Chevron Corporation Q3 FY2025 earnings call

• Worldwide production exceeded 4 million barrels of oil equivalent per day, with Hess integration on track and synergies realized. The Ballymore tieback project reached design capacity ahead of schedule, and the ACES green hydrogen project in Utah had first production. - A fire occurred at the El Segundo refinery, with no serious injuries and supply commitments being met. - Financials: Third quarter earnings were $3.5 billion, adjusted earnings $3.6 billion; organic CapEx was $4.4 billion, with full-year organic CapEx expected $17 to $17.5 billion. Cash flow from operations was $9.9 billion, adjusted free cash flow $7 billion, and $6 billion returned to shareholders. - Structural cost savings program captured approximately $1.5 billion in annual run-rate savings, with the new operating model live.

For the third quarter, Chevron reported earnings of $3.5 billion, or $1.82 per share. Adjusted earnings were $3.6 billion, or $1.85 per share. Adjusted Upstream earnings increased due to higher liftings but were partially offset by higher DD&A; legacy Hess assets contributed $150 million. Adjusted Downstream earnings increased due to higher refining volumes, improved chemical margins, and favorable timing and OpEx results. Other segment earnings decreased due to higher interest expense, corporate charges, and unfavorable tax effects. Third quarter oil equivalent production was up 690,000 barrels per day from last quarter, primarily due to legacy Hess production, with full year average production growth expected at the top end of the 6% to 8% guidance range excluding legacy Hess.

• Full-year organic CapEx inclusive of Hess is expected $17 to $17.5 billion, in line with prior guidance. - Expect strong cash generation to continue even in a lower price environment, underpinned by increased capital efficiency and growth in high-margin assets. - TCO had a $1 billion loan repayment in the third quarter. - Fourth quarter TCO production to be impacted by a pit stop, and TCO to conserve cash for loan repayments in 2026.

• Fire at the El Segundo refinery, with ongoing investigation and cooperation with regulatory agencies. - Market and policy risks affecting the California refining market, including shutdowns, pipeline projects, and waterborne imports.

Q: Sam Margolin asked about Permian production and capital efficiency.

A: Michael Wirth elaborated on Permian performance, efficiency gains, and focus on cash generation.

Q: Devin McDermott inquired about Kazakhstan concession extension.

A: Michael Wirth discussed ongoing negotiations and the complex nature of the contract.

Q: Neil Mehta asked about the Bakken asset.

A: Michael Wirth talked about adding the Bakken to the portfolio, optimizing efficiency, and assessing its long-term role.

Q: Ryan Todd followed up on Hess contribution.

A: Eimear Bonner and Michael Wirth discussed strong production growth and synergy delivery from Hess integration.

Q: Douglas George Blyth Leggate asked about exploration.

A: Michael Wirth outlined plans for increased exploration activity in frontier areas, new country entries, and technology application.

Q: Biraj Borkhataria asked about Namibia exploration.

A: Michael Wirth provided updates on Namibia exploration, including well results and future plans.

Q: Paul Cheng asked about base operation management.

A: Michael Wirth discussed portfolio alignment, technology application, and facility-limited production effects.

Q: Stephen Richardson asked about California refining market.

A: Michael Wirth commented on market dynamics, policy impacts, and marine imports.

Q: Jean Ann Salisbury asked about portfolio mix.

A: Michael Wirth stated the portfolio remains weighted towards upstream, with interest in petrochemicals growth.

Q: Jason Gabelman asked about equity affiliate distributions.

A: Eimear Bonner discussed TCO's role in exceeding affiliate dividend expectations and fourth quarter production impacts.

Q: Arun Jayaram asked about TCO production.

A: Michael Wirth discussed TCO's reliable production, plant optimization, and fourth quarter pit stop.

Q: Phillip Jungwirth asked about Permian gas marketing.

A: Michael Wirth explained marketing of Permian production and value optimization strategies.

Q: Lucas Herrmann asked about Downstream and Chemicals.

A: Michael Wirth previewed world-scale facilities and future cash flow impacts at Investor Day.

Q: Paul Sankey asked about macro environment.

A: Michael Wirth discussed changing global context and continued need for affordable energy.

Q: Bob Brackett asked about Permian oversupply.

A: Michael Wirth discussed Permian rig counts, efficiency gains, and production plateauing.

Q: Geoff Jay asked about Argentina production.

A: Michael Wirth discussed Argentina's potential, policy reforms, and subsurface quality.

Q: James West asked about Permian differentiators.

A: Michael Wirth highlighted long-term planning, efficiency gains, and steady development in the Permian