in the ultra-deepwater and in the ultra-deepwater now at ultra-high pressures and temperatures. And, you know, the breakthroughs on the Anchor project, and it is the first one to be producing with 20,000 psi technology. I mentioned last week in something I was doing just to help people understand that. That is essentially the pressure that would exist if an elephant, a full-grown male African elephant, were standing on a quarter. And so it is incredibly high pressure. These are high-temperature fields that everything that goes along with that needs to be capable of dealing with those pressures that include, you know, trees, blowout preventers, etcetera. We have a three million ton hook load now on the drill ships, which is the highest hook load we have ever seen. That opens up a lot. At least, you know, 20% of our exploration portfolio is going to require this kind of capability. We are using other things like ocean bottom node seismic now, that helps us better characterize developments and exploration opportunities. Think of it as 4D, essentially. Technology out there. We are working on AI tools to help guide exploration focus areas and predict geologic risk factors more effectively. So, yeah, I think the history of the Gulf of Mexico has been technology advancements to continue to allow us to identify and then produce resources out there. It is a vast area. The Mississippi River is, you know, was and is an incredible conveyor belt for organic material out into the Gulf of Mexico, and the industry is not done there by any means. I think there is a lot left to go. And maybe the last thing I will say about it is, you know, this is about unlocking new opportunities. We are also working hard to make better use of |
2,088 | CVX | 3 | 2,024 | 2024-11-01 11:00:00 | Chevron Corporation | 98,506 | I will say about it is, you know, this is about unlocking new opportunities. We are also working hard to make better use of existing infrastructure with nearer field development, the ability to tie back at longer distances and develop smaller discoveries that would not support standalone greenfield developments but can very easily tie back as a brownfield to an existing facility. Vallemore is a good example of this, and I think you are going to see more of those as well. So the heyday of the Gulf of Mexico is far from over. |
2,089 | CVX | 3 | 2,024 | 2024-11-01 11:00:00 | Chevron Corporation | 98,506 | Operator: And the next question will come from Paul Cheng with Scotiabank.
Paul Cheng: Hi. Good morning. You have an excellent production record in both Tengiz and Gorgon that they have done well. And it is particularly impressive that, given both of them, you have turned around. It looks like the turnaround has done well and maybe that came in faster than the scheduled time? So is it a one-off, or have you changed the process so that this is a repeatable benefit that we could expect in the future?
Michael Wirth: Well, it is the latter. And we have been working on this both upstream and downstream because these facilities are starting to look a lot more similar than they are different. And to deliver higher returns, one of the keys is to execute turnarounds well, ensure the work that is done enables reliable operations in between turnarounds, and to continually improve on this. I mentioned earlier that Eimear was just out in Kazakhstan and has been into Gorgon not too much earlier. Eimear, maybe you can talk a little bit more specifically about what you are seeing on turnaround execution. |
2,090 | CVX | 3 | 2,024 | 2024-11-01 11:00:00 | Chevron Corporation | 98,506 | Eimear Bonner: Yeah. No problem. And thanks, Paul, for the question. Yeah. To Mike's point, I mean, our complex facilities, whether they are in refining or upstream assets like TCO and Gorgon, they are more similar than different. And so this has been an area of focus for us to try and standardize how we approach these complex turnarounds to really drive performance. So we have been working on it diligently for a few years. And I think that the improvement actions that I would point to would include maybe the first one is just how we think about the scope of the turnaround. And think about this as looking at all the units and equipment and discerning, can I do the maintenance work on the run, or do I need to do the maintenance work only when the plant is shut down? And so there is a lot of improvement being delivered because we have been very diligent about discerning what is in and what is out. We call that rigorous scope management. And the second improvement talks to the digital tools that we have used to really help with not only planning but execution and prioritization. I will give you a couple of examples of the digital tools. Digital tools that help us with permits, digital tools that help us with isolation, digital tools that help us with leak testing and flange management, in addition to digital tools that help us with managing the span and control given that these turnarounds bring in huge numbers of personnel at once. That is another area. The third one, which I believe we have taken to a whole different level, is benchmarking. And we benchmark turnarounds. We benchmark the units. But the benchmarking that we are doing today, the benchmarking goes down to the equipment level. And so just the rigor in the benchmarking to look for improvements and to learn where we can be more efficient is yielding positive results. Then finally, I would say, we have experts in this area from an organizational capability perspective. We have employees that have spent most of their careers in turnarounds. And so we have |
2,091 | CVX | 3 | 2,024 | 2024-11-01 11:00:00 | Chevron Corporation | 98,506 | organizational capability perspective. We have employees that have spent most of their careers in turnarounds. And so we have looked for opportunities to share resources and to cross-pollinate with these experts so that the lessons that we learn in TCO, we can learn them in Gorgon and vice versa. The lessons that we are learning in refining, we can implement those lessons learned in the upstream. So all of those things coming together have really driven a step change in our performance with nearly nine turnarounds executed this year. Almost all of them have been delivered at industry-level performance. So we are very pleased with this work given the criticality of it to base business excellence, and these results are industry-leading. |
2,092 | CVX | 3 | 2,024 | 2024-11-01 11:00:00 | Chevron Corporation | 98,506 | Michael Wirth: Yeah. Paul, eight out of the nine turnarounds were executed in line with first-quarter duration targets. The Gorgon train two turnaround was our best Gorgon turnaround ever, with a 14% improvement in duration. The TCO KTL one turnaround was a 23% improvement in duration compared to the last one. And in several of our refinery turnarounds, we saw cost decreases of up to 50% compared to the prior turnaround of that same unit. So I think there is some real quantifiable progress that you can see across the system that is being achieved. Thanks, Paul.
Operator: And the next question will come from Bob Brackett with Bernstein Research.
Bob Brackett: Good morning. If I return to the structural cost reductions, and I want to put it in the context of the relocation from California to Texas. Is that relocation an opportunity for the cost reductions? I believe that redesign processes and organizations, or is it a threat to the cost reductions where there is chaos and lack of continuity? How do you think about it? |
2,093 | CVX | 3 | 2,024 | 2024-11-01 11:00:00 | Chevron Corporation | 98,506 | Michael Wirth: I do not think it is a threat, Bob. We have talked about the relocation occurring over a period of time. We are going to be very thoughtful about moving work from one location to another, moving people from one location to another. Not all of the work being done in San Ramon necessarily will go to Houston. So it may go to these global capability centers that Eimear talked about earlier. Some of it we may find technology tools that help us to do the work more efficiently and automate things. And so I think it is a little bit of a simplistic reduction to think about just lifting and shifting everything from San Ramon to Houston. It is a migration of work to different technology platforms, different locations, and we will do that thoughtfully and methodically over a period of time. We will make sure it is been planned out and derisked. And so, you know, I think it is part of an ongoing work evolution in a global company that has a workforce around the world, that can do work in many different places, that historically did a lot of work in business units because that is the way it had to be done. But now there are other ways to approach this work, and we are looking for ways to do it best to deliver the best work product and do that at a cost structure that is ever improving. Thanks for the question.
Operator: And moving on to Lucas Hermann with BNP Paribas. |
2,094 | CVX | 3 | 2,024 | 2024-11-01 11:00:00 | Chevron Corporation | 98,506 | Operator: And moving on to Lucas Hermann with BNP Paribas.
Lucas Hermann: Yeah. Thanks very much. And afternoon, Mike and Eimear. A fairly obvious question, I guess. I just wanted to talk to you. I wondered if both of you could talk a little bit more about CapEx going forward, and maybe it is an inappropriate time, and December will be better. But if I look at what is happening with the business, you know, obviously, Tengiz starts up. You have got your assets in the Gulf coming on, you are talking about, you know, driving for free cash or driving for NPV value in the Permian CapEx coming down there. If I think about the current rate of CapEx spend including, you know, associates, it feels as though it is around $18, $18.5 billion if you got at the beginning of the year. If I look at the opportunities for that CapEx to start to fall as projects or as plateau or projects come on, it feels as though, you know, maybe $3, $4 billion of CapEx opportunity sits there or opportunities to support CapEx decline. Yes. It is there. What is really hard, Mike, is to see, you know, where that goes. Particularly given, obviously, everything going on in the Eastern Meds at the moment. So, you know, is it right now to start thinking about CapEx coming down very materially as we move forward over the next two, three years, and you are really starting to benefit more emphatically from a portfolio that, in essence, is, you know, deep in resource but pretty long duration. |
2,095 | CVX | 3 | 2,024 | 2024-11-01 11:00:00 | Chevron Corporation | 98,506 | Michael Wirth: Yeah. So you have covered a lot of waterfront there, Lucas. Let me try to address some of it, then let Eimear share some of her thoughts. Number one, I think an important point is if you look at the rateability of our CapEx, we used to have a program that had a lot of big long-duration capital projects. There was a pattern where the back half of the year, fourth quarter in particular, tended to be a little bit heavier at first. Quarter a little bit lighter. We are very ratable now. We have been about $4 billion on our organic CapEx, you know, all three quarters this year. So it has become much more ratable and predictable. That is a reflection of the nature of the projects that we are doing. Point two, you talked about CapEx coming down. A decade ago, our CapEx was $40 billion. Today, you bring in affiliates, as you say, it is $18 something, $18.5 or whatever that number is. So it is less than half of where we were. So it has come down substantially even as production has grown, as the company generates more cash. We are doing it in a much more capital-efficient manner than we ever have before. And then point three is, yes, we will continue to seek further ways to optimize and improve the capital efficiency of our company. A larger portfolio does over time require capital to maintain it, and so, there lies the trade-offs that you evaluate as you look at your capital investment opportunities, the readiness of those, to move into execution. And I think in the near term, what is very clear is our affiliate CapEx will come down next year as the project in Kazakhstan concludes. So you will see affiliate CapEx come off. You know, we are in the process right now of finalizing our business plan for 2025. And so it is a bit premature for me to guide you to that number, but we are looking at all the trade-offs and then we will know more about that after we complete our planning process. But our intent is to stay very disciplined, which I think is something we have demonstrated here over, you know, many, |
2,096 | CVX | 3 | 2,024 | 2024-11-01 11:00:00 | Chevron Corporation | 98,506 | process. But our intent is to stay very disciplined, which I think is something we have demonstrated here over, you know, many, many years now. Our guidance range of $14 to $16 billion is unchanged. And I think you should expect us to respect that. And if that does change, by some quantum and you throw out some larger numbers there, you know, we will cover that with everybody and talk about how it has changed, why it has changed, and how you should think about what that means going forward. Do you want to add anything to that? |
2,097 | CVX | 3 | 2,024 | 2024-11-01 11:00:00 | Chevron Corporation | 98,506 | Eimear Bonner: I think you have covered most of it, Mike, given that we are putting our plan together right now. Lucas, all I would say is, you know, the projects that you referenced and how we see the CapEx profiles coming off and the free cash flow growing as those projects complete. It is a key focus for us. So we will give you more information on our fourth-quarter call as we complete the process. We do not want to get ahead of the process right now. Thanks for the question.
Operator: And the next question will come from John Royall with JPMorgan.
John Royall: Hi. Good morning. Thanks for taking my question. So could you talk about your position in California in the downstream, still having two refineries there, and we have had another closure announced over the past couple of weeks. Is shutting capacity something you have considered in California, and how do you think the market will be impacted by this latest closure? Do you think we will see structurally higher profitability there as a result, or maybe things will adapt kind of back to where they were? |
2,098 | CVX | 3 | 2,024 | 2024-11-01 11:00:00 | Chevron Corporation | 98,506 | Michael Wirth: Yeah. John, first of all, I think what I would say is we have seen another ill-conceived move by a state that has implemented policies to deliver its residents the highest gasoline price in the country. This most recent action to insert state bureaucracy into turnaround planning and inventory management is likely to make prices go higher, not lower. Putting bureaucrats in charge of centrally planning key segments of the economy has not worked in other socialist states, and I doubt it will be any different in California. Policies that constrain supply faster than demand is adjusting create more volatility, and they tend to create a greater likelihood of higher prices. And so unfortunately, these measures are advertised as doing the opposite, but the reality is for anybody that looks at them and thinks them through, discouraging investment and constraining supply when you still have strong demand is going to lead to just one conclusion. And so, look, we have operated in California for over a century. Both of our refineries are over a hundred years old. We have got very competitive refineries, and we have got strong integrated value chains with very strong brands, strong customer relationships, and so these are competitive businesses that we will continue to evaluate within our portfolio like every other asset as we have discussed earlier. And so we will continue to meet our customer needs and compete. We will evaluate alternatives if and when it becomes evident that that is the appropriate thing to do. But I will tell you, it is very tough to justify any new investments in that system, and it is only getting tougher. Thanks for the question.
Operator: And we will take a question from Roger Read with Wells Fargo. |
2,099 | CVX | 3 | 2,024 | 2024-11-01 11:00:00 | Chevron Corporation | 98,506 | Operator: And we will take a question from Roger Read with Wells Fargo.
Roger Read: Yeah. Thank you. Good morning. I would like to ask you, Mike, about the LNG markets globally. You know, we have seen some new units get delayed. We have seen a couple of other companies this earnings season talk about, you know, the outlook in terms of supply-demand balance kind of favoring tightness in 2025. Just curious how you look at it and maybe if you could remind us of your, you know, contract versus spot exposure so we could think about how that might play, you know, the margin potential for Chevron in 2025.
Michael Wirth: Yeah. So, you know, LNG demand continues to grow. But it comes against the backdrop of very healthy inventories. You know, you ask about 2025, inventories in Europe are strong for this time of year. Inventories in the US are very healthy for this time of the year. You see that reflected in Henry Hub prices. And so overall, we have got, you know, a market that currently has healthy inventories and recently good supply becomes somewhat weather-dependent. And so, you know, that can change with a very cold winter. But right now, I would say, you know, it does not look like 2025 is setting up to be a particularly tight market, you know, and then longer term, of course, we have supply coming on in Qatar. We have got supply coming on in the US. And so there is more supply coming to that market. And so I think in the, you know, the short to medium term, it is a market that is not really prone to becoming nearly as tight as what we saw a couple of years ago when the situation in Ukraine began. Our particular portfolio is 80 plus percent contracted primarily on oil index pricing on long-term contracts. Most of our sales are into North Asia. And 20% or less spot exposure, and a lot of that is out of our West Africa position, and we will have some spot cargoes from other parts of the system occasionally. But primarily long-term contracts, primarily tied to crude price. Thanks, Roger. |
Subsets and Splits
No community queries yet
The top public SQL queries from the community will appear here once available.