Chevron Corporation earnings

Management highlights

- Chevron delivered solid performance despite market volatility and geopolitical tensions, with people focused on safely delivering reliable energy. - Maintained capital and cost discipline, generated strong cash flow, and delivered superior shareholder returns. - U.S. production over 2 million barrels of oil equivalent per day, Gorgon and Wheatstone LNG running at full rates, TCO producing above 1 million barrels of oil equivalent per day, and U.S. refineries operating at record crude throughput. - Optimized flows across value chains to maintain high utilization and reliable supply. - Executed key expansion projects in Eastern Mediterranean. - Continued to leverage expertise in Venezuela and work on asset swap and equity stake increase. - Global enterprise optimization team working to capture maximum value from upstream and downstream assets.

Guidance

- 2026 guidance unchanged, capital spending and production outlooks consistent with previous guidance. - On track to deliver $3 to $4 billion structural cost reduction target by year end. - 2030 targets include over 10% growth in adjusted free cash flow and earnings per share, and 3% improvement in ROCE at $70 Brent. - TCO free cash flow guidance of $6 billion unchanged. - Equity affiliate distributions expected to be about 70% of full year guide by end of 2Q.

Segment performance

Upstream: First quarter 2026 oil equivalent production increased by approximately 500,000 barrels per day compared to the first quarter of 2025, including integration of legacy HES assets and organic growth. Downstream: U.S. refineries operating at record crude throughput, high-quality upstream and downstream portfolios delivered significant integration benefits, with strong supply into tight markets and maximized margins across products. Venezuela: Expected to represent 1% to 2% of cash flow from operations, asset swap with Petavesa increases position in Orinoco, and equity stake in Petro Independencia increased to 49%. Eastern Mediterranean: Tamar and Leviathan operating at full capacity, with completion of offshore scope for Tamar Optimization Project and Leviathan Third Gathering Line.

Risks & headwinds

- Market volatility and heightened geopolitical tensions. - Uncertainties in Venezuela's fiscal terms, security situation, and dispute resolution. - Potential negative impacts of government policies such as price caps, export bans, and certain taxes during supply shocks. - Climate litigation and related uncertainties regarding state versus federal jurisdiction and climate policy establishment.

Analyst Q&A

• Q: Neil Mehta with Goldman Sachs asked about the current conflict in the Middle East and its impact on mid-cycle pricing.

  A: Mike responded that it's a significant disruption, early to conclude long-term implications, but Chevron will remain consistent with capital and cost discipline, and its portfolio strength.

• Q: Arun Jayaram with JP Morgan asked about value capture opportunities from refining system optimization and Hess merger.

  A: Mike explained about the global enterprise optimization team, high utilization, and increased equity crude throughput in refineries.

• Q: Devin McDermott with Morgan Stanley asked about capital allocation and growth spending.

  A: Emer said Chevron is consistent with financial priorities, not changing capital allocation framework, with dividend growth, capital efficiency, strong balance sheet, and buyback within range.

• Q: Doug Luggett with Wolf Research asked about Venezuela and Permian capital increase.

  A: Mike said Venezuela still recycling cash flow, need further progress for more capital, Permian running for strong free cash flow, focus on reliability now.

• Q: Steve Richardson with Evercore asked about exclusivity agreement with Microsoft on Power Project.

  A: Mike said project progressing well, moving towards FID later this year.

• Q: Baraj Borkataria with Royal Bank of Canada asked about Venezuela receivables timeframe.

  A: Mike said receivables expected to be fully paid off in 2027.

• Q: Sam Margolin with Wells Fargo asked about operating posture in volatile environment.

  A: Mike said Chevron has playbook, working on optimizing supply, managing financial exposures.

• Q: Betty Jing with Barclays asked about TCO performance and concession renegotiation.

  A: Betty was told TCO returned to full service, de-bottlenecking work encouraging, concession discussions making good progress.

• Q: Lucas Herman with BNP Paribas asked about LNG business flex.

  A: Mike said LNG portfolio about 16 million tons, 80% long-term oil-linked contracts, 20% spot, with expected flow through in pricing.

• Q: Manav Gupta with UBS asked about chemicals.

  A: Mike said CP Chem has strong price moves, chain margins improved.

• Q: Jean Ann Salisbury with Bank of America asked about Bakken.

  A: Mike said Bakken assets running well, testing advanced chemicals, getting interest from others.

• Q: James West with Mellius Research asked about eastern Mediterranean assets.

  A: Mike said eastern Mediterranean assets valuable, with expansion projects and growth potential.

• Q: Bob Brackett with Bernstein Research asked about government policies during supply shocks.

  A: Mike said helpful policies include strategic reserve releases, Jones Act waiver, relax specifications; unhelpful include price caps, export bans, certain taxes.

• Q: Philip Jungworth with BMO asked about U.S. climate litigation.

  A: Mike said not party to specific litigation, but principles support federal court decision on climate policy.

• Q: Nitin Kumar with Mizuho asked about exploration program.

  A: Mike said exploration is longer cycle, portfolio diverse, opportunities outside Middle East continue.

• Q: Jason Giebelman with TD Cowan asked about equity affiliate distributions.

  A: Emer said strong momentum on affiliates, TCO changed distribution schedule to monthly, leading to increased guidance.

• Q: Jeff Jay with Daniel Energy Partners asked about California refineries.

  A: Mike said working to meet supply obligations in California, highlighting Jones Act and new production from Sable onshore.