Chevron (CVX) 26 Apr 192019 Q1 Earnings call transcript

Company Profile

Participants

Mike Wirth	Chairman and CEO
Pierre R. Breber	VP and CFO
Devin McDermott	Morgan Stanley.
Phil Gresh	JPMorgan
Paul Sankey	Mizuho
Jason Gammel	Jefferies
Biraj Borkhataria	RBC Capital
Neil Mehta	Goldman Sachs
Blake Fernandez	Simmons Energy
Jonathon Rigby	UBS
Roger Read	Wells Fargo
Doug Leggate	Bank of America Merrill Lynch
Sam Margolin	Wolfe Research
Jason Gabelman	Cowen

Call transcript

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Operator

Good morning, ladies and gentlemen. My name is Jonathan and I will be your conference facilitator today. Welcome to Chevron's First Quarter 2019 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. reminder, call a being As Instructions] this is conference recorded. [Operator call now of the turn will over Chevron the Mr. Officer I Executive conference to Chief Chairman Corporation, and Wirth. Mike go Please ahead.

Mike Wirth

you. and first Chevron's earnings call back. Jonathan everybody quarter you, webcast. Thank to welcome right. We All missed I'd and like to welcome

our Pierre Relations of Wayne with Borduin new CFO, Head call Our are me. Breber and Investor on the

Chevron's refer website. slides available the that We to on will are

other on presentation we statements. get information be please the estimates, statement Please forward-looking Before and cautionary reminded that review contains for projections, this investors slide started, and important and X. stockholders

to quarter a few results Moving questions. opening first we'll I'll then review your take will X, slide and today, comments, make Pierre

As before, I've positioned to said well we're environment. win any in

Analyst strong we advantaged us capital Meeting, low breakeven, well our that returns. balance shareholder and superior and Security lower risk portfolio, discipline shared to During execution position sheet our deliver

Anadarko, builds yesterday done prior We gets planning. With we'll story it even to the turn to through financial it transactions, We who take acquisition announced well one. Pierre do We will will that it begin know regulatory It results. to Chevron our of submitted begun you transaction approvals. even strong And the how remain better. joint the create companies With and confident and two by we've that, I'll stronger strength. again. integration our agreed anti-trust on integrate Anadarko strength We've an completed. on be over to filing

Pierre R. Breber

Mike. Thanks,

and cash business returns approach the earnings to X, continues drive slide disciplined solid Turning focused our to flow. to

or $X.XX were $X.X diluted per First billion share. quarter earnings

$X.XX $X.X earnings Cash were share. for from Excluding foreign billion. the flow per quarter losses, billion operations $X.X or was exchange

than was it at a billion. XX% debt changes, quarter less ratio strong balance capital maintained end. sheet with a working We Excluding $X.X

per up million quarter quarter increased repurchases than our quarterly quarter share, X%. $XXX billion around During $X dividend lower to per the first were our Share guidance. the $X.XX we during

During Anadarko in restricted buying from shares the were back of light quarter, the we acquisition.

and capital billion. refining flow Free guidance. pension margins, in solid capital million $X line the Turning generally cash asset and of to full $X.X working year Other effects trend in flow of consumed was chemical excluding with our cash Working consistent proceeds $XXX despite TCO over cash about pattern. slide contributions lower is the quarter billion, $XXX X, items million flow, co-lending changes was sale million. included of around and seasonal with $XXX

due year by largely to $XXX due quarter declined exchange quarter crude XXXX chemicals downstream Earnings items A remain are make range grading and sale to XXXX. first guidance Total and billion from continue of we ago, our impact weaker progress to $XXX absence earnings lower in to billion reach foreign impairment. quarter earnings swing XXXX, current X and by since the end low first $X.X compares high portfolio. Slide our on asset of beginnings end of billion proceeds this million year, year. We first million. asset the $XX track Special XXXX decreased to the prices the earnings margins. with $X three by of increased

result weaker other Excluding by affects. million, realizations. timing the The segment lower unfavorable special higher coupled items upstream flat relatively with earnings decreased in earnings by charges. higher due and of about as production was was Downstream mostly FX, corporate were primarily to variance margins offset the and $XXX chemicals refining

first to compares Turning for XXXX. slide with results this XXXX quarter fourth X, quarter

the than about fourth First quarter lower $X earnings quarter. billion were

million earnings This decreased impact exchange by offset partially by between a was project write-off. Foreign periods. the of $XXX absence

lower unfavorable unfavorable largely refining offset The swing realizations tax per decreased a by Downstream segment XXXX. X activity listings and by $XXX X% production from exceeded reflects to primarily were were marketing offset results On and for day items. other equivalent quarter. between quarter. day the Lower XXX,XXX barrels increased These affects and in items flat or million, in earnings first turnaround and second variance quarter XXX,XXX about slide corporate lower per coupled almost operating increased quarter barrels an margins. straight this Shale XXXX due million special Excluding upstream impacts tight depreciation Production production were and by X with oil partly barrels lower the FX quarters. expenses. first timing day.

in new declines due primarily the primarily Base and XX%. in effects downtime day, at production with First barrels per net barrels Hebron per day, quarter per Gulf Gorgon by barrels Production XXX,XXX line barrels up our the XXX,XXX projects, to in per XX,XXX major increased Permian Wheatstone, Bigfoot. wells guidance unconventional for day, were was of and by production of reduced unplanned from XX,XXX notably The of production day. capital Mexico.

closed we to are in X% asset Now this We upstream to expect XXXX to earlier bids on Sea our continue assets Denmark of sale month UK looking the XXXX assets. ahead, our sales. production on X% excluding and evaluating growth be North

unchanged In to guidance billion, the purchase on close price, we co-lending investment dependent the of downstream, upon at the Our Refinery quarter. profile expect is year TCO full second Pasadena for $X in and dividends.

$XXX to than also of impact activity, tax estimated We more refinery after an high equates expect million. turnaround which earnings

one to to mind remarks. we queue, so a We're yourself have buy $XXX open the lines. of the restrictions light Anadarko In of the pension continue full expect Post-closing, a on the concludes quarter. at around contribution guidance That and billion. do that second best billion shares please we limit And questions. take second all answered. to to follow-up. full $X.XX our Jonathan, share the to quarter, we one try your question questions expect $X.X we in Keep at repurchases per of expect a prepared in back million. do segment for our ready please your For quarter, year acquisition. now unchanged to is We'll rate our other get

Operator

Stanley. from first line from [Operator instructions] comes the Certainly Our Devin question of McDermott Morgan

please. question Your

Devin McDermott

good Great, morning.

Mike Wirth

morning, Good Devin.

Devin McDermott

sure color remarks. prepared start, I'm asked Anadarko appreciate to and wanted just so the the I the if the there, deal in it'll process on be I So don't, additional

remind you can well. through make and the would and and helpful process can leave to the RCU you just how as milestones and from is be timeline here, competing First, is [ph] key is like? on you off any walk comments I'll what from you, that

Mike Wirth

Sure.

expect have now arise don't yesterday. timeline see issues proposal. our a probably mentioned today any made ago we anti-trust third so considering Depends handled a any could is, say close. result Anadarko’s the We Anadarko be So pretty if weeks back an I material, anti-trust little a would to And in reasonable than we I have unsolicited combination, a quarter that that back and be period different of -- We and we went come within second couple the shareholder because you Board time, vote, then that with of questions. in filing. they from for a scheduled a review anti-competitive would XX days. have that that, or told will

we've I year. think always this half said of second So

that so the the be And be would -- would timeline. that

Board reviewing offer. said wait I they're and think we're going see what has this unsolicited -- to Anadarko

will timeline. have And overall some on the so that bearing we’ll obviously

Devin McDermott

sense. Makes Understood.

Mike Wirth

Thanks, have you Devin. Do follow-up. a

Devin McDermott

wanted co-lending. to just follow over and shift one up. Yeah, to I TCO the

about color but should the can there that is year. give out the the and throughout how on us you playing shaping any unchanged, mentioned guidance think You we

Pierre R. Breber

the mean, know, Pierre, ratable that's ratable on and as and appropriate I is year Devon, it'll but it vary you and But of roughly project affiliate roughly should prices you the think again, course Yeah, in view time. during spending of dividends. this you point it depending at this if being

Devin McDermott

Thank you very much.

Mike Wirth

Devin. Thanks,

Operator

Thank you.

of line Phil comes Our Gresh the next from question from JPMorgan.

please. question Your

Phil Gresh

Hey, good morning.

light be of put and reduction the about that in transaction, perhaps if think the you surprised degree capital the out synergies back question, Occi First behind bid talked would competing I of their out that's that, the investors that thing in component. one proposed there even details

conservatism maybe comment you've where degree think, been if to some wondering have degree about your you'd a now I But the about come there, I numbers so asked was could from. of forecast. just synergy upside your that's out about And and already

Mike Wirth

of achieve comment $X synergies the look, the delivering Sure, value deal. in the we're close, from on another synergies ability and details offer. first the real run Phil, I'll rate and not to are in confident, significant our you post tell year to so I'm our billion going

to I begun mentioned meetings strong this history successfully can with [ph]. exceeding to meeting a multiple can for got of already. earlier, We companies both go joint it and can from already integration companies committed [ph], we've our meeting days Gulf teams targets, go As and to Anadarko. often to We're it synergy synergies. back Texaco, had week We've go Unical integrating this full the delivering two

know, we that we as very we're we're as something detail, what billion. we we done this certainly it, more And can, know $X can get that so and is very point, we've at deliver and this know we will good And confident more. at the before we

benchmark the well Permian. a costs, can absolutely the royalty Permian very The basis. is We've in that thing that results synergies. on of cost just well increased that performance, billion. get transaction. on forward from position and design, a facilities, will we indicated out execution Permian that spending is unit capital financial realization, performance a strong we value this great have cycle Permian, we that that not will other metrics confidence completion, contiguous strong We can We've a see I'll realization in that aggressively activity do in be virtually the accelerate and And and in all performance, that deliver the we from. to business have accelerate time, regular benchmark basis. $X realizations value really we And we got increased not OpEx efficiency, bring value the there. is strong service that We've can reflected mention design, a continuous position which in that able We performing

we will can I see confident very so deliver we will that you about it. and And more can you think there, as talking we feel value to you be --

Phil Gresh

Okay, fair enough.

more you bid, should would go good Anadarko's was because why the to is a at win consider your destructive follow-up you offered, and through Board raising which point back to if to price there your not not from you and enough, -- and be, -- a your and perspective, could us [ph] maybe that offer's help I so. -- that than to look priced there's return's this a question Just its think at is acquisition quantitatively decide is if do just offer an this lower obviously hoping forced

Mike Wirth

The long superior this merger a of of Boards strongly enables Sure. compelling. shareholders company. both agreements for our Board, And with gas approved Anadarko's offer have Anadarko transaction shale, we further superior. public strengthen reductions term deep have we combination assets Well large even attractive of and two information and We cost stronger the I was focused as and already for value was made a is our company. natural Anadarko the basins. week the signed that viewed combined It very logic by industrial won't by water and grade investments in high the companies companies. speak and an positions portfolio that further the unanimously create of but believe our even leading

take enables financial and the shareholder to Our us increase additional position distributions. equity the and continue strength leverage still issue and balance to sheet on

there balance Permian. of have cannot. won't best over leading in LNG, And will financially the approve many no of earnings a in performance Mexico We're can mitigates be in strong We There's vote the upside, flow and different Gulf operator operate the the strong, got very companies the and Chevron simply others strong deal, class required in with stock. be that strong that accretive strategic ways risk. and what coming shareholder world we've is We out to dimensions in Our cash value. sheet in is and fit. a already certain levered we transaction of full currency

I very host are a why there have Thanks think Phil. reasons compelling So a transaction. of whole we

Operator

you. Thank

Our next the comes from question from Sankey Mizuho. line Paul of

Your question please.

Paul Sankey

of obviously the afternoon there's how at your a looking to to potential Mike, to of higher, terms be about that tremendous talk we it's would value Can at for amount bid. sheet, you. you're Anadarko metrics we you Good there, adding not in Thank your looking but when look you and about Chevron? suspect firepower the you balance Hi, we bid potentially London. think from at everyone.

Pierre R. Breber

we looked you that this? -- off. actually to and of that question I time of disciplined get I very close a end And Phil yes, don't value And want which doing things of isn't yes, a a very that address at we've you're got anything. said as this to the think we to creating is. specifically, we've which do shareholders asked do said, Phil, to to there at Yeah, course but done? I that And kind we've without failed approached to our as for a to the been point and And are strong at answer story valuation. is answer, a is We we've there the last transaction. this, that is will ties there need

So host of look a at whole metrics. Paul, to your we question,

and we And us some us the does. billion ones of improve, it metrics. to of the capital, than barrel, it does an us Does continue set is on flow acquisition strong improve accretive and return a and creative us time over cost. the investment accretion XX over the free which return investment, attractive $X get the after resource industry a entire resource primary to spending, earnings, this gives cash at give less which are It do barrels on working give give opportunities this this capital investment is does queue, to

And ones so look that metrics whole we of there the are are like at. that, a that host

Mike Wirth

Yeah, to mix getting and was the stock. Anadarko mutually Paul, I XX, the we've to XX your exposure our cash. to. talked about was know equity mean, the I agreed wanted question shareholders and, if don't of

to good have put very the put have wanted to clearly ended agreed that's have capacity up. to we a what if we cash structures. where Anadarko in have could stock. We We but more we more we do, But -- could alternative

Paul Sankey

talked flow, single that sort say, look cash I about should your metric to point, needs you've realize this free should of point Mike, accretion that I [indiscernible] be Yeah, from the at. we

wondering to just how We’re that. think about

Mike Wirth

there? question So Paul, sorry, in another follow-up Was there

Paul Sankey

Could does think you see aspect of No, tough I and a between that Occi. a think if it talk thing you the differentiators have you great said seem how measure. can't But a that? to potentially one was that is you about I other little you fit. you which Mozambique obviously [indiscernible] the bit Thanks. between up, and that's

Mike Wirth

on discussed resource. call of Sure, the world we couple Mozambique I view gas a as a weeks as class ago,

that to site good portfolio the soon pleased It's a the And We both project this on a competitive people with job. on LNG the the to and strengths. very and project. there. has matters. that progress cost intend we plan people working We a that do the good visit well there's with are product leaders this timeline made. they've done slow think think of Mozambique And We and with project working down. see I not government to fits and visit that our into team our

the that, we we We've shipping so project. things the the balance value. support project. like a sheet We've have bring will think experience shipping got like can And We got this some in to component. large

mitigate we value can in enhance and Thanks, So Paul. I risk and ways of think there are improve execution the project. execution and

Operator

Thank you.

Jefferies. Jason from comes line question Gammel from of next Our the

please. question Your

Jason Gammel

is the enhancement I superiority Thanks the create in that operate your the ability has very an their competing to Permian. about reason talked guess related is, and say I to much. my as ability And operator. first most the to return bidder their question

So address benchmark you relative development competition in Mike you where you can terms right to now? of think Permian

Mike Wirth

all in you earlier in at we seen look Permian like early the numbers I open operators We their wide run show metrics it that about performance early are there's things in there will are really certain choke it's see. range year wide chokes recovery. we quite we've And Yeah, the there benchmark different of and that look metrics and a need and are past production. that particular that -- ways with to ultimate optimize mentioned to a out can the production -- careful operators you picture at very deliver other best management don't strong that But very you dimensions.

we're royalty of ours always and and can else we goal creation for ultimately is to look a you company down can one, long-term So a metrics match. looking anyone add advantage technology be capacity and degrees And a value we to you value that an and position say with difficult does, unlock have improve per returns has EURs, greater recoveries, put it which high costs the over time number is further deliver performance. and that on returns. that barrel low technology recoveries efficient even production very more others at few we you value like driving what as not is we you it together as model I drive leading think I and do we about and cost and see which Short-term really would careful we're capital take have focused at generates that

so performance lens. not will our at look simply through a and a I And say metrics and we lens production value that

Jason Gammel

time My being -- affected to is annual upon regardless. the before. have from the X in completing follow-up transaction rates by raise billion Mike. contingent appreciate it announced is it would transaction deal billion right you But the that buybacks the at run Appreciate the been public now or that the you to question a the what to domain. X run did X the rate was I expect you had increased are target billion on was

Mike Wirth

case up X a last stronger. this so this pre-existing step rate from that deal with to billion and even makes year and creation run a tied to confidence transaction announcement the that was us made indicate to It was rate signal accretive billion cash we strong increase run year of five transaction the in to flow it and this the so strong got our we and I said an the enables as value transaction, is a X of

Pierre R. Breber

we thought to yourself we shares, related as first were can clarify find back to stop just buying the lower could as you possession information again there quarter transaction. buybacks we Jason if prudent in material could said nonpublic I believe be was when we had Yeah, we on

expect right buybacks and time intent to increase or to $X.XX post-closing, continue billion to time to no shares in $X per So we the could the in buybacks billion these restrictions but the in we we to quarter. quarter. quarter second second then could to be low change circumstances expect rate the able And annual

Jason Gammel

Understood. Thanks guys.

Mike Wirth

Jason. Thanks

Operator

Thank you.

from comes RBC Markets. question Capital Borkhataria from line next of Our Biraj the

Your question please.

Biraj Borkhataria

Anadarko. royalty talk in transaction that basis this Could that and a quite exploration expiration it And just thanks bit this wondering if Hi, one, the then thinking taking about you long have year bit strategy. about is you interest but Thank or the a if articles by into the a infrastructure there synergies question of just that terms just the non-news. little on you a your around two that my that Permian anything a you. questions. seems to that just to you the for I lead we on strategy follow relates Permian also how a look was your subsidiary upside portfolio I is there expiration and little But was combine in in also transferring is second and new of couple that closed? to the

Mike Wirth

qualifications the expand we're which When that lot expiration as two to the the the phases a be up. have drilling bring and opens that but economic new talked that existing a might portfolios. talked to cover the might with Deepwater. we as new tiebacks for of Gulf we standalone explore in expiration economic on earlier that the All us Okay, significantly that about our and needing on reach about We the platforms would not begin basis in For Gulf be we to expiration very as, to standalone accumulations a this back infrastructure see do. to of a the extended basis that surface one Greenfield we position without that into project, synergies Ridge infrastructure can combine so of and together fact in allows necessarily could support tie not Mexico first be can a And through you developed companies Mexico. of tiebacks powerful technical would we final infrastructures, We accumulations

might very exploration a Discovery, point Perdido Deepwater circumstances it's Not lower from much And in of of the the projects, look so where also be of which at next approach to to a Mexico. return, outcome. that encountered enables that the an miles phase and different could is I it development feet say pay, -- on whale. over cycle, holder think shorter net Greenfield way the XXX higher announced have becomes because we not XX really about we a equity economic discovery was just and risk some certainly to Gulf in week, this I’d right we're Blacktip that operator away Shell out there the

continue that. find that better So great tremendous has discoveries got and deliver see to returns challenge And opportunity. we area resource in to to it out is the we've ways and strength of generate an

options Your certainly royalty, kinds activity do manage Permian and allows as our position to positions could that. us at have with of would strong alternatives entity as that that seen managed. grow, or on to is for not we would that of properly one royalty which saw to we was Permian some But and entity I those royalty what the if up do. that consolidated an the don't and that into It us all certainly question a accounted efficiency we to collected want insure royalties it point and enable with that indicate continues do focus in things that we've done is royalty others that desirable. opens an you've

Biraj Borkhataria

Great, much. very thanks

Operator

you. Thank

Goldman next line Neil Mehta Sachs. comes from a Our question from of

question, please. Your

Neil Mehta

Congrats, team Pierre on morning and the again role. new Good

macro. you the across has been age comment that cuts from relates your about chain have been artificially we're OPEC think on the forecast here meeting. oil the So think worldview? behavior from the play how an fundamentally the was the months the conservative XXXX. it in to that value changed of as Mike very clearly but abundance question more a wanted position do here, not the you these some had and pieces operate Prices in given unique lifted perspective bottom some do countries? off price just price had of Or you as asking of and firm first to macro. OPEC by you your actually you moving Two you've on fact your OPEC to away oil Has I view

Mike Wirth

Yeah, so…

Pierre R. Breber

Let me give you that today, best my one on shot Neil.

You know, strong surprisingly world. of different demand the continues be think, many you go by, seeing the strong. per consistently global out. over that million and, GDP Today. day the see I very the year, we've up geographies. again We're don't around we strong in a value number barrels for to know, products had demand that across different this has come said a in we weakening evidence and U.S., chain first We're quarter many

upward. growth solid to oil demand growth economic looks our march So, and continues

receded. You and at the somewhat and saw China as we activity concerns end last some have know, of those year, were trade weakness, in economic there about

with Iran of got to and the underway, side, set of not Libya the you've geopolitical of which difficult, continues the being the usual creates be very On issues some news. prospect out Venezuela tightness the right. supply waivers dynamics got We've is in extended,

to which the the real tightness, and in maybe And the consistent markets. have years have so for way so stable their OPEC three cases the supply same plus last countries, years, with more resolve manage non-OPEC on create couple and supply of the demonstrated a side, things that some you then some concerns that's have you in of or

have guess in of And from top about a on play today, the commentary role that the a place on in comments where still forward which OPEC. out throw side. with do he's OPEC they expectation you supply You I creating think I President, again a

specifics some conventional global supply all There in best change issues can economics geopolitical so more no what that And of might global how demand world. out the how the to demand so each believe be overlay favor expectations and issues favor then mix a and the have countries still the and countries of that and is is the energy, up. around and story technology which we and types rich markets on Fundamentally, supply while picture needs resource supply have forward might dynamics picture world in It's energy and developed. we're of of shapes the the ways sorting of of that. in we're renewable of shortage country the energy demand

and to supply be to And very a standpoint. and from competitive cost so cost drive a matter we continue

I'm that’s I not how there, brand gave really So see it. but new anything I

Neil Mehta

That's question growth helpful. Analyst of of the gave the is post sense was were follow us XXXX course will that the portfolio expressed to the take transaction the The transaction of out looks eventual investors the Anadarko over kind of the begs all up and if wage of these types has a one side transaction from XXXX. have some at Anadarko equation, Ramp of thingies it the what and our like drive concerns, the And some in to the of flavor Day sort of where have Permian and we been this post Chevron year what's next the you transaction. the that

that, an to want up certainly but respond you by that view to your a just independent because have to is do I here opportunity that's standalone you I investors. at think something So transaction been give brought opportunities

Mike Wirth

longer Yeah, absolutely, of to have got resource We've do a say five given on wanted people I nearly it said I March, outcome production on again reserves. have we it. for that. years see in so replacing billion XX because we've We've been resource. will transparency view anxiety, the and not barrels

do because a We're operates. you company just at that the five difficult there do our stopped scale very at after to that not over delivered that. years see time as growth for X% X% think And now so consistently an confident we companies being a convention over extended of that. matter can and this we steadily is period been we problem to five which years of is

unconventionals that. don't so And flatten out after

them. and into position level a very in the deepwater little highlight Permian of our which got call which we've in we've the got few ex about tie already on a Our the is continue type the to performance of other We've Blacktip to in Anadarko now. front We transaction. not has got is development bring resource and of and converging tried very in Permian a metrics ability or a resource early system, our your existing bit Mexico Brazil that system the position got question into shale We've Africa. talked West economics are in I've where Baltimore, economics on strong acreage have that Whale, years. put really decades to larger backs Anchored stages goal

risk So and of extends but partition the I'll and simply where world production there the to Venezuela got we're cycle is say positions we got, that a but the there one in that what be and offline deliver XXXX is resource in blend there are capital begin the there and again. that will competes invest I an develop amount around enormous to low I think things operating strong and is are I'll of developed not that is think resource in a for well cycle today day are function us of hold then stuff stop that it's we've of pretty which A short and still opportunities zone. some beyond We and projects best longer large lot not investments. cupboard there which full you'll a empty. our decision economic the production drives targets, those outcomes for see

Neil Mehta

guys. Thanks

Mike Wirth

Neil. Thanks

Operator

you. Thank

the Energy. of from Blake line Our next from Fernandez comes question Simmons

question Your please?

Blake Fernandez

that to basis, zero sure this. just morning. to should make but I'm I XXX% buyback I'm on the the a and way up on buyback, Is Is want to flag $X clear say Anadarko assuming good below full that year sorry ramp due per XQ look billion guys that going the number it quarter, be is at it. you case, essentially to we're come deal. to fair than in when obviously X.XX even to Thanks Pierre to correct

Pierre R. Breber

Yeah, just essentially me let and it. restate

on restrictions of that guidance buybacks possession information not back in we're that of $X combination transaction clears being not when there material at the to under. -- and There equities are One yeah, did the a and itself there is restrictions time. or we're are anticipate non-public is acquisition business happening the sort Even an other we're issued. when if allowed So when shares. buy operating billion was two

rates. So you on other are solicitation buybacks proxy can't versus historical buybacks limitations during the

So about being gross of increase we talked we're transaction. XX%. a debt it. just below absolutely different under here ratio regime Lots to Post-closing have capacity the the operating during

buybacks able there to then when low and we and won't guidance be the is be tied So some be acquisition. a get could but by guidance no to we achieve will encumbered the restrictions buybacks post-closing, again quarter in the second the or

Blake Fernandez

you. thank clear, Very

the gas take alleviation the and The second is on a side lot talk know I have get avenues on I more as realizations side, or you've firm been really to capacity Permian to side. weak. pricing take Wahoo you the guess the question price away improving your Can away there? far worked you that continue what on is really you crude about, on as as grow

Mike Wirth

Yeah, I will take might perspective as some well. Blake have that Pierre then and

so and we for are capacity all it gas away it's moving and NGLs whether to take or production it got oil, our market. taking have We

are little flaring to production. engaged not routine to We of enable And had bit flare would we and not dry gas intends in gas.

if a sometimes now, you market. liquids better the ground don't in gas that have So for keep better just right it's

Our and production several production We're at we to on take XX% alluded liquids looking the been of capacity we entire time liquid is rich and current you and XX% ahead the here. gas. Permian focusing our as away in quarters ventures, described

those of to there out. up in in you a what are investing is for think would that come see we been ugly you that equation, here market future, some expect has sync the and a when you've And like it's a are and material in we're, lot change across to differentials pipes take pretty see of got slow tightness that and the a little of we year, quarter all probably exposure something going in has I Wahoo think got scope should differentials the the but years type not portfolio, I which our Morgan's been developing online I you are may company this the start on know, that than you see seen away normal Mexico in commodities transportation you'll to be times to expected. lately. time production the number pretty is next all is infrastructure people periods of capacity I lot come the people there resource, anything positioned market and our future. will Wahoo and Kinder people, got know said where midstream you the anticipate the got out you other and the that in see widen of market some some which year well

Blake Fernandez

you. Thank

Operator

Thank you.

the Our next Rigby of UBS. question from Jon comes from line

Your question please.

Jonathon Rigby

around capital side side my taking actually. CapEx transaction the question. It's of for the and Thanks the

will closes. -- the need think I to The wanted doing don’t might because intend got after that what indulge combination, look is I the something that start future it around is you at to high to as we deal be you as the attention first just about that about has explore think grading process we is in to think we that. enough

as you just proposition, confirm that the the So through management you of to do. delivered process there's to of that actually disposal value I portfolio that be can part whether wanted value see

compare not whether the the second be, is the can't than less, are can dollars which you type thing for identified Second have that about and would lengthy. maybe you criteria question with, doing confirm some thirdly, you'd then part you billion processes the rather the as the CapEx us kind so Thanks. give we things just And just somewhat efficiencies is you I around already assets you idea curtain little And necessarily underway? the using. portfolio a merge like same that of will be that lift but just of about transaction, of whether of thought that the that like-for-like. activities ramping will add The down those can if to

Mike Wirth

a well Okay, in there there, done. Jon. lot That was well, is

up me let try and for with to then frame And the portfolio capital. start that to you. come the I'll So

high got and asked look an we process at we've You where ongoing process, the about grading our portfolio.

to compete portfolio You over $X of We're kind average, billion to standpoint, continuing, high in the from a looking know, alignment we've of ability had on long same capital, us strong the in the ones allow those that returns assets to oftentimes for not and deliver And compete what the into sales that will grade time. the strategic criteria that assets to a always period $X be future. billion are, satisfied past. that may

mentioned expansion our if As process in was flagship XXX or XXX% years, day, SGI asset. of when our was a back our last you portfolio, XXX share people to upstream the I thought half. that that production took I you Tengiz SGP to It was about XX with barrels an real think go about week, from of X,XXX

out the of on asset were that And out sight kind Permian we most for the the mind way have was today. to people. we of So of

Australia sanctioned, none just And of shelf beginning projects our LNG LNG had not deepwater Mexico. been Our sanctioned. off of the Gulf we have were products to move into the been on

we on at If barrels that, share the outlined it when that way barrels is is a today, get to in close number. of Permian our to XXX,XXX way Tengiz companies you XXX% pushing we think a Australia, with combination its a basis, The producing day. the we're Deepwater nice is and day our on XXX,XXX share to its a it so a million about margins. of XXX,XXX equivalent half to doesn't stop two The day, is cash XXX,XXX on day. barrels

and positions ability returns to economics, that invest we up have have those have down drive of and in have way lots manage we depth four that So through that scale, length, that room. the have costs time. the now running strong have we And over resource resources and

than have had. a different would portfolio when it's So very we

scale asset the that Just lot one have and of required to smaller a ones to other we’re compete.

at capital the can’t still you're be of I assets length, resource determine time. look low you our it So and back… and really high rest and might we those compete for with return still over portfolio characteristics, offer for sounds the need will compete the that cost, to like take us, capital a hope Jon,

Jonathon Rigby

of that. apologies It's sorry. Yes, -- the the annual weekly the for timing classic test,

Mike Wirth

All I'll can be you so comply. quick right,

and as for get look resource of some we that on transactions. really So potential make different shareholders compete we what between in into value are as two decisions our spend that reductions companies indicated we spent. got to that offer we've the you and assets and we those over a will will in portfolio -- capital both for the that capital those the efficiency it should will think disclose The time,

is capital and is the the at time we execute down, the which intention while contracts into spend at overall Permian, look indicated in and drive to system also we'll So efficiency and ability the to more do. investing what our drive same

the in will ways of into we bring forward. will capital will we out find activity Permian squeeze value system, efficiency the And we combined which to squeeze So the system. combined will accelerate

Pierre R. Breber

on And company. and maintained guidance a add, to we a through X% just as combined to XXXX X% production

Jonathon Rigby

Thank cool. safe. you. Right, you Thank and perfectly I'm

Mike Wirth

Okay. I'm that, glad to hear Jon.

Operator

you. Thank

Read line of Our comes Wells next Fargo. from Roger the from question

please. question, Your

Roger Read

to ongoing guess, about people's your all you to attention together, integration Mike Hopefully, to think can your problems dealing in of in this, and what put Yeah. that, here that's do kind doing Anadarko here was plus of the And and like an Good be that process may end and they the through me the now. to keeping going teams and divert believe right background do then bid. bidding expect I terms up of having be stuff? managing things terms way the are on wondering do, with the team I kind there typically focused everybody focused merger need how them you you situation the I an hear don't of you you environment very morning. in in here any an unusual forward.

Mike Wirth

group teams we've just Unical playbook together a we've a that got this this and decade people. mentioned of sizable small Texaco already I few that people Look, And spent week. that And did group a a joint together. We a doing integration was met ago, years for before that. isn't they days put This multiple this. of

moving things. that of some and And lead have integrations. same people the involved have We eye people with ball are the forward and their those on focused so, on

moving we're boards. deal And a we remind forward integration been value. we've So can signed approved planning with that's just both to deliver by so everybody, got

Roger Read

here. side. luck the stronger on a Okay, good little In to about and quarter. actually flip Maybe the globally, We think saw lighter gas well, side on back on operations crude the that. the

of we much I that some had unplanned with how Australia downtime is in the curious LNG. Just believe

oil kind mix remain look while. into this you gas maybe and and taking some between gas dry for of account Permian a going for global the As into shut

Mike Wirth

number downtime that. part train Yeah, one do Gorgon. some rode down big And we the I at a in our work because weather came we've too an take think impact. Gorgon, of and bigger some about at also There's of mean, Wheatstone that's they see gas for that dry I through you will The to as There's and that some much. in so portfolio we Australia that worry create and trends cyclone both a saw was wouldn't a some slowdowns I primarily isn't we what had Australia and got now that. through a

the gas are those but really that hitting So the things are production.

Roger Read

rest on the follow is Wheatstone as if Just the look I could between real year? any there we quick, and Gorgon consider at that, of up we should downtime plan

Mike Wirth

normal of into at both be any The down now one train given in moving year. those. turnaround would plan only to Gorgon mode for have Yeah, we're

upstream in And quarter. on so standpoint, aggregate now in turnaround turnaround season plan begins Gorgon the really our would execute year. the The be from right to train this one a second later

for LNG the of there. the quarter third plants. normal You as one Gorgon with you'll probably one it's into the turnaround turnaround. and see TCO we'll because can third operations quarter, a into we then quarter as turnaround think go we're fourth the heaviest have at down And at cycle train about lines KTL But in

Pierre R. Breber

earnings I there's And the Pierre. will in provide activity heavy upstream Roger, guidance if we turnaround mean, generally call. this is

Roger Read

Appreciate that. you guys. Thank

Pierre R. Breber

Thanks, Roger.

Operator

Thank you.

Merrill from Our line next of the Doug comes from of Bank question Leggate America Lynch.

please. question, Your

Doug Leggate

on for call. Yeah, getting Mike. thank the you. morning, Thanks Good everyone.

hands raising but fans guys in checking guess, big There's letter, I the had Occi, speculation, some you a given in discussions to press to senior little perspective wonder their would your, could already their I are led shareholders that. they may of a increased on it's I of went that for are fact of the what question, a bit little point. Anadarko we you history perhaps offer bid your be in then some terms their want of And ahead if sensitive, know, done you bit have speak from As that of some here, been about. ask I the Obviously some a but your concern you what to and per sensitive how change something it's opinion if management. that may. as control that

Mike Wirth

be the all comment came and there Doug, of aspects premature explained me filed. when negotiation of for to any the SX our together. read on will SX that aspects in Yeah, it's filing, inappropriate the in deal you are the numerous it how to I'd this of is just encourage

Doug Leggate

to going Okay, one to I answer. knew was be tough a it

deal, your the to it kind Obviously of synergies if way it that trying. So move the like you what is Permian bulk laid are hit that not largely at of to I realize And specific that a from by change I'm lot very coming would future more bar decide all reason or is from due be not you high that it's growth anything a higher buy those 'XXXX some out. did but any is gas. post getting if that bid, issues. through Gorgon did forward of and really the [ph]. you've I to for tailwind event did looks things go unlikely, you you of that match does assumes to One of plans, question a and your significant My going then those to appreciate

deal, sustain buybacks commit So this just and you it trajectory able absent a how the curious I'll would there. for dividends? strong And I'm to to be Thanks. leave growth

Mike Wirth

our Board in base we Permian. Anadarko’s to produce not just XX% may out. how liquids tell that I'll Yeah, going in plays I'm speculate on case, what the do and you

sustained our as buyback industry any program not price with intend grows. we initiated commodity primarily margins we a reasonable to that that gas. through indicated the that production we've environment. So see cash And it's expect stick leading We've to

vein distributions the what about. to you're so shareholder there that support not talking in the here cash risks are And of would

out So we're laid our deliver. to very the plan and Doug. Thanks, confident ability in we've

Mike Wirth

Thanks. luck. Good

Operator

you. Thank

Our from the next question Wolfe comes Margolin Research. Sam line of from

question Your please.

Mike Wirth

Sam. be muted. Might

Sam Margolin

hear Can now. you me

Mike Wirth

can. we Yes,

Sam Margolin

muted. Just

We've TCO that. to topic on a a Sorry have about for lot been a quick through I question a got topic I've up question. the earlier. Pierre, already. Anadarko just follow the

at it's cash to Chevron for, for that's dividends. or know, co-lending the a You flow as what cash happening if have of the planned that theoretically, is taking to Capital surprise time net broadly sort But keeps higher like does And preserve commodity of same was the prices that than part it's program does it's a sort program, into example. Chevron are TCO up cash level to authorization the into what rotate do? things the the and your TCO Permian, not dynamic as decides then other Chevron follow-up, at just if of former, outlook like incremental free flow headroom like then if Permian,

Pierre Breber

Yeah, capital, we the how thanks. financing doesn't impact characterize No, capital.

in what is capital that's project. the invested capital. be the is So affiliate going Again, to

loan. and more thought within there's therefore non balance you dividends pull to on and were clearly investments prices So is is higher than are paying making cash where capital. easier. I going can cash might generation And is TCO if their the What you ability less vary

the financing of it guidance subject we're and is level but are to again, happening of So level prices giving -- that on investments the dividends.

decrease them different case, it company, affect lending flow the case, interplay. flexibility to cash But of borrowings stay higher, not CapEx. the either that's parts But prices that those are or shows the in of the cash In than to the dividends. more up in increase more either if All or longer either does in gives statement.

Sam Margolin

asking was guess sounded TCO else. case, it which it's got co-lending, and of I it there dividend, inclusive but like not, why was affect the still that's because surplus is the self-funding wouldn't uptake where but I a yeah, they in Okay, outcome cash, potential anything like you've

you right, very much. All So okay. thank

Mike Wirth

Thanks, Sam.

Operator

you. Thank Cowen. for of And question from Gabelman comes Jason today our final line from the

question, Your please.

Jason Gabelman

now, there, it's ask call. covered production how similar a is been kind put going I the what to institute you want the tried in my it like production wondering, of any, in on if side, ask I'm to do because your Anadarko, as deal, taking of footprint rule guys a in the are portfolio regulation? California have Colorado state both see actually for change potential the refining not bill on process you of goes big kind to thanks right and in risks, seems a oil the to Thanks. relative to about state, question. to what what's on on Yeah, to setback going the in just I'm given forth. Congress reviewing the the that -- about pretty side,

Mike Wirth

Okay. Jason. Yeah.

for It's activity. So going on is it Colorado setbacks all. in in is is analogous referred right and regulating industry -- impact California XXX of what has now, assembly and to you aggressive wouldn’t pretty AB primary ideas at our downstream is the what think has really to you on concern been the which

trace company in LA primarily the LA historically the and tends which our Joaquin where California is, of Valley in San same of of the portfolio be back is their Our the an area a lot and not way populated industry the lot into it was basin is a where the to way basin. roots there it's

activities And to this. of much and is and there commercial populated schools cetera residential what's suburban land-use about really densely more a et drilling so urban the concerns proximity metrics you behind got

industry are we're the in well. closely they others impacts, with and to ensure associations working So state understand as trade government

legislation here. we I it's basin. impact doesn't that producing And in permitting impact heavily a so of prospective is state things were It considered business be less big are likely and into think than part already that the being get really is for would concentrated wells that's online portfolio more if new impacted today and our production then LA in that our the production

Mike Wirth

I we top about Okay, on everybody's the here I thank busy a you and are think Jason of hour the very Friday. know much. right

Jonathan interest time call to and everyone thank for your back Chevron to want today. today. in your participation Appreciate you. your over the on So

Operator

first gentlemen, conference and concludes this earnings call. quarter Ladies XXXX Chevron's

may now disconnect. You

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