Chevron Corp (CVX) Q4 2024 Earnings Call Highlights: Record Shareholder Returns and Production ... - Stockxpo - Grow more with Investors, Traders, Analyst and Research

Chevron Corp (CVX) Q4 2024 Earnings Call Highlights: Record Shareholder Returns and Production …

Release Date: January 31, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Chevron Corp (CVX, Financial) achieved record production in 2024, with significant growth in the Permian Basin, increasing production by nearly 18% from the previous year.
  • The company returned a record $27 billion to shareholders through dividends and buybacks, reducing its outstanding share count by 10% over the past two years.
  • Chevron Corp (CVX) is advancing its new energies business, selling over 20 million barrels of bio-based diesel and completing projects to abate over 700,000 tons of CO2 emissions annually.
  • The company maintained a strong balance sheet with a net-debt ratio of 10% and achieved double-digit returns with an adjusted ROCE of 10.5% for the year.
  • Chevron Corp (CVX) announced a 5% increase in its dividend, marking the 30th consecutive year of annual dividend increases, demonstrating its commitment to rewarding shareholders.

Negative Points

  • Chevron Corp (CVX) reported fourth-quarter earnings that were impacted by special items totaling $1.1 billion related to restructuring and impairment charges.
  • Adjusted upstream earnings were lower due to revisions to asset retirement obligations and timing effects, including year-end inventory valuation.
  • The company’s downstream earnings were affected by softer refining and chemicals margins, as well as timing effects.
  • Cash flow, excluding working capital, was impacted by non-recurring and accounting items, including a $1.5 billion tax charge related to a Canadian asset sale.
  • Chevron Corp (CVX) faces challenges in maintaining production growth rates, with expectations of moderating growth in the Permian Basin and other areas in the coming years.

Q & A Highlights

Q: Can you explain the underlying cash flow for this quarter, as it was different from expectations?
A: Eimear Bonner, CFO, explained that cash flow, excluding working capital, was impacted by non-recurring and accounting items. Key factors included a $1.5 billion tax charge related to a Canadian asset sale and $500 million in charges identified as special items. Additionally, there were impacts from affiliate distributions and commercial activities totaling $500 million.

Q: What are Chevron’s long-term growth opportunities, particularly in regions like Nigeria and Angola?
A: CEO Michael Wirth highlighted significant growth opportunities beyond 2026, including projects in the Eastern Mediterranean, Argentina, and West Africa. In Nigeria and Angola, Chevron has made discoveries and extended leases, with plans for further development. These regions offer substantial long-term potential.

Q: How does Chevron plan to approach the power business, especially with the recent GE Vernova announcement?
A: Michael Wirth emphasized leveraging Chevron’s strengths in large-scale power generation and natural gas to meet demand for reliable, lower-carbon energy. Chevron plans to avoid being a merchant power player, instead focusing on high-reliability offerings for premium customers, with secured turbine slots from GE Vernova.

Q: Can you provide an update on the Tengiz project and any potential contract extensions with Kazakhstan?
A: Michael Wirth stated that the focus is on safely ramping up production at Tengiz. While Chevron is interested in extending the concession, any agreement must be mutually beneficial. Discussions are ongoing, and Chevron will update stakeholders as negotiations progress.

Q: How do recent US energy policy changes impact Chevron’s operations and new energy opportunities?
A: Michael Wirth noted a more balanced approach in US energy policy, recognizing the importance of oil and gas. Chevron expects policies to encourage more access and regular lease sales, with bipartisan support for permit reform. The company remains compliant with all regulations, including those affecting its Venezuela operations.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

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