Chevron Corp Q1 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Neil Mehta - Goldman Sachs & Company, Inc. - Analyst : Mike, I know you were in Kazakhstan a couple of weeks ago. So I'd love a full rundown of your perspective on PCO, specifically, the startup looks like that has gone well. Early discussions around the concession extension and then your perspective around production levels and risk of curtailment.

Question: Jean Ann Salisbury - BofA Global Research (US) - Analyst : A lot has been going on in the California refining market. With the recently announced competitor closures of refineries, how are you thinking about your position there?

Question: Biraj Borkhataria - RBC Capital Markets (Canada) - Analyst : I just wanted to go back to the financial framework and the decision to slow down the buyback today. If I look at the last 12 months, the payout ratio has been almost 100%, and that was obviously an oil price of much higher than it is today. So I'm just trying to reconcile how our cash generation would look at 60% or maybe below and how I reconcile that with be the low end of the $10 billion to $20 billion range because to me, it looks like the bottom end of the range should maybe be lower than that $10 billion. So how are you thinking between executing the buyback on a consistent basis and then obviously leaning on the balance sheet because that balance sheet has allowed you to do countercyclical deals like mobile and things like that. So I appreciate some color on that.

Question: Doug Leggate - Wolfe Research, LLC - Analyst : Sorry, I was on mute, schoolboy error. I'm so sorry about that. Josh, I was going to ask about the macro, but I didn't want to ask such an asking question, but you seem to be in the crosshairs of probably the two most important macro stories in the market right now. And I just love your perspective on it. The first is obviously Venezuela and the potential loss of production there. And the other is what appears to be an impending market share battle going with the declaration of cooperation, single-handedly seemingly pointed at Tengiz. In other words, the start-up of production is exacerbated Kazakhstan's over production against their quota and of course, that seems to be what's driving these accelerated decisions by OPEC+. So I guess my question is, can you offer any perspective on the physical changes you're seeing in your business in Venezuela. And when you met with the President, was there any consideration whatsoever of curtailment to try and help meet their quotas? Because, frankly, if the answer is no, it's pretty varied for the oil price. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 02, 2025 / 3:00PM, CVX.N - Q1 2025 Chevron Corp Earnings Call

Question: Lloyd Byrne - Jefferies LLC - Analyst : I was going to ask about the return of capital. And I think that's a really good answer you guys had. But let me try the Gulf of Mexico, the Ballymore is online. Can you just walk through the next steps to get to the 300,000 barrels a day? And are there any hurdles we have to look out for?

Question: Ryan Todd - Piper Sandler & Co. - Analyst : You've got a slide in the deck looking at Permian performance and the improvement you've seen there in the Delaware Basin in 2024. Can you talk about I mean, you talked about some of this in the past, but can you talk about what drove the difference, whether in terms of well mix, development strategy, completions, et cetera? And what you see as the potential implications for the 2025 program or outlook?

Question: Paul Cheng - Scotia Howard Weil - Analyst : It seems like -- there's some good news from Cyprus. You guys signed with the government that to allow the gas project to go to proceed. Can you give us some idea that maybe update us on -- in terms of the timeline, what's the next step, the size of the project in terms of the gas warning? And any color that you can provide?

Question: Stephen Richardson - Evercore ISI Institutional Equities - Analyst : I was wondering if you could give us your -- curious on your recent thoughts on CPChem, obviously, in the middle of some pretty significant investments in that business through what looks to be a trough, at least in the olefins side of the business. But maybe your current thoughts on the business and then also how are you thinking about potentially maybe owning more of it over time and how that fits into your current thoughts?

Question: Josh Silverstein - UBS Securities LLC - Analyst : Chevron has a pretty unique asset in the Permian given your mix of operated, non-op and royalty volumes. Can you provide us some details as to what you're seeing across the non-op royalty side now and any reduction in activity there and how that may play into the kind of the plateau level for Chevron.

Question: Lucas Herrmann - BNP Paribas Exane (UK) - Analyst : Probably what -- just a question on cash flow for Eimear. It looks as though the equity contribution or dividend contribution that you're anticipating this year is now $2 billion relative to -- I think you had guided towards $1 billion of excess, et cetera, the full year stage. Am I correct that you've changed your expectation? And if so, is that a consequence of higher expected dividends? Or I don't think it's a change in lower net income. So any comment -- appreciated.

Question: Roger Read - Wells Fargo Securities, LLC - Analyst : I guess, maybe with the macro in a lot of people's minds at risk of lower oil prices. Just wondering, Mike, with all the changes here or project completions, Gulf of Mexico, fairly essentially through its process, Kazakhstan up and running, the Permian kind of flat lining. When we think about the resiliency of Chevron, of, say, a $50 oil world, what do you think has been sort of the change in the whether you want to call it a base decline rate or the sustaining CapEx? Like how should we think about kind of cash flows and cash CapEx commitments in a possibly softer oil price world.

Question: Phillip Jungwirth - BMO Capital Markets (US) - Analyst : Congrats on the start-up of Ballymore Anchor well before that. As we think about what's next in the Gulf of America, can you just talk about your optimism around future prospects, Paleogene or brownfield tiebacks. And generally, how do you see the cost structure or breakeven now for deepwater versus shale?

Question: Betty Jiang - Barclays Capital Inc. - Analyst : I want to ask about the progress on the Power Ventures. I mean it's clear that the AI power demand is not slowing down, and you guys have the timing advantage. How are the customer conversations going? You've spent $400 million of inorganic CapEx in the JV in 1Q. Just want to see how that spending trends over time, especially considering some of the inflationary pressure that we're hearing in the space?

Question: Devin McDermott - Morgan Stanley & Co. LLC - Analyst : So Mike, in your response to Roger's question before, you talked a bit about flexibility of the capital program, and Eimear, you had similar comments in your prepared remarks. Given the cash flow growth you've already highlighted the low upstream breakeven strength of the balance sheet, there's probably no need to make adjustments on capital even in somewhat softer oil prices probably more just about optimizing returns. But I wanted to ask about how you think about some of the parameters or market conditions that might make you make some adjustments to some of your short-cycle investments in places like the Permian.

Question: John Royall - J.P. Morgan Securities LLC - Analyst : So I was hoping for a little more color on expansion at Pasadena and how that's running and the benefits you're seeing overall to your Gulf Coast system? I know it was partly about synergies with Pascagoula. So maybe just a little more color on that and how the project is contributing several months into the start-up.

Question: Jason Gabelman - TD Securities (USA) LLC - Analyst : Yes. I wanted to go back to the buyback guidance, if I could. -- you've cut to the low end of the range, but it is still a pretty wide range. And I think we see your peers either guiding to a percentage of cash flow or a fixed amount that gives more visibility to where the buyback will be quarter-to-quarter and year-to-year. So I was wondering if you could provide any additional color on how to think of the pace of buybacks through the balance of the year, if it's going to oscillate between the low end to the high end of the range or where it will oscillate in between? And then the other point on that is if you could just talk about where the buybacks are going to be following the Hess acquisition, you had a prior guidance of $5 billion. I'm wondering -- per quarter, sorry, I'm wondering if you have any update on that figure?

Question: Bob Brackett - Bernstein Institutional Services LLC - Analyst : Question around the tariff situation and how it might impact either CapEx or projects. What are some of the things you can do to adjust to tariffs in terms of controlling costs.