Chevron (CVX) 2 Feb 242023 Q4 Earnings call transcript

Company Profile

Participants

Jake Spiering	executive
Michael Wirth	executive
Pierre Breber	executive
Biraj Borkhataria	analyst
Neil Mehta	analyst
Douglas Leggate	analyst
Joshua Silverstein	analyst
Paul Cheng	analyst
Sam Margolin	analyst
Nitin Kumar	analyst
Devin McDermott	analyst
Jason Gabelman	analyst
Jeoffrey Lambujon	analyst
John Royall	analyst
Lucas Herrmann	analyst
Irene Himona	analyst
Bob Brackett	analyst
Neal Dingmann	analyst

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 Fourth Quarter 2023 Earnings Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded. I will now turn the conference call over to the General Manager of Investor Relations of Chevron Corporation, Mr. Spiering. Jake ahead. go Please

Jake Spiering

Fourth Spiering, Earnings Relations. General Chevron's Webcast. Call I'm Jake Manager Quarter to Conference XXXX and Welcome of Investor

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

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

statement estimates, appendix review of begin, can non-GAAP please contains be that Slide of forward-looking Please other on found this reminded we and cautionary statements. the this measures the presentation. Before presentation in be projections X. A reconciliation

Now turn over Mike. to I it will

Michael Wirth

Thanks, today. Jake, of in joining and thank you, everyone, solid Chevron for us XXXX. year delivered another results

a unchanged: turmoil safely During carbon. and remained returns higher our and lower objective geopolitical of deliver economic time uncertainty,

enabled shareholders Our cash billion consistent clear in growing record. while an and resulted record and returned a in approach to XX% to adjusted a production company $XX of ROCE

Energy this integrated on to the We later S-X the PDC closing the middle year. second of acquisition. focused file request FTC also and and expect anticipated around quarter We're draft now the announced successfully with the Hess

to we hydrogen the our of and intensity in lower-carbon in capture. foundational and action growing carbon And carbon operations businesses, both lowering advancing take continue projects

commodity between, Over the group cycle, high, past everywhere measures prices that in important most X-year the what we and Chevron low peer the are led with in believe create value.

returning in Chevron shareholders. below most cash We in is matter managing business. many commodity lead and inflation the well of Capital this efficient advantaged peers. focused were peer cost discipline costs able portfolio assets, capital always a the unit with to Combining and discipline while group to our

nearest our Surplus more than years each greater the shareholders cash share past than was was rate double S&P the growth to dividend XXX buybacks. X-year through of X in returned and peer. our Our

to intend for Our shareholders environment. growing we value record is proven, our in and any continue track

our our record oil DUC of per day production set XXX,XXX full building In delivered guidance while equivalent fourth the the year quarter. and of barrels Permian, on inventory we in a quarterly

continue the the our crew back-end inventory Looking adding our to before year. to build program of we plan second completion to is DUC half additional ahead, year in the loaded as an

As fourth down about in X% a production by half X% to the before expect around from result, day. the XXXX of the quarter be climbing XXX,XXX to year rate a we barrels per exit toward first

is our unique advantage and a financial diverse with execution Chevron strong across leader in clear returns Permian portfolio. a royalty

million per have We X barrels and in equivalent day to strong momentum oil XXXX. expect achieve of

slide fits first high facilities. we're plants currently TCO, existing towards The within making the how WPMP the startup. overall progress At field the project keep continues FGP to flowing shows the and pressure, phase at of full. field, The

net In fact, highest since production was the XXXX XXXX.

project of new The new gathering and in scope control lot operation. and a distribution center power from operational. system, is upgraded that TCO producing wells. the is are completed We've already system utilities, currently all

we're starting up including WPMP, on generators, focused pumps gas and For turbine compressors. major equipment

begin final in increased operations metering we We to is the compression enable online, flow pressure quarter to is first startup have the pressure, expect compressor for WPMP PBF commissioning. the will which station hand over March in Once to rates. to boost expected low dynamic second when first converted

in yet compression. to pressure back same driven converted the existing not high-pressure metering units At will from by process stations continue the going production will streams production be boost time, flow system. Low-pressure the to

turnarounds. as through the the remainder the pressure metering keeping year around planned compressors KTL additional and of expect station start-up, SGI plants conversions full We existing boost

to low commissioning. been enabled is of first operations additional when year on conversion in half the starting the focused turbine FGP with will for facility. new handed to facilities expected gas processing production startup along generators we're pressure and gas be final multiple incremental up injection compressors FGP, already units. next sour For The have over processed by field XGP in

We've improvement scope milestones came power. to X have generators last working update remain delivered startup. gas on boilers progress online work Since deliver We'll discovery and focused X and you delivery in and on to through a and key continue additional turbine safe seen items. quarter, have been reliable

With that, the over to it I'll to financials. discuss Pierre turn

Pierre Breber

per quarter Thanks, preannounced quarter or earnings in $X.X Mike. in charges $X.X $X.X We per reported were fourth the in billion earnings or billion were $X.XX of share. billion Adjusted Included $X.XX January. share.

Foreign charges million. $XXX almost currency were

million inorganic of $XXX in closing. Our XXXX assets and acquisitions CapEx PDC legacy invested included $XXX million around post

X% Excluding was about after CapEx below. years these budget items, above consecutive X

quarter. the repurchases Share third matched

the a year net sheet with in ending balance remains comfortably debt digits. ratio Our single strong, the

last Adjusted in and line to production liftings, due quarter. million. with Turning improved higher $XXX roughly upstream favorable the quarter earnings quarterly than effects. to timing were Adjusted record by earnings higher

Adjusted corporate on effects. lower partially and decreased downstream by timing other refining from lower taxes favorable margins, earnings costs. benefited in a offset All swing employee

year. Adjusted prices. on and upstream lower lower to For higher decreased refining earnings primarily to decreased employee compared interest Other the adjusted improved billion full to Adjusted earnings costs year, earnings prior segment nearly earnings lower were largely the due due declining $XX downstream margins. income.

future Chevron Solid financial deliver of cash again financial all on priorities. X We our flow increase reflecting announced growth. confidence in X% its our performance to dividend, free in expected an enabled

repurchased in new over debt And assumed outstanding. traditional discipline $X and We reduced of acquisition. X% capital by in PDC maintained billion, debt our the including about we We shares all energies. both

we other including the produced cargoes a LNG in any oil of and year of company's Australia. than year, gas out history, Last in number record more

We to X%. higher production to X% expect XXXX again be by

of the legacy and a Our plans operations Permian. growth include production DJ with in growth in PDC organic continued year the Basin full

sales year estimated this asset we an further portfolio. as impact includes from high-grade guidance our Our

equivalent in estimate estimates per downtime mostly around XX,XXX barrels are with cold quarter day Earnings oil turnarounds Pascagoula. first of our includes refinery ahead, from driven America. Looking weather by associated January's North

roughly do around with to Share and repurchases SEC under flat billion, the prices year. are affiliate difference be not on $X the between of expect quarter. in is We expected significant the earnings dividends and startup decrease will regulations. first after quarter year dividends in the commodity restricted half to of affiliate affiliate Depending dividends continue last margins, second WPMP. The in estimated TCO

Our range the December rate than years, In of our half. year CapEx prior is XX% from the guidance the in second was half lower budget first the about CapEx unchanged announcement.

at North sensitivities LNG higher levels. have sensitivity less of price oil-linked than liquids. Our natural About XX% and increased sales, to gas to production the XX% Brent relates relates America

Mike. to Back you,

Michael Wirth

discipline are execute and clear: acquisition, about excellence, the closing, In safely our further cash will Chevron. shareholders. Hess maintain return We're and strengthen to capital priorities cost pending excited with which

the thank partner in an to our exceptional create for wish value significant helping outstanding guide been strategic me an also Pierre best Chevron He's for to invaluable his leader, contributions personally retirement. his him and over career with I I want his company. to shareholders. all XX-year

hand it to I'll off And Jake.

Jake Spiering

prepared our concludes That remarks.

are line. ready to your We questions. now Instructions] take open [Operator please the Katie,

Operator

first from RBC. with question comes [Operator Borkhataria Biraj Our Instructions]

Biraj Borkhataria

career congrats for And great and the the firstly, all retirement. on Pierre, best

Pierre Breber

Biraj. Thank you,

Biraj Borkhataria

And it's over you last thanks recent ask buybacks I'll your time, a and compelled on for try resist. but the all help because feel question years. I to

So the question is on the Permian.

very DUC quite that quarters. last a strong few number the volume particular was inflection inventory. comment obviously in I from building growth in on an had You the And alongside in the interested QX, production

So presumably, contribution QX. in the a non-op was nice side

this about give bridge on at just the you least of because the most for some to numbers, year, you XQ been the hitting sort market XQ clarity recently. could concerned So has

Michael Wirth

Sure.

non-op royalty But the little came was the the It the third and of year. guided year, the a in So light. from fourth quarter, right where in didn't back. beginning we it end quarter, non-op are to

in ups right and to the some year, the of mid-teens. things quarter story downs quarterly in in we through execution. as the fourth these guided create can So it on strong but it really came the some was The questions,

drilling faster had because a cycle time We we cycle had POPs. more on from shorter We and frac had to faster We -- time pop. completions.

our you of continue those we so inventory drilling all noted, was performance build as strong. increased. DUC because So did And to

A than POPs would couple Those productive other on more towards POPs of the had the to of New than of We lead of the more half in that are the weighted in wells were portfolio. in Mexico New the fourth kind quarter towards rest things. year. guided activity second average Mexico.

that through. So flows

that thing reliability. final I point would higher is had the we then And to

the constraints related to and there or a anything weren't things POPs else, in or talked quarter, recall that we completions but some other You'll flow. midstream about little bit were on third constraints

had delays, downtime scheduled frac issues fewer quarter. and weather had We the hits. We in midstream fewer

all year So of ended the the performance our there in that strong contributed we fourth to right guidance. on and quarter, the

Operator

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

Neil Mehta

Thank you so much, Pierre. Yes.

the in out insights wisdom and going thanks over years. the great style. You're all for And

Pierre Breber

Thanks, Neil.

Neil Mehta

kind can we what on us schematic that walk track. is should are cost guidance November is It and question these non-engineers the schedule like TCO and boxes focused critical on us sounds update. the understand in was for through But us issues provided path Mike, help the that be maybe, the you still on. X, My the Slide of

Michael Wirth

Yes.

So cost than field. people right, want there we and schedule for be Neil, out transparent complex unchanged. understand usually you're I what's going as we the slide apologize you. the we But is more front guidance can in to a of at and put on as help

working our this, productivity. stress engineering We work more field. we about And piping them expected. in on seeing now. we're Last scope support we discovery around move We quarter, amongst plan, alignment encountering improved right and we're we're that through added we contractors. as action We've talked and the as shifted found

The and of producing new running. in first All key terms stuff center wells thing running. to power up here control this All is is of that's and of all, distribution right now. up the lot and a about think and there's utility infrastructure are

And so saw strongest last really mentioned the X full, performance the field. the the and a of I history that's fourth years and in plants strongest as keeping we we in strong year, -- the

which up high-pressure the back to X good key the lower those into deliverability full production the keeping on field, while to of which is field convert day. seeing the from get million field life and pushing of begin from allows plants is the out we're the So this the new us barrels plant and improves thing to a wells, year extend wells to pressure we a deliverability for

that get existing So pressure. that we when begin there And a these we'll them, low to will we under boost now from production XX converting station plant. stations producing up is of are the metering into back take and then metering

those, which boost field and full. of pressure whole lot plant of we capacity. gives against more going the to online, the more And keep lower these back of us get that now As compressors the producing converted excess we'll ensures well we get a it more are pressure,

we that a as on route will the bring equipment, then low-pressure that pressure. we start to plant production lower into run new And process at

things certain the startup are going the what there. got trying description of high-level legend And shows really kind we've of convey we're And quarters. so you begin a various to that's in that to

pumps commissioning learnings a X allow For And that major we're bring a We're talking and substations. critical there provide that that working other plant focused now, milestones million FGP, the updates up things us from day. key on on here. we're will turbine of transferring on walking we'll barrels the equipment generators to continue down online. the will we're to the And us compressors, take to about gas couple

is I inlet metering for First And startup said as that on the and prepared as production. in separator then, station PBF We'll begin ready second quarter the we commission fluids quarter, sweet we for is sour operation. conversions. the

on So specific provide you our we as guidance, and we milestones will continue track quarter progress. forward to it's move detail on and with each all

Operator

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

Douglas Leggate

congrats have way us retirement. Best side with in And wishes thanks I on to the my smart. making well. go look date, for offer sell nice quarter to the out. A Pierre, to as

Pierre Breber

you, Thank Doug.

Douglas Leggate

got kind a A question, part it's apologies But [indiscernible]. to that. it's My so around Jake B, I Mike, and on is, guess, of

yet, Hess Our got understanding the you planning are still haven't ongoing, the those but I S-X filed despite processes going that fact FTC realize yet, the that is integration and side from ahead haven't full the you that is the steam.

in your curious billion color as example, specifically grading. upside. how it The $XX portfolio process of has And on I'm number evolved lot go-forward that the of might relates me plan, if to you for a any offer seems to Malaysia it absence can have just high

So any you that offer color can topic, on please.

Michael Wirth

And have views comment Yes. a on transaction all investments the Doug, all that really performing and Hess to closes. new well. our assets plan. portfolio tight we of our are for deal, portfolio has and the to close it's to need us the until reoptimize of data access really that pretty update premature of

I speculate any so want And don't to on assets.

the some already. have got we've assets look, of And we own our that out do public domain in

on Duvernay reports seen Congo. have may You on Kaybob

signaled have we are of divestments some there So out the that Chevron portfolio.

is divestments few the And contributor, have as be assets because that Chevron, you that to more things any would over on particular get I can't will from to than next we think unfold past the legacy guess, see come billion through portfolio in I billion the close. greater I the we years a number But in $XX to overall transaction. the other $XX that Malaysia this asset comment come or likely until

Operator

We'll Silverstein go UBS. next Josh to with

Joshua Silverstein

up Permian, $X Coming stepping versus to you're the year-over-year billion back to last about you the billion $X help this CapEx year, deliver the growth. year

to billion you hit to needed Can because $X closer day XXXX the that $X deliver does ramp in have to this you billion As from that? per range? towards standpoint growth? Or continue you an what's a million step BOE CapEx to X pace towards stay target, up accelerating the

Michael Wirth

mentioned with XX middle of and add fourth a the X I frac year. Yes. question, crew year crews. Josh. rigs No, appreciate frac around this starting the we'll We're the

the becoming feet at need out front fewer we're time, to same of planned efficient. We in we've that the more drill got But us. rigs lateral

And going be to in so as there. required us we to capital X day, on we're the at barrels think level a I that million is get close

nice can decline. trying you're this you XXX,XXX really pull from hold down million the to actually day, when spending thing grow is XXX,XXX the capital to plateau X as then offsetting a And because to about XXX,XXX you're to opposed to

decline trying each by not chunks year. significant You're offset to grow and

bit some more, We've has in we're embedded of and been going forward. And little plan around our has talked moving now that's so a moderated, a inflation but things the that about challenge.

going So order to towards billion we're to I that not in have would $X get there. anticipate go to

on the I every our Permian intend really to within asset. we plateau We be But this. and tight capital as And each capital guide that And live we'll capital. want it. we year, along matters. to just you really updated with get production, to when and capital give spending an on to emphasize means discipline applies other

Operator

next go with to Paul We'll Scotiabank. Cheng

Paul Cheng

to years, that I of couple Pierre, we appreciate. the for the all First, congratulate past want thank and all you over actually the help may decades

Pierre Breber

Paul. Thanks,

Paul Cheng

And one Mike years, first and Pierre, for several you Mike, portfolio. the when acquisition I the CEO, of you. that is cost a matter there's and become focus that I think, for change think in lot last

where to, XXXX. So say, is it's difficult cost very structure to pandemic comparing for before your outside us the the see in let's from

us what pandemic, base during of for way any there cost effort. is the early date comparing in to guys the restructuring of Is to, that the of structural you a help you terms did have can say, number a you especially years part ago,

Michael Wirth

Yes, stuff request. head showed flat. we Paul, a here that my go top back It's all look, over last XXXX. our the that right unit I But fair years chart of the don't to think I a relatively on are several in have costs to

break out In fact, competitors. I chart. on We think that don't the each we're #X of

lower targets And we than XXXX to have is OpEx unit a X% reduction about outstanding Our going about XX year mid-cycle. at which out the still unit XX was year OpEx last barrel, before.

inflation we XXXX. some along of you're took the lot had of XXXX out the But business costs right, We've a and in way.

together So update have I that little as we capital matter. out you question that and guidance was as Hess, and on matters. portfolio, updates well, to to the always gets the that we Doug bit always that matters, this not bring I the assure talks And control an asking cost will view that my with come investors all metrics about changed discipline a

those numbers update specifically, So you on Paul. we'll

Operator

with Margolin Sam to Research. next Wolfe go We'll

Sam Margolin

Pierre. a planning on it's follow-up on or Maybe guidance. what you're you and TCO Kazakhstan about one dividend for for. hard the affiliate it's easy this But will Thanks everything, -- in a for depending an be one

year. about ex that it TCO. bit a than as what's as it's there's a And be And with assumption interesting flat is which prior LNG within some last year lower also was year-over-year commodity exposure, strong affiliates, little may isn't it that the

the of that's the this bit is guess I like But really kind we technical And on it Tengiz the reading to already you've a TCO? little where we a at a the profile TCO progression am so are process, [indiscernible] point level number that stable flow peak was in and is at stand. than and stable dividends from process of too of much this more cash update construction sustaining I or a installation question pro forma of sort robust -- where given Or is very into affiliate that we're number?

Pierre Breber

trajectory the just capital from down. FGP, are higher. we Thanks, on has when it wound dividends higher a And Sam. production get we've goes TCO as incremental because said, even Absolutely,

puts some takes. and are There

cash the into that head [indiscernible]. This year, you surplus year, So they're build to have in which, last payments, they we had we TCO as year. some as recall, going released cash last to talked held and debt some

will We that. receiving be

there So around is variation. absolutely down. there point timing be are right -- some is will some But your because the winding CapEx trajectory

has this been self-funded. So largely

As company, available. more price assumptions. on It does down, commodity an cash goes as depend affiliate CapEx there's

LNG also is in right, there and You're petchem.

drivers, the dividends. And of refining those our so major are are drivers little major the bit affiliate a of

it's roughly the We'll go with the during a we prior year. along that flat So year. as update

to investing But absolutely, been that of next comes It's on X lot for TCO, years. cash year. we've generate going it when a project in

and it's And earnings will dividends, tricky affiliate out time until And than will out to flip be been pull But of point. cash it. less maybe, just are. as everyone earnings What than particular, book TCO, has dividend, where earnings see that what that line, in the in it the going affiliated historically more we aligned for to more one as hard see, to flip. model are you higher see is going Sam, an you're too, you because that's earnings that's it, affiliate,

Operator

Nitin to Mizuho. Kumar We'll go with next

Nitin Kumar

the had really and of but the your spacing coring saw Permian. you part B to those? were related maybe 'XX talked the about just some technologies. drilling any on in A up slides, question, that type the part of optimized well you you I'm highlight Day, helped where Mike, were in and XXXX curious, Analyst you At improvements productivity. in well And So

And time very issues. you -- you from barrels some of [indiscernible] get ahead quickly issues are X then until to resurface Last in over years. don't XXX,XXX next that is B had doing infrastructure you're What the that quarter, period? here almost infrastructure those part

Michael Wirth

on technology, we're would What improving fact fleet. completions. of say Yes. referenced out same rig We're the on more I feet I drilling that the

And of the performance so that there are now. we're are a things contributing right lot to seeing small that

improved technologies various recovery of The in stages in piloted the are being out field.

chemicals the to to so they those gas extent completion to look data some production, the say margin contribute. in of some gathering different we're techniques would at in ways lift changes flow. But field and I and improve fracture it's injection using pilots are different at because in And using gas

So that, of those that on and into we're you right But to now, as these side seeing the it's start about improvements. cycle and I some contributing. more completion how we deployment, get say would help drilling talk time large-scale we'll they're we'll understand

And so there's more to come.

of be made. On can is about related be particular issues processing gathering or some your to infrastructure, We're can point can offtake working items. midstream or can related weather-related. the regulatory those gas be because They talked be we've -- -- before some system. all pipeline of the to plant a well They that they

downstream the asset of scale, really, large reliable really wells. we a at As performance that need

no capacity had out on takeaway constraints of basin. the we And

So field just but tanks things a that a have is things our of into we're those the the market. But priority pumps, and for for 'XX we team and and perform. lot with market, pipes, high and do need the the to And field. capacity access not to takeaway ultimate 'XX in between operations well other 'XX, positioned

to little this, that a modest fourth But guided constrained. in in on I line the weather will very on quarter mentioned, of performance a strong. a As Pierre a January, impact. isn't and high all to, was got have that that, it's order very And market access operational ensure which priorities We that of sight they're saw we've we're confident priority. bit

Operator

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

Devin McDermott

the the help to for want I Pierre, echo the all congrats. Thanks over years.

Pierre Breber

Devin. Thanks,

Devin McDermott

productivity. some the the I one TCO. labor if to the wanted of guidance quarter, to on last was of productivity you've you back you it's how could when Mike, implemented you progressing circle And comment improve think changes workforce noted the wondering And several I that timeline, past that months, over things to updated was provided plan. on I versus

scope that FGP. improved would on mentioned comment the labor you of sure as could comments, be to if or not else. that I'm your related something you context well, in that's But elaborate in work And great. of

Michael Wirth

Yes.

So on we working have startup. multiple and contractors commissioning

identified, needs inspected down is this punchlist is refer systems everything which to been properly items they've And work completed from to ensure to so that contractors. have walking we be by that as that been still

to And loop of equipment get and into equipment pieces up bring then the and all runs you checks work service. the into

So number have from productivity a moved this. that productivity. exhibited that scope of we've working higher those contractors got on had to contractors have We've lower

beef to capacity. lower worked that in resources or additional them contractors where in brought constraints the And on with the resources up the are bottlenecks. understand we've the to the have We've productivity, overall

one and up that we're again above targeting of a in down range is seen quantum. by previously we've that X.X productivity similar factor it up as a X.X now, to the who measure And kind we had get was

work people, have that items a there's more people working So that we're the on resources so vendor solutions. to out resources be in right as got also people there that we And we enough much the company ground and or on sure we're further discover contract of the can we technical bringing right lot ahead. include things need

are X, identification of weeks of weeks several crews work. teams was of now, this ahead actually doing out or few other weeks the were the downs that or issues that X more before, the quarter short walk Last ahead quarter the a and the doing We're work.

the time got plan done, to work together, the to back manner a So and that be get better a the you've you've you've got efficient much permitting sure some put equipment, in execute all because much ability right more got cetera. tools, et the work

Devin. So working it's our project I've on It's a and the team this. seen my good of largest big And seeing are in of brownfield we're all on-the-ground performance out life. and brownfield terms the project improvements in of great, teams out project, contractor most complex the that

Operator

Jason next Cowen. We'll TD take with question Gabelman from our

Jason Gabelman

Yes. I been want retirement. to and Pierre, working just comments. echo everyone's great in luck good it's you, with

Pierre Breber

Thank you, Jason.

Jason Gabelman

I wanted provided Basin, ask bit data type -- the I in that with appreciate the back to the reconcile go -- Permian you to back for and of curve data the you difficult you the a the the type to the Capital slide provided, anticipated curves a XXXX with deck. with you particularly type as It's line productivity. your that Day the talk where if ended Delaware large about forecasted at them in in being Markets Capital Basin, in just curves, curve? Markets shown Day type improvement up when you particularly Can Delaware in

Michael Wirth

Yes.

to continue on So a first There's consistent we understand where Midland steady performer, less geology. quartile performance. Basin, just complexity. the touch I'll be the fluid quickly We

so And we're a quartile Midlands. performer quartile, first the there in top

of In guidance, a of as the portion productive were the our showed so which, And New a data I into shifting more New Mexico focused then year actual basis. on we we Delaware, basin. because Delaware-wide is program earlier, we showed some particularly on mentioned much last Mexico, forward

you XX the our more performance in of In we've and subsurface shows the type Mexico POPs got appendix, curve. areas, in the strong. they very see XX slide saw with lay And improvement were year. the in our been of than And has in the on out can right half. these XX% half POPs there productive second the second Delaware, you a that last second that the were a half New significant More POPs we

see seen can improvement. in to you But the spacing we the then there. updated that combined our it there. in completion improvement guide We've well didn't designs strong Texas, which chart Basin, and year we've And because Delaware last was

subbasins, exceptionally well. And of within those there as some the are strong basin, are and performing

outlined with in Day Markets very that year. seeing So the we consistent last we're is performance what

these and the basis think a that we'll detail to just was to bit on forward. little basis provide I basis, into going report shift in more continue you sub

Pierre Breber

by Jason, And reminder, year's DUC. a impacted too, just wasn't it long-sitting as so performance, last

the the the because consistent impact So see and year-on-year bang Texas there long-sitting in was said prior with the improvement year. is guidance, you from DUCs on. the It's in

Operator

take question TPH our We'll Co. & Lambujon with next from Jeoffrey

Jeoffrey Lambujon

and up further an ask specifically from if wanted on this for do you in opportunity What program the improvements to I year. the Texas design, and Permian any, spacing the here cycle to follow actually see times on region? completion

throughout the side? And to those working stronger, could Permian regions mix or complete wells of within [indiscernible] well even translate what's and capital New Mexico across then even to quicker to there the thinking make to Midland all how you about year? the And this allocation secondly, these are

Michael Wirth

Yes.

POP efficiencies. are in So doing you learn things, and technology we're cetera. from more We -- as is et constantly looking of completion these things, And a improvement find significant more you right? seen as to to This year. and inflation time can improve. this And bear, drilling time, I continue to mentioned little more earlier, lot bring we've

frankly, those we So the across look between basin, basins. learnings extend -- and to

So There the to sub basins from Basin into down DJ that you differences have are DJ Basin understand to the Permian. and the the and in respect.

short the mean, answer I But yes. is

We time better are at find plateau people probably we're looking at ways in even get this. improvement, for ways every smart learnings productivity of to think across continue to terms I transfer to And the there.

And the improvement we've end so the I of performance think seen cycle. don't

been the our of and basin This then portfolio It's the past about that About is going it. forward, allocation in pretty is XX% the a to in where lies. portion Basin, XX% Texas. function balance, is into largely and that's Our good capital XX%, is of Delaware basin in approximate the the Midland overall way way Delaware year here. a Mexico New

Operator

We'll John Royall go JPMorgan. next to with

John Royall

the you a I'm to Permian. and going the question on to TCO going Congratulations break to give Pierre. guys I'm a ask on DJ.

with the So underlying understand trying this development rate growth could forma if pro how your basis? that DJ. plans PDC a you at growth we just in 'XX, just kbd us post looking for now of broader think quarters growth to And of what's 'XX real behind on for off then couple of Just update you the should kind about XXX the of a DJ. in

Michael Wirth

Yes.

So quarter PDC. we've full now got a -- with is first fourth quarter the

day months the XXX,XXX with the highly can had there. to over third the efficient plans our of is The factory. going quarter, X day, barrels barrels And see in around bit are in X you quarter a hold a a a we fourth came DJ XXX,XXX we in, PDC forward which little out in

was expected. a quarter there in were into November and booked And little in There much the were maybe adjustments might then wasn't have fourth operations. quarter December. not related some accounting even really the as downtime were stronger fourth we that And weather-related than that

above little few that, probably XXX not or can to there's are barrels that a a to pull repeating around hold is we back XXX,XXX going bit. we're the a things contributing So day. But confident

wells We're to a that than few of spacing still is little executing drive well a the and the different driven design, was bit spacing more in well volume. and more ours, a -- and tighter design PDC little basis which

capital. of on return design basis Our on is invested more focused

it's but capital return. so spacing, bigger less fracs, it's overall And wider higher and it's

We've design a decade. in going. numbers. basis the We've across out end to you'll rigs years, as the of multiple permits standardized, more basin, so transition for that And X the are into see to roll we got nearly the standardized got that

things, got I you. very pleased, to tell we're so And and we're learning very,

apply but rest in from only DJ, the the the it's that's that going help that apply going There's will of some in to to us. well not as Permian we've stuff learned PDC

are barrels. these high low cash breakeven So going forward, margin,

on We're We've hold got $X to are bag. are And track there. the CapEx the we've billion We all -- around plan to already plateau at synergies there. a down synergies essentially it in virtually XXX.

OpEx is we very million to. which seeing $XXX close to We're now procurement hadn't guided envisioned. we the originally some synergies,

So or guided better everything at to. we than about had is it what

Operator

Lucas We'll go BNP Paribas. next with to Herrmann

Lucas Herrmann

been all to. I'll thank for listening insight. to my Pierre, always host already. Yes. And But the comments you the add worth It's

be million, to is though it as increased X.X business particular in When the And commodity. barrels this the in next that X maybe whiplash that towards going about likely to slightly going I in over feels adding I pretty you're to volatile growth oil of years, guess I question look have sensitivity is X at the black more to and the mean, high-margin oil. movements to see you're

the what balance you me might the idea that could think And way an I loan you managing sheet And feel, about the if give investment what the the TCO. of sheet schedule repayments net do equation and -- just And that they balance things. Pierre, in, line at or the net CapEx will and implies in out on, side I could play you of add just elsewhere? go repayment side loan the on looks or through the presume

Pierre Breber

overweight liquids We've thanks, upstream and adds to acquisitions a that for No, right, long that, I'll and overweight certainly Hess and it. recent we Right. exposure. Lucas. oil And been take time. you're like

terms we mean, thing how first we the balance our In is with start of manage I breakeven. the sheet,

was in our and what CapEx year. So dividends, it it XXs to that oil last price the low -- takes cover the takes

we see a price we're well shares record we that's $XX upside. last share of our where outstanding almost built why X% because currently we for below buybacks so year, And mostly are. billion, And had

done strong balance We've sheet. also it maintaining while a

our which guidance to low XX% okay we range, We cycle ratio X%. keep is share relevering of net we're repurchases XX%. Our back across said up as towards that debt end the steady is the our

would had that [indiscernible] we a look that's in holds. at cycle at guidance, the through net that the debt forward. change still ratio or going of significant that that So would a course, portfolio, And if look guidance, kind we of

the the again, when adding sheet, think about we you're you into is our take of are I things account And when built really breakeven lots your that that actions but with taking the exposure at that breakeven guidance. balance commodity we're consistent But key. portfolio, outlook, -- think your price

our capital nearest to greater and Mike -- than And peer, talking discipline, S&P in and a twice ability at both cost the twice pay our program right, XXX. and just new more reinvestment energies grow X%. fund dividend, and traditional than We company was increased our about growing

increase. the So are before those all numbers latest

all we're that's going surplus do at price, it. return that cash, about low can to We a how think

We're time not I more we long low trading, prices good for keep as our a and would having to So we're prices as again, built on debt net really cash in where expect how return depending say, to below should exposure are thing. and And that's you breakeven it. as barrels, shareholders. -- you good high-margin over a to commodity we increase spot. our

Michael Wirth

And how payments order see flow do you through.

Pierre Breber

Oh, yes.

So in cash. will investing loan in I our up to alluded payments cash from that, not shows -- sorry ops. be about because that. that That Yes,

you take that. and the team will Jake all through So

returned. $XX it's But was different share year. our line saying see that 'XX yes, in about In 'XX. separate this. flipping, a or billion we Again, from in will being and line, then cash And 'XX affiliate next $X that's I billion what

But you back our project. additional. is So be we once surprised. the We've disclosed yes, Jake X been project in going shouldn't only all that's That XX-K. investing to starts. that. this for again, take in And can through come that's cash years

Operator

Societe next our take with Irene We'll question Generale. from Himona

Irene Himona

best new is Hub, And Henry views XXXX today, Hub. perhaps on if published a you Hub the increase this because Henry Is level, XX% sensitivities sensitivity. And next purely macro your you material In saw can please? for share of question that, for the to your on you Pierre, the on in the Henry outlook related all a chapter. PDC? My very

Pierre Breber

the along Mike and I'll associated with So it's then the comes continued gas take just can function then certainly a and that the macro. start, Yes, of PDC Irene, Permian. --

growing So with comes as natural it gas. we're along that, obviously

Michael Wirth

Henry was I the macro sensitivity. Hub the the Irene, pulling up And on Yes. slide

oil speaking, markets broadly pretty So balanced are now. right

on OPEC+ drive movements in way could to be I one think could call can that conflict other. the world or and to be strong this the year and are the It in the Middle or as decisions, harder thing geopolitics continues not growth growth be is Economic quite all growing. our demand year, decent, East. this maybe still for outlook as but last

are little exports maybe of about the through the on U.S. through inventories time, certainly the term, in The in high of a near out going U.S. term the really to mostly are riskiest but the questions the the Europe. high period there's bit of is are in different. now winter We're that not kind market weigh Inventories Gas longer winter And time.

And markets just the it's And than gas little refined more under the got compete talking company and about so pressure build was we a all of products. through portfolio oil Pierre markets the that has cycles basket. not of how to or unusual. different parts

pressure some as under well. are right Petrochemicals now

in here of think Others in looking probably under term, I the pretty we're And good. any so Hub pressure. Henry point going pressure the in to find is under the fundamentals And short are at time, some category.

Operator

next Bob go to We'll Research. with Bernstein Brackett

Bob Brackett

million-barrel hitting way X day the this point about there's If see at book and between sort in implies try that at to X% X% of point to in X closer X say, Is I a there's for look we're on, the production FGP that year. to fourth guide an quarter inflection the XXXX, to a perhaps conservative a that startup milestone plus to or end growth production where some and growth Permian guide going of million, coming X.X it? TCO think I right

Michael Wirth

the PDC we year, now part this into year will coming Well, that be portfolio. of full of a have

bit high had expected even mentioned that a pretty terms already So reliability. we was higher might in we of safe maybe quarter I've fourth have little that. counting because than that's on

midstream had repeat. -- these Permian of Some the didn't faced issues we in

this have fourth the turnaround quarter. in And Permian catch-up well. as thing the We we had accounting schedule light in a pretty

way a around. quarter was strong it the So all

head -- sales end the ended some we the at couple year, kind up the As guidance. we've got into in end. at we've range years been low asset but of hitting And last our of low guidance Bob, the next we've

probably of as little that being you things so comfortable range mentioned. year, And us could the think this number of the you the a think I more of in middle given a

to each you that this expect try to year hit we we expect certainly hit, we to So guidance it and give year.

Operator

take question with from our Securities. Dingmann last will Neal Truist We

Neal Dingmann

is payout. And continue a XX% continue Trying shareholder will, it constitute buybacks want cash paying of sense for of you just Mike the a flow remainder return bit year. a to if sense -- but if of that maybe the get the sounds free to majority just over of specifically. on out to this get you'll will like

Michael Wirth

some year kind already expect of Yes. percentage Neal, used clarified this of we've have a increase track have And of on we our the percentage What we've X% of go distributions. range is on all. done record what with not dividend, you from the we've operations or for leaned as first buy that cash announced. can

be the now guidance and towards you point range $XX our there would an And end, at handle. price for to down billion in number up we'd we've upside towards then case, billion for both a the comfortably out I buybacks. of a years. that. end which that's on back lower downside higher of And price we case, $XX lower of the upside that In can had

confident move our sheet. we the all portfolio We expect it have end [indiscernible] because the XX.X we're to and to looks of so other world there. equal, top post close, our we'll of a in of see capacity XX the and balance from happens when rate But when things of the we would get cash Hess productive how strength the long-term

in of percentages, And mentioned this specific Pierre the than the rather record. his to I'd guidance focusing think right SEC you comments, at towards market relative under of really issued point the Hess look now is which So track in course, rate we've then in remain we the restrictions those I open. kind on of that do can the out we buy the and when proxy back

so these are don't normal -- have things of And constraints under we all of on those times, us. one

Pierre Breber

of just buyback, XX will share on would It's words of little add a buybacks. the add be last bit. right? fitting me I just maybe straight out my 'XX, bought X And than the actually XX though earnings and -- 'XX. past year in still were but before, in strong years, more shares let cash right? back records last were we There years year higher, even

whole procyclical. commodity countercyclical We're buybacks that be hard steady that from heard to trying cycle. volatility. the point. the We've investors not That's be And in commodity should be it's to price business has some across the

So across the in cycle guide reinforce to we procyclicality. is being formulas, how And steady opposite. the reinforce They it. fact, these

we prices countercyclical. in -- procyclical intent almost it to out is in We'll a either cycle, within range paid or independent be held some have in used 'XX, try that, ways, a more to but pay where it back. because return is that but giving could the to we across of we're some we're goes, see And So in steady 'XX. the

Jake Spiering

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

Operator

This you. XXXX Earnings Fourth Thank Chevron's concludes Quarter Call. Conference

disconnect. may now You

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