Chevron CEO Mike Wirth on Buybacks, Hess Deal, and Future Oil Demand

Strong Quarterly Performance and Shareholder Returns

• 📈 Chevron reported a strong quarter with earnings up 6% versus the prior quarter, despite relatively flat oil prices.
• 💰 The company distributed $7 billion in shareholder distributions during the quarter and $15 a share over the last 12 months.
• 🚀 Chevron is on track for industry-leading free cash flow growth by 2026, even at lower oil prices.

Deepwater Gulf of Mexico Projects

• 💡 The Gulf of Mexico is a key growth area, with three projects started in the last eight months: Anchor, The Whale, and Ballymore.
• 🌊 The Ballymore project features some of the most prolific wells ever seen, with each expected to produce 25,000 barrels a day.
• ⚙️ These deepwater projects showcase engineering technology and the abundance of American energy, with decisions based on long-term price forecasts, not daily fluctuations.

Hess Acquisition and Arbitration

• 🤝 Chevron CEO Mike Wirth expressed unwavering confidence in prevailing in the arbitration case against Exxon Mobil Corp. regarding the Hess Corp. acquisition.
• ⏳ The arbitration hearing is set for the end of May, with a decision expected three months later.
• 🚀 If successful, the integration of Hess can happen quickly, within days or weeks of a favorable decision.
• 📈 Chevron has been buying Hess shares on the open market, viewing it as an economic investment due to the shares trading at a discount.

Global Operations and Future Demand

• 🇰🇿 In Kazakhstan, the Tengiz field's production capacity has been increased to nearly a million barrels a day, and these barrels are high-value and historically not subject to OPEC+ cutbacks.
• 🌍 Wirth anticipates growing global energy demand over the coming decades, with oil and gas remaining a vital part of the energy system.
• 💧 Existing oil fields decline, requiring continuous investment to maintain production, creating opportunities for capital-efficient companies.
• 🛢️ The U.S. is a large producer of natural gas liquids like propane and ethane, which are used as feedstocks for petrochemical production and heating, with trade flows potentially reorienting due to changing trade rules.

Financial Outlook and Resilience

• 📊 Chevron's break-even point to cover capital budget and dividends is in the low fifties, moving into the forties, and projected to go lower in the coming years.
• 💰 The company is focused on structural cost reductions of $2 to $3 billion and expects to grow free cash flow by $9 billion at a $60 Brent price.
• 🏦 Chevron maintains a strong balance sheet with a net debt of 14% and a double-A credit rating, comfortable with gradually increasing debt levels to a 20-25% range through the cycle.