Chevron (CVX) 28 Jul 232023 Q2 Earnings call transcript

Company Profile

Participants

Jake Spiering	General Manager, Investor Relations
Michael Wirth	Chairman of the Board and Chief Executive Officer
Pierre Breber	Vice President and Chief Financial Officer
John Royall	J.P. Morgan
Devin McDermott	Morgan Stanley
Neil Mehta	Goldman Sachs
Stephen Richardson	Evercore ISI
Biraj Borkhataria	RBC Capital Markets
Sam Margolin	Wolfe Research
Jason Gabelman	TD Cowen
Irene Himona	Société Générale
Ryan Todd	Piper Sandler
Paul Cheng	Scotiabank
Doug Leggate	Bank of America Securities
Roger Read	Wells Fargo

Call transcript

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Operator

Good morning. My name is Katie and I will be your conference facilitator today. Welcome to Chevron's Second Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' remarks, there will be question-and-answer session and instructions will be given at that time. Instructions]. [Operator

this being reminder, call conference a recorded. is As

conference to Chevron General will Mr. now of over the turn ahead. go of I Manager call Investor Spiering. Please Jake Corporation, Relations

Jake Spiering

I'm second Katie. you, earnings and Manager Welcome Investor Chevron's Jake Thank quarter General Spiering, to conference XXXX call Relations. of webcast.

Wirth, CFO, today. Breber, and on are Chairman Our and the CEO, Mike Pierre call me with

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

other forward-looking Before contains and we begin, estimates, statement cautionary that be Please presentation this statements. on please reminded X. the review projections, slide

I it Now, turn over will to Mike.

Michael Wirth

In thank Thank on distributions will and next few financials, $X you, retire more capital the share changes, Jake. return us everyone, And senior Pierre's on XX% details we shareholder including you, year, greater week, along quarter Earlier billion. announced leadership eighth a several consecutive today. Pierre in highlights. included this of more with to employed record which joining than for second than plans quarterly for performance our quarter another minutes,

to to the making Growth TCO, we and including activities, expect is up up a third to to track the to with low-pressure FGP by major completion begin In and unchanged. is mid-next fuel progress gas mechanical for late At pre-start introducing new schedule turnaround. and quarter, commissioning Project facilities. good complete start we're the Cost Future field and on guidance is expected of year. Conversion from high-pressure this year

greater cash expected day about us completion production than Chevron these XXXX. of Brent billion project and the After – within at $XX which – deliver of million per in We of the $X equivalent barrels have is total TCO unused confidence free share generate that X gives complete flow we'll oil contingency projects, budget. to

quarterly production the another quarter, X% the record second in Chevron's previous about high. Permian set above

guidance. quarter's quarter, track again growing full-year next with in roughly be production on expect the fourth our We to flat before

in on our our performance three well put is XXXX consistent in In at all production areas, wells. company-operated Early we've assets, plans. XX Mexico, with New

to with year-end, wells XX expect expected we rates. Before POP production additional an higher

Chevron's As company the Permian production half production. balance a reminder, and non-operated with royalty about operated, of is

is our large on we're well resource expected focused base is one unique, production. measure, decades to of value from performance that maximizing short-term While high-return deliver

expect production Over on growing while the at years, capital free over $X next XXXX in near and wells, than five XX% develop net we delivering X,XXX $XX return new flow Brent. employed greater billion cash to

that a term, X well decade. support Longer identified we've economic than through end the plateau million barrels greater over per well locations day next net X,XXX of

Our for deep advantaged and flow development years to expect position to plans technology resource as high our come. returns, to free royalty inventory optimize improvements, for we us allow deliver strong incorporating learnings cash and

is Gulf floating first deepwater year. of for In Anchor the at production location Mexico, oil next and unit remains on the project the track on

continue We exploration success were round. our the of recent number lease highest in and blocks awarded the to most build on

At expectations met Aphrodite Leviathan, we've per to X.X BCF a we're submitted Eastern concept Med, appraisal government. well the pipeline our nearly development our the Cyprus In to expanding capacity in and day.

close to August week. expect vote shareholder We next acquisition Energy after of PDC their our in

employees on to PDC's forward plans welcoming we working to integration are and teams Our look talented Chevron.

Now, Pierre. over to

Pierre Breber

paying investing cash budget performance shareholders and to down As record debt. within Mike Chevron return CapEx financial quarter, said, strong, our consistent to also this enabled while

flow tax due the capital to lowered payments primarily cash outside Working US. true-up

payments, capital movements variable. Excluding tax are working

year draw the in second half Our to working the is capital. down typical of pattern

during run Surplus cash the sheet billion, at on debt balances end to $X.X cash well Chevron's was the cash guidance ended net at with low the balance above X%, reduced required quarter our quarter, of ending significantly ratio below the the the range. company.

billion tax $X.X offset versus and primarily down were favorable quarter year. second higher includes income realizations, lower by to quarter the partly Other Upstream were last items investments. mainly liftings. same Adjusted earnings from due Adjusted earnings non-equity Venezuela

Adjusted OpEx mainly up Downstream costs to inclusion due transportation the of higher REG. lower earnings was and to due refining decreased margins. primarily

quarter, adjusted earnings down last margins Upstream higher with modestly, decreased Downstream higher partially Adjusted US was realizations. to million. earnings lower were due with lower tax offset benefits. Compared were volumes. offset Adjusted partially were $XXX earnings by in the production This down non-recurring primarily and

mostly from due was in in of day Canadian Permian. quarter Gulf at was the to growth about turnarounds by the Second associated This barrels production oil primarily the planned XX,XXX Gorgon with wildfires. equivalent down Mexico last and offset per quarter, downtime and

this ahead. a have Now, TCO pitstop turnaround Gorgon, at a we looking week. In earlier at completed the planned third and planned quarter,

Our outlook the guidance the low trending range. annual end full-year production near is of

which expect Since to August, fourth to low on of After dividend from billion July until not not plan solicitation We Full-year PDC's permitted shares. close Xth, acquisition in we buy guidance. expected the quarter. we've proxy quarter. resume are our the rate, our the a to fourth dividends we been through near we affiliate buybacks expect do at continue $XX.X the end back be annual TCO the to

to it together, delivered and shareholders. return execution solid Putting financial continued all strong of we results, with quarter another project cash

is results. in consistent you and that our actions approach and Our see can

Back Jake. you, to

Jake Spiering

concludes That prepared our remarks.

and your one one question take questions. Please to ready now yourself to are We follow-up. limit

will questions get do to Katie, all the your answered. please open our best lines. We

Operator

comes John question Royall J.P. first with Morgan. from Our

John Royall

the of end production. is us maybe midpoint on Permian you first Sounds you My low the like is to that mentioned Upstream plan. on in the opening? production bridge Can guidance your the question from

that midpoint to in come you have of plan pieces what end? well to move the below So

Michael Wirth

unchanged. remains Guidance

downtime move that. things to impact be midstream we our of Canada impacted did I it production not processing of that a ability been operations mentioned has able There's but Permian in se, The our and the that we to on lower things key some been seen. really expect of, Pierre as basis, production end strong. market. per to some fires that have are weren't And evacuations precautionary we've was we think the We our at said, that

is And oh, is other the I it too, the one. guess, Benchamas rest of – and

Thailand have that FPSO incident was and taken the year off early We in station. in an an had

that's barrels for which so day And off XX,XXX a is foreseeable the net, another or XX,XXX future.

things really us so, ones that And were those that the are it's both pushing are two down unexpected.

John Royall

XXXX think Mexico? in My developments but us next Maybe results half, a terms just is single strong production, New New in but just you a in The on look Permian. of the can bit in question bench bit just just well sticking very you're on innings you the Mexico. drilling to the first in optimizing what below update in still generally

Michael Wirth

POPs I in we we Mexico in is are that showed bear to it's represented thing quarter that think important POPs there second The the New there. all or XX there, mind XX achieved type that only curve

So to there's data no on make see quarter you had first enough into there's the POPs. the curve And seven that it only actually chart.

of a very thin it's So data. set

We in that expect the curve. the so the of this of is XX more representative POPs not those of bulk second program half year,

couple there's productivity. have other we And limited one some did constraints of had a things, full POP facility that wells have that the

a expect the Mexico productivity. higher part the party able rest facility So haven't third in of different New production move the And that of is some to actually all faced. we of constraints to the where we the we portion program been due actually Delaware,

you a thin things. it's not to So, the of But with in dataset a more come of data caution over-index I'd combination second on the very lot half year. a to

Operator

to next Morgan go We'll Devin McDermott Stanley. with

Devin McDermott

talk And gas, then you you topic. seeing goals, I NGLS towards you could basin disaggregate longer progress was much on there. is we're the stick uplift how a as bit little mix term with you how the we from the you're around And if that oil. the the wanted wondering similarly, productivity gas I trend to expect little just of for further, in you if Permian a NGLs bit just over about since talk production trend and to time. mix your the coming oil, versus that

Michael Wirth

oil we the commodities look primary been optimize views And XX% Devin, a it prices you for roughly the for bit and to different basin, at benches, that little gas/oil but oil, of about see returns. don't ratio of Across XX% so to in think pretty run our to have oil, it production We we you long remains the and aggregate the And can markets relatively gas. for gas flat good vary drilling – – changing and basin, years. a the number own take it. term the optimize in NGLs, all the It our cut. economics can still NGLs XX% our we're way has portfolio, parts on XX/XX/XX a lot. a whole remains if

Devin McDermott

to positive development moving the line. the year-and-a-half get Good to lot to wanted as as to I a TCO. two we year, online. closer hear progress pieces continued there shift of phases get There's the of the next over we over finish

impact guidance and the quarter a wanting that then for XXXX to XXXX, XQ. the to talk this the was give production fourth little year more through we rate. of evolution see how about You of you bit as turnaround get run the I into in

bit a it out look over the shape few quarters. next So, us for as we

Michael Wirth

no cost schedule. and is change to The headline here

important. In the we that's think really quarter, I progress. really second good made

important the facilities project XX% gas the to an enable mechanical complete. which FTP. and the three on-time and achieved of two-thirds quarter, is essentially commissioning said, completion of system, we flare fuel completion very injection, As gas second into we is In startup GI, got

Technology to In steam of a utility startup facility, work the the also, the begin field. convert WPMP, us are the at Komplex Growth boost third that across quarter key enables full of we or one and Project on mechanical of is required expect start which we're that from low the completion of driver a turnaround the pressure up the other Future now, high systems, for KTLs, quarter, and, system, of pressure which to lot boilers, will in Lines, pressure utilities

quarter turnaround that you some will in impact. and third the production see done is Once

that. think guided to I Jared

part conversion have to of pressure. compressors of that stations online, begin – KTLs. so of conversions sequencing pressure of next the is for months get at high will which one X a activity to XXXX. that one two started the four and metering low There big for year expect the to startup to us two to XX in all We of will year. XX will be end from field, of and initiate more turnarounds, those carefully we'll as that well, turnarounds It'll this at bring the of SGI a occur. barrels the all pressure choreographed the allows million one take And very boost turnarounds full that day of And another

bringing indicated activity interlaced on turnaround the a activity. in see really field. of gathering of you're as This the Day, we of We're our project capacity not as what is XXXX reworking and normal portion with at going the field. startup new XXXX to as So, all entire the Investor is and simple this producing

of activities so, And it's all complex a of to quite that. series execute

And I production next kind you reflects for we a some And put, year. think, chart of so, both that. give the year and this guidance to

Jake Spiering

in from our has Yeah, annual no set XXXX, XXXX. XXXX, production, Slide guidance. XX change that

Operator

We'll go next Goldman Sachs. with Mehta Neil to

Neil Mehta

to in stay while XXXX, want free in be going there's probably as there cash just inflection And TCO. volume on CapEx I first. XXXX, a a rolls will off flow be affiliate inflection to

cadence of And dividends? it you the about in manifests of so, can terms how that itself talk and

Pierre Breber

as co-lending cash we're Yeah, those you filings. we've that the in cash course, And and this dividends, because our the we in Brent the SEC not also $X guiding loans because flow, – $XX to it's that's Neil, year way. is the are done of And, free billion the to the XXXX. of free Pierre of been of guiding flow, along have loans – disclosed it's repayment clean recall, profile just

to down. billion continue that $X see will were year a this not $X.X off. we billion trend into to Exactly just that was year the your has long and down CapEx a point, $X that's build billion and as our It share rolled to ago towards to you'll project the so investing or

that point. there's So inflection

TCO said, are in been being managed, those holding so of it's be to continues on And as vary. cash also prices course, conservative and What's balance managing sheet. sheet, its the balance we've commodity more

very project expect reliably the running closer come on. almost is the for end, we gets to as cash a year-and-a-half, to demonstrated As we've of now that some that TPC

of And see that'll And a in flow front board some into the years we that on of next as a surplus that we of in shareholder dividend a that's release expect balance to of in But It's than billion continue as sheet. saw much XXXX. separate the company quarter fourth a I been can't expect, are get we the $X we couple free in. over said, held cash we that of we bigger TCO. directors in XQ. cash of So of the head

TCO price maybe And last that know thing, really good the Neil, has you sensitivity.

other So cash I've XX% seen flow yours is even or estimates, stronger. the and XX%, at

Neil Mehta

The of on the capital. return follow-up is just

I buyback viewed of environment. think lot of in range, the PXX while dollars $XX.X as commodity your a you billion price market a have big kind have reasonable participants any outcome

And a unless sort commodity so, of more flywheel and fixed as thinking less of number wacky. a it prices relatively go like

number Just any and more a opposed bit more to us thoughts trying around give that a as on volatile you're that whether statement to little number. surety

Pierre Breber

billion Investor $XX showed is to that billion. Neil, cases to range, there's The $XX roughly, at our we tied So, the upside/downside Day, right?

case. of prices a in course, years downside for And case couple that that there So of sort gets you're wide mid-cycle range a years. between, there's case. case a And reminder, the it a as downside $XX stays because of of range right. and three wide in to and between upside a It's a reflects

So the that is buyback that's downside range And is of end tied a what to. notionally the real low case.

that's different range the year you're buyback the top five what about period. And to too now. period. It from trends a over billion not we're very at The It why down close dollars. that's is a the case towards the that the averages $XX.X to upside seeing $XX of end of end seeing $XX case

steady and across that, So we of that again, it's commodity it. signal being good buybacks feel a look the about cycle this as we certainly out a think we as cycle, over

the larger we much said we but and that across buyback, So cycle. be not steady, want to could do would We're procyclical. a we to be don't trying be

guide number buybacks, yes, for of guiding with years on a the intent cycle. across of so, we And maintaining we're when the it

Michael Wirth

more have balance to remains add, to very problem order sustain you through quarter program. And would that putting our low. that very, sheet repurchase very towards indicated that back and don't share our a I the range results the up debt multiple gearing debt get just times back in in we've to Neil, on we've guided a second the see net cycle we steady

Operator

Evercore Richardson next to go ISI. with We'll Steven

Stephen Richardson

little Mike, bit I energies. was wondering you if a new could about talk

I these of transact recently. big think from lot EUR you've businesses. We been part that saw a consideration beginning build versus pipeline buy a COX clear of the the company and was in

about as why Chevron? build So maybe you and you is maybe the buy view business can the talk it a choice little versus CCUS bit better for

maybe Maybe I Bend should could of bit a get on ahead of Bayou update it with a give follow please? an up you as little us

Michael Wirth

that put together renewable expect in I and I'll to energies. do new do two build would those think, actually. fully buy, we'll both in us I fuels. Look,

Group. but We then acquired we also out business, have went Energy Renewable a and built

I So you'll both. think see

a presume is transaction Certainly, Denbury. look took market the Denbury And that you market at somewhat had that probably with players conversations one the can anticipated. or multiple

further part delineate potential acreage in drill the metric and the of onshore geology of than Coast do near a year, concentrated of and the pore we've the year, that the acreage CCUS, well acres or The we we're drill Bayou of the strat enable has tons. And and for space, onshore For second strat things. subsurface. have support these the there business. in to we right emissions well policy half Bend, expect greater have COX got about We've of both good to In same. a and storage permanent billion to going got offshore XXX,XXX In pore offshore. Gulf areas this in space, characterize a to us, first all X next look they're

with term you other potential a sheets number Belvieu, conversations that evolving. Triangle, at in need. is the a and commercial customers. for in of Golden with in the on back going And the of pieces course, forth. Mont we're negotiations this got framework the in way We're of different across still And number we've region The working all And customers Houston up Channel. we're Ship

with us there's So assets, number have we've who's in at permits. approached own well. way operating we providers, way they're for a got midstream. We the right midstream look assets and consistent of to RFP of the that midstream strategic. as go building out with to if If midstream classics, a business injection well an generally And infrastructure, we somebody the certainly now,

and kind So there we're do putting We organically the of we'll all build together pieces phased like we'll Bend for to But where development. question, the your makes it Bayou a And more. inorganic, report we'll project. underlying sense.

Operator

our question with Biraj next Borkhataria take We'll RBC. from

Biraj Borkhataria

on concentration. My first portfolio is one

cash barrel. $XX the So from slides, flow over at come a at will through billion free TCO. of Analyst plus medium just roughly that today's talked you the of half in about your looking term Day, And Permian $XX

to I So return, you to highest a of is portfolio can go you level want I quite was to concentration that flow. concentration completely dollar major if super is have level in free which every unusual of for it understand because But the sensible. of that talk terms about wondering cash

So about trying topic. different something this got is how you're a think you to actively portfolio follow-up going forward? a address And on And diversity? do I've

Michael Wirth

and back don't it. We that are Biraj, And be of diverse We we've to look be a portfolio. just of if the the that scale, at kind we management to end the want our that long have need of diversified portfolio. have had want decade, for tail got assets a lived. But of to assets and the diversified. you we sake up resources. smaller last were We've that material cleaned lot time pulled over and capital

our at feed that are lot [Technical LNG in positions look drawing capital right the which acquisition a LNG EG into Europe. start Difficulty] Far of aren't but can and the assets can You in now, Australia, East in

Eastern The position. FID and for taken is TCO. and projects working submitted on concept tomorrow, Aphrodite. a on are very a Med mentioned you We've strong Leviathan, expansion Obviously, recently have

that opportunity So of lot there's asset. in a

got PDC, in a we Argentina, in When talked Basin. close two other day about in assets acquired We've Middle fuels crackers one Canada. growing we're business. be the CPChem East. tight renewable are our We've shale of our XXX,XXX the some underway going barrels online producing in We've in US, the to and this of DJ in and come middle one that REG will decade,

And I then, a more Ballymore. the last have twice lease of we recently lease in portfolio. Whale, many leases online Anchor earlier, eight mentioned the sale So than over as have Mexico. And also we we – across exposure of the course, projects Gulf in recent years. large this the leases coming biggest in acquired as sale

So in adding position our Gulf to Mexico. we're of the

a So this great They're think company, and up inspection. idea TCO, lot stands so to lot of assets, that careful get two and attention, other we've of portfolio. we're Permian got the our in assets really asset but two a strong I don't they a

Pierre Breber

capital what not record buyback, just of off us only the Neil track dividend can on confidence and on gives to growth. but asked that I that go and build the the If return that's question of

XX% to all free annual businesses. guided cash we So, flow coming from those

Some some shares buyback double of outstanding And that where years closest last we covered. cash nearly rates and over X% are annually. five leading our and dividend where constant, that others, flow have a is growing Mike the cash goes growth than we've at dividend to grown higher peer holding much our that are the

business Our $XX. is for built

you quarters, little we've currently, been ability the working quarter, than seeing. our probably four if – part with the the look capital that adjust you margins look strong last that bit confidence at actually breakeven of and lower So a refining it's our if at in this for

flow our this at buybacks investors built is grow rates prices. That to very leading rates. give to dividend we're to going should lower the for from base. in ability at grow to confidence cash continue high and So Free also maintain

Biraj Borkhataria

Permian, over to have in lot Just producing expressed Through you following desire a LNG. up and gas grow on the a a different more time question. you'll be

in sort to lower. of through of a with you've the asking ask So, integrate markets. offtake and noticed feel wanted I agreed. owning and being the synthetically the is you'd players you the owning an about typically companies whether Global, of the of number they're be benefits are interested peers – offtaker But global then to couple agreements the chain. as liquefaction deals value in or past, your argued that integration offtaker you've to Venture gas actually position And not an signed of signed have I'm returns receiving because as enough interested such have in whether question particularly a think I as some gas because US now your

about So thinking LNG. it's interesting you're that sort in how value of chain

Michael Wirth

captured be value described In into not other off gas and midstream return to It's consistent drive that, support of assets, In model capital but and it. will returns. we've think value I very it, with model earlier, higher our of capital lower aspiration a the helps sell the got of done on can you've economic that the we need gas some the offtake the the That's you we to certainly in depends that. that It can circumstance. where chain that you've an remote people participate create what in us you've put chain. intensive and portions into where gas can supports where we've got places you entire investments, locations other

unless that with necessarily we not of control operations, creates have in have have and the high to confidence have and people that good work we we'll them the reliable We to assets reliable to differentiated we you value with. those looking you carefully a offtake provide to own have operations, closely are the with it drive for have companies Now partners, working really we're vet to but proposition. returns, sake

Operator

question We'll Research. with Margolin Sam take Wolfe our from next

Sam Margolin

on it down, would half. cash there's that some like, rebuild help nominally, feels It the theoretically is inputs question in balance. looks drawn it's it the The but second

program And TCO think You've got loaded I very and third capital capital going quarter. working dividend PDC to had front is in too. pay a a

flow. with cash free So, that's coming on

or think going be the to cash phase you we're for balance the XH? level and about rebuild in wondering a how about if just So

Pierre Breber

it direction the factors. of Well, that margins other of number a prices and course, depends, on goes commodity and

come right, working You're our cash in to debt. paid also we've down down, And levels due outflows, affiliate of timing some capital part dividends. have

certainly goes term. been, in the think, that don't short surplus we program. over going We've our of ratable want clear where not returned hold and that that shareholders But, the permanently, I to this it's dividend cash form time, cash very to the be to in cash, growing buyback is

only need support we our We're operations. nearly quarter. billion to second about the billion $XX So $X at the of end

than So that's more sufficient.

We have debt. access have paper to Again, don't We paying commercial been any lots of liquidity. now. we've down

So way showing. that's down been we or efficient goes sheet balance all inputs the cash And there. manage to the economically balance more on up outputs again balance the and we've the the if that whether depends get

well towards debt, debt Mike said. of The guidance the end net below the our guiding is We're as low net range.

adequate So, the to $X those we cash that'll operations. be look if at factors. head down cover billion, to all balances again, And

our tend of of capital, A capital of in see certainly second seen half of half payments draws this going recover is what earnings But portion from we big year. really not tax to on first tied working last are first pattern we year the year. working some the saw half on this to what On year we've to that we're the the it.

can you offset think favorable we year of being So as from working where environment. those last had of kind capital that

We along had effects. tends way. through are downs timing average look But Over the due. taxes them. and these zero. We to over time, just So, capital knew out there'll we working ups be

the sheet. that's part so, as planning And we all the look balance at of

Jake Spiering

quarter. the quarter. I that guided Sam, not dividend do the expect TCO we've in dividend a guess to third We fourth a in

Sam Margolin

of the low the side. a carbon there technology the lot was follow Sorry, from on the CFO the But front, ground on question on And incoming have The organization. spent up is Steve's carbon an in role must that sort the work I low and where time It's misread had ESG a role. to actually earlier. role of on follow-up is remark. a coming Pierre some

so, sort think when interesting at And the differentiated carbon look finance some marriage Chevron this really and of between I has of that low is peers. you

progress capital too question place you going other And think that ones carbon embedded to return areas? ties are highest we pivot? a because the development, like through make is carbon feel as is, there incentives Or that you're where maybe transparent? low into pretty so, seems do the in where the And capture are like I the

Michael Wirth

I our is question think kind got a up Look, and started kinds team, people of to new people company we've higher your investment roles. this across entire carbon, of move priorities leadership role the at and ended and in But today. with of different through driving the lower returns energies. commitment part every in

a the part of it's to. business, something it's So, we're committed

gone new unique on our it's that want do can there's basis chains, we've that why as things bring leverage assets, is, solar and in into anything a where to capabilities, not there. focus Our we because create businesses. It's can we others don't on these said we've unique energy wind before, value customers, to merchant really and sustainable, advantage competitive

and renewable generating Our cash. fuels business profitable is today

next more the expansion We expect to diesel producing and start Geismar be year. up renewable

is that feedstock business that's and continue we got last quarter attractive, a grow, particularly back We feedstock to side. an economic that's a into of the some this acquisition and today So, small interesting company announced technology.

and with technology, do built. out the we as there. right on building that that, it right parts the We some obviously, I Bend. business, the projects working well. business other we're today But world And and we're about, environments capture as an opportunity a storage, of in believe policy Bayou do model is assets. in Carbon being talked there is

US, and one with support hydrogen carbon paired working can certainly capture development both that's hydrogen electrolytic there. we're on, Other things and traditional is business models IRA that In of the hydrogen incentives then the storage. the

we we'll at on area always this. you should We're us think new consistent see to the area I the expect primary stay So investing. technologies, focused with but looking is

Operator

We'll TD with go next to Jason Gabelman Cowen.

Jason Gabelman

I'd like to kind minute, questions detail two for I go could, on and the Permian if this. a back of to

highlighted you from deviated budget CapEx in the at all Permian has First, at that the that $X Analyst Day. billion

the And would term, second those the tier year you and what Permian one? plan over part, long locations inventory percentage categorize of as on the five

Michael Wirth

Jason, one, drilling continue we've Primarily little year. Permian to seen CapEx performance bit is up actually our to three a improve. things. and this completions Number performance continue improve

we're of out more water, done, tubulars, rigs means same completion the more you and more more which consume cetera. of spreads, et work sands, So getting fleet

So, of that's kind thing. good a

lead some elements longer some the critical of in seeing We're times facilities. on

we've then, were next careful long didn't water. manage handling issues. trying scope and lead make increased we're we we some had these of some facility in for for we've lining purchases that actually program the as seismicity so, as And of being to areas to up program. We're anticipate particularly more more Permian, induced And year's some removing more year's water this

has we with all Not of to led there. the inflation been inflation lot being activated that CapEx. largely with increase rig fleet expected. The and has in is a had what line some so, And what in in line we expected

do second broken a way that standard tiers. our of to definition on very question on a of Your inventory, kind not we basis. that clear haven't portfolio a There's and into

on window, environment, we see It's are for that as it's the I drilling locations historically environment. to economic to X,XXX the which been price economics. a By locations really has outer got the those super got get time that even today's based So we've number expect we a see based the a based or that locations may term our grow which than on not different fully that may we'll when long can and allow time window more technology assumptions. economic further. in And different view. on at that price we've we've price are aggressive view outlined not guidance And indicated, future, technology. there,

we the than So at it in development tiers. of the more economics terms look of

Jason Gabelman

kind made production startup quarters. follow-up, to you you showed four TCO, impact able quarters the going some back My just you our over to all comments maintenance the activities? over effects the quantify graphically, these but and four on from I are next of to next actual know it And turnarounds

Pierre Breber

annual guidance annually. on seeing of provided. it included we'll we that the do and giving third continue we sort guidance to in Jason, Like, TCO. do quarterly it's quarter And you're that quarterly. We're

all there. it's So in embedded

continue of I a that But think it annual incorporates there's showed that. you we that quarter each just guidance have parts. all and moving we'll of give lot guidance to relative to But XXXX.

Operator

next Irene our We'll Himona take from Société with question Générale.

Irene Himona

talk the so evolution in is My in you chemicals expect can the third performance and would second what of Downstream, what terms the your in of if in then you half please, you're in the seeing particular the refining weakness then, margin first also And of question year, on QX the given quarter. affiliates, in QX. around far

Michael Wirth

a a short we're we're some where be that And in cyclical, knows. in to there The see chemicals to to the due think the length some olefins in sector. term, facilities. now period weighed in certainly There's newbuild seeing we We're tough business is on pretty length supply continue chain. as everybody that's margins going

middle this recover term, demand Longer will come of this to see mid-decade and expect and better we supply and as you part out the beyond, demand And will those towards to get and margins out continue second grow. we'll decade. into balance,

capacity softened refineries come begun up new system around and sorry off major that the that they strong start were question, second to very seen come come the have Certainly, chemicals I'm some projects been we've was that big thinking have Your so Refining levels at last margins, online, about margins refining There's or year. there. yeah. margins new year-on-year. world, some into the I have

a better in it's than up off the the rest little the more part little bit Certainly, that the from value world is important. Coast our refining marketing because of the cut Coast or both the West Asia. Gulf is Coast margins, bit a chain, held and the a West market portfolio of in have

to pretty strong demand there. so, out be continues And

demand bit, is continues Jet maybe demand has come to certainly demand gasoline Diesel flattened little a out back. but strong. Our holding.

And we're an the in the parts products would world. of so, of in the end number a expect I of environment lower inventories where towards

at as the I least. half think second the year year likely be are refining as of first this the were margins in half for good to of they

Irene Himona

Leviathan? following wondering, continue to for the options it partners Based being Or for FID example? Israel, examine for do other pipeline like the your on the in that I time is FLNG, was for that,

Michael Wirth

continue other options. we evaluate Yes, to

Leviathan, to and continue at is a LNG this concept year, that fact, the concepts expansion of end we working next look select the towards In one we're floating of ideally, for at. the of

Operator

next Ryan Sandler. go to We'll Todd with Piper

Ryan Todd

conversations. up on Maybe earlier Permian some could if I follow

But but some half expected. done you little approach, of that what know well year? are you lot the that to on What you versus some that of seen Mexico a overall in a talked first you concerns performance far Particularly, disclosed, of date about spacing, performance. of bit addressing the multi terms of in results cetera, the terms have from much I New You you've data, regarding basin, well year? have appears you across performance it on learned – showing as of improved the bench this last don't wells et some have single so addressing

Michael Wirth

is – some to performance we party couple other expectations Ryan. and remember. I can really our constraints, well. infrastructure we things some Investor this Day are in New at our a that, got with Mexico, and There that have what mentioned as The we've consistent year, earlier parts that of outlined of portfolio third in just saw earlier our you and

So there up and just are a on not necessarily of will things – that performance. well the that curves reflection geology the these are show

the development those because well our we strategy there reflected thing put everybody to continue We're we continue cetera, important to profit as the not And likes We're optimizing optimizing length, – change be out well curves. returns. spacing, production. is it. production these production will loading, really on is to The see in that et

to fluid investments all to we're harder drive production. looking returns looking It's see And mix, to. we're you're so, at parts things the you are EUR, for that just important of optimize capital what when all optimizing to

the performance program. high answer evolve in line we've to The level continued expectations as is our with

Ryan Todd

projects, of years. those some of contracts, Maybe escalation kind an years? as requirements across string development of deepwater Mexico, trends to you've turn exposed are look projects, costs? mitigate you CapEx next do the we you you cetera? and drilling impressive rigs project to over et over your the How the if how As under cost have costs I Gulf think over across escalating much as we in got coming able of startups few deepwater you guess, we of Mexico multi-year in next about are locked Gulf to few those think portfolio,

Pierre Breber

a were time. projects contracted at different those Yeah,

So pretty they expect. well reflect rates, – Procurements locked you'd as projects in are along. behind mostly far us getting as as we're

So locked rates existing in. capital to projects, but new that's get exploration some the exposed activities, of the for that, on largely major higher we'll rig

Michael Wirth

contracted under into contracts in the were environment. different came three with rigs back year that a We

Operator

We'll with next go Scotiabank. to Paul Cheng

Paul Cheng

to in a two Maybe talking submit you One, a us you're we should I bit Cyprus development in questions, if could. Can timeline? terms give about of the going the first what little What plan you and also, discovery? going the kind the what scale? to is look development And that's And expect? the that oil? of of like see design preliminary time it's

over second an The thinking What Argentina. about, pretty us you the be to have that Can government with And haven't is development. much there. update? And, a seems there? you question your there, shale position over give talked excited you oil

Michael Wirth

But gas. is we way our it of us Paul, in the that, government a be anything the little government capital We've and it's to the all to infrastructure. year. to could market to to get really development for out into via Cyprus, approval lay the this well. their on we're later a take involves recent existing gas But pending with submitted plan subsea efficient If this tiebacks first outcome FEED approval. for we pleased appraisal early

So as talk you one. approval process, about get through back get the we'll that to the we to timeline government on

the work There's that. El very We'll part up. got with an Argentina, that block, more be there. where the country's right positive But our going Investor capital But its to kind remain that It's flows talk growth The challenges On now. particularly Trapial real area some now some it's Day no facing beyond. about and some the development of we coming with resource election on there. doing of story. macroeconomic that you we increased we're changes to at like

Operator

next Bank Doug America. with We'll go of Leggate to

Doug Leggate

like Is up the in How five next My about the got first the question you've wells ratability. think to hundreds years. on It POPs over couple that activity? is X,XXX we sales. ratable? a looks of this, should Permian step about

Pierre Breber

Just include non-op POPs one of thing, more POPs, it'd our half and if is XXX. XXX. you portfolio be the were like again, net coop royalty, to is But

and just the well all data looks POP was the years, it The X,XXX term the company next long more over So operated. five consistent. inventory, the activity plateau the on incorporates in of

increase, as not some large it So as but looks. there is

You've apples get just to apples. it

Doug Leggate

deal. type of They're or year Like, fairly year a ratable, of type XXX XXX Pierre? a deal

Pierre Breber

get that with. to full we as it's Yeah, operators are Mike activity. said, once activity, going we be we're As and other to up efficient ratable as to our work rate get we more pretty up becoming

Michael Wirth

second Of this we year. to first quarter course, Doug, to as there's quarter, quarter quarter variability some saw

The and it's quarter on be basis, third but – quarter little be going an some so is going annual ratable. to surges plateaus a quarter, there pretty to be yeah, can to

Doug Leggate

a XXXX. flow. trajectory slightly different six Tengiz, of guys, quarter your It XXXX follow-up, of Day I after similar in cash end are on vintage, the Analyst years a same the it's and is but through My Tengiz and expires question. guess free Pierre your I it's

be what the on severe into perhaps it or So, fairly looks term thinking after are extended cash question color And profile the your is, production what know of you're there, maybe going free post So, about flows? options to sustainability those just some like XXXX decline XXXX? whether want what my long replaced? [indiscernible]

Michael Wirth

in reservoir out performance what reflect discussions of create have in It'll with the The time a project. concession this. terms is the focused we see of is value into away. concession and and opportunities for asset, complex delivering extension big, right a certainly be These a We'll now. decade Chevron. discussions over the future. We're project This about government complex production potential big, for the to on country

to got Indonesia We've We've for works extensively, in Doug, you've in covered didn't places concessions, it where both work Thailand. walked that So as like find and it parties. we've something for from where did. Angola extended places like us, away

on So we'll focused and execution we're be about that delivering over now, more But, talking FTP. time. right project really

Operator

Read comes question Wells Roger Fargo. last from with Our

Roger Read

the and like with the or are that you, what willing are time extension your done to with you'd some you're share of for opportunities extra here real shepherd tenure, the be, through? to us question will first the my guess maybe of things hoping to you of I some what get

Michael Wirth

climate closed. Roger, oil pandemic restructuring, major haven't a oil a it's ESG of issues, prices with three and with been geopolitical and and the that acquisitions, that still a first and one spiked, that those collapsed, part we which my war ongoing political prices pretty comes a tenure things, turbulent noise of the

one And actually I'm so, looking little a forward day. hope smoother to I water,

still and work to to returns carbon. continue look, And, we higher lower drive do to got

We've by to have and business. good continue seen a in delivered work. the all and of buffeted momentum these throughout we've little strong got others through We've maintained bit strong that results turbulence consistency distributions industry that our it's in so, strategic throughout where horses. around And shareholder

so, like higher and returns drive to continue and our and that lower to And more I'd value to shareholders carbon.

Roger Read

stronger least quarter. oil, out in second on a duck here finally follow-up time. for things the commend on front. you look realizations If question for I when much they were look to modeling your at is My trying at really we not the good short more much

to that a contributed outperformance. we dip saw and was kind what think improvement I QX But of back QX, traditional. really with in of an the some line

should prices as that was at think regional So, I issue, – thinking capture oil we first anything was issue, look or just be your a realization and on quarter, a about going wondering, we as timing we about forward?

Pierre Breber

Roger, quite our up. not – that view that picked

But We up don't question, take had in and we'll looked make our quarter. realizations sure the have you why do understand realizations strong. the our your natural timing Jake follow have it. and first good looked after oil and So call our on better with gas best we

might you sure not look seem it on on a liquid. but international weaker, if quarter-on-quarter gas, of our little So some

So, please Jake. follow with up

Jake Spiering

interest you. appreciate call. today's in participation your your thank would and Chevron and everyone in today. I your Katie, stay like healthy. safe to to for Please back time We

Operator

Thank you. call. second concludes conference earnings Chevron This quarter XXXX

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