Earnings call transcript: Chevron’s Q2 2025 earnings beat estimates despite revenue miss

Chevron Corporation reported its financial results for the second quarter of 2025, delivering an earnings per share (EPS) of $1.77, slightly surpassing the forecast of $1.75. The company reported a revenue of $44.82 billion, falling short of the expected $45.6 billion. Despite the revenue miss, Chevron’s stock saw a modest pre-market increase of 0.55%. With a robust market capitalization of $309.69 billion and an attractive dividend yield of 4.51%, Chevron maintains its position as a prominent player in the Oil, Gas & Consumable Fuels industry. InvestingPro analysis reveals the company has raised its dividend for 37 consecutive years, demonstrating remarkable financial stability.

Key Takeaways

• Chevron’s EPS of $1.77 exceeded forecasts by $0.02.
• Revenue fell short by $780 million, marking a 1.71% miss.
• Stock price increased by 0.55% in pre-market trading.
• Strong operational performance in the Permian Basin and LNG sectors.
• Continued shareholder returns with $5 billion distributed.

Company Performance

Chevron demonstrated resilience in Q2 2025, with adjusted earnings reaching $3.1 billion and a notable 15% quarter-on-quarter increase in free cash flow. The company’s strategic focus on expanding its production capabilities, particularly in the Permian Basin and LNG sectors, has positioned it well for future growth. Chevron’s acquisition of lithium-rich acreage and the completion of the Hess merger further strengthen its asset portfolio.

Financial Highlights

• Revenue: $44.82 billion (1.71% below forecast)
• Earnings per share: $1.77 (surpassing forecast by $0.02)
• Cash flow from operations: $8.3 billion
• Adjusted free cash flow: $4.9 billion (15% increase from previous quarter)
• Organic CapEx: $3.5 billion (lowest since 2023)

Earnings vs. Forecast

Chevron’s EPS of $1.77 slightly beat the forecast of $1.75, resulting in a surprise of 1.14%. The revenue miss of $780 million, or 1.71%, highlights a discrepancy between expectations and actual performance, although the impact was mitigated by strong earnings and operational efficiencies.

Market Reaction

Following the earnings announcement, Chevron’s stock experienced a pre-market rise of 0.55%, reaching $152.48. This increase reflects investor confidence in the company’s earnings performance and strategic initiatives, despite the revenue shortfall. Trading at a P/E ratio of 17.24x, InvestingPro data suggests Chevron is currently undervalued based on its Fair Value analysis. The stock’s low price volatility and strong financial health score (rated GOOD by InvestingPro) make it an intriguing option for value investors. For deeper insights into undervalued opportunities, explore the Most Undervalued Stocks list.

Outlook & Guidance

Chevron anticipates continued growth, projecting an additional $12.5 billion in free cash flow by 2026. The company expects production growth at the top end of its 6-8% guidance and forecasts significant synergies from the Hess merger. Upcoming Investor Day on November 12 will provide further insights into Chevron’s strategic direction.

Executive Commentary

CEO Mike Worth highlighted Chevron’s strengthened position, stating, "We’re now the largest leaseholder in the Gulf Of America and our overall US production is nearly 60% higher than it was just two years ago." Vice Chairman Mark Nelson emphasized the importance of exploration, noting, "Exploration will continue to play an important part in building our future portfolio."

Risks and Challenges

• Volatility in commodity prices could impact revenue.
• Integration risks associated with the Hess merger.
• Regulatory changes in key markets.
• Potential geopolitical tensions affecting operations.
• Competition in the energy sector.

Q&A

During the earnings call, analysts questioned Chevron’s strategy in Venezuela and compliance measures. The company also provided insights into its LNG strategy and portfolio optimization, highlighting its focus on managing the Permian and shale portfolios effectively.

Chevron’s Q2 2025 results underscore its operational strengths and strategic initiatives, with investors responding positively to its earnings performance and growth outlook. InvestingPro subscribers have access to 8 additional exclusive ProTips and comprehensive analysis through the Pro Research Report, one of 1,400+ deep-dive reports available on the platform. These reports transform complex Wall Street data into clear, actionable intelligence for smarter investing decisions.

Full transcript - Chevron Corp (CVX) Q2 2025:

Katie, Conference Facilitator: Good morning. My name is Katie, and I will be your conference facilitator today. Welcome to Chevron’s Second Quarter twenty twenty five Earnings Conference Call. At this time, all participants are in listen only mode. After the speakers’ remarks, there will be a question and answer session and instructions will be given at that time.

As a reminder, this conference call is being recorded. I will now turn the conference call over to the Head of Investor Relations of Chevron Corporation, Mr. Jake Spearing. Please go ahead.

Jake Spearing, Head of Investor Relations, Chevron Corporation: Thank you, Katie. Welcome to Chevron’s Second Quarter twenty twenty five Earnings Conference Call and Webcast. I’m Jake Spearing, Head of Investor Relations. On the call with me today is our Chairman and CEO, Mike Worth our Vice Chairman, Mark Nelson and our Vice President and CFO, Humor Bonner. We will refer to the slide and prepared remarks that are available on Chevron’s website.

Before we begin, please be reminded that this presentation contains estimates, projections and other forward looking statements. A reconciliation of non GAAP measures can be found in the appendix of this presentation. Please review the cautionary statement and additional information presented on slide two. Now, I will turn it over to Mike.

Mike Worth, Chairman and CEO, Chevron Corporation: All right, thanks Jake. In the second quarter, Chevron achieved several important milestones, continuing the momentum we’ve been building over the last year. The success underpins strong financial results, industry leading free cash flow growth and superior distributions to shareholders. Production was a quarterly record for the company, both in The US and worldwide. In the Permian, production averaged more than 1,000,000 barrels of oil equivalent per day, a target we introduced over five years ago and achieved right on schedule.

In June, we acquired lithium rich acreage in Texas and Arkansas, our first step toward establishing a scalable domestic lithium business. And we returned over $5,000,000,000 to shareholders for the thirteenth consecutive quarter. Two weeks ago, we achieved a favorable arbitration outcome and closed our merger with Hess, bringing together world class assets, people and capabilities to create a premier international energy company. This adds long term low cost growth in Guyana. The Bakken expands our shale portfolio to 1,600,000 barrels of oil equivalent per day.

We’re now the largest leaseholder in the Gulf Of America and our overall US production is nearly 60% higher than it was just two years ago. Our combined upstream portfolio has interest in some of the most attractive basins in the world, and is forecast to lead the industry in total cash generation over the remainder of the decade. We’ve been actively preparing for integration for nearly two years. Since the announcement, we’ve repurchased more than half of the shares issued for the transaction. We now expect to realize the full $1,000,000,000 in annual run rate synergies by the end of this year, six months faster than our original guidance.

We anticipate the transaction to be cash flow accretive per share in the fourth quarter. Last week we completed the sale of our interest in the Thailand and Malaysia joint development area, and this week John Hess was elected to and actively participated in Chevron’s Board of Directors meeting. The deal was good when we announced it and has only gotten better. Now I’ll turn it over to Mark to cover our operational achievements.

Mark Nelson, Vice Chairman, Chevron Corporation: Thanks Mike. Shepherd has been producing in the Permian Basin for a hundred years. Our unique position traces its roots back to the Texas Pacific Land Trust and now contains more than 2,000,000 net acres and an advantage mineral interest. We produce nearly as many royalty barrels as the next three largest royalty producers combined, with mineral holdings that benefit around 75% of our total Permian acreage. Over the last five years, we’ve nearly doubled production organically while capturing significant efficiencies.

Improved well and completion designs, reduced cycle times, and technology deployment have led to a 30% reduction in development and production unit costs. We expect costs to decline further as we shift our focus to free cash flow generation. With our advantage royalty position, we believe our portfolio is unmatched. Our scale, technological capabilities and focus on capital discipline position us to continue leading the basin and returns long into the future. Across our portfolio, we have a long history of taking good assets and making them better.

Our large complex facilities in Kazakhstan and Australia are operating well above design capacities and we continue to find opportunities to improve. In our deepwater assets, we have a track record of applying leading edge technology to unlock economic projects and increase resource recovery. We also continue to deliver top quartile turnaround performance. We used real time data analytics to complete our recent turnaround at Pascagoula on budget and ahead of schedule. And in the second quarter, we had our highest US refinery crude throughput in over twenty years, despite fewer refineries today, highlighting the success of recent optimization efforts.

We have strong base assets and we’re leveraging our capabilities to capture more value across our global portfolio. Just as we have enhanced our portfolio, we’ve also restructured our work. In upstream, we’ve reduced the number of reporting units by approximately 70%, bringing together similar assets such as our shale and tight businesses in the Permian, the DJ, the Bakken and Argentina, enabling us to scale best practices faster, standardize solutions, and streamline support. Our engineering hubs are designed to drive standardization, efficiency, and value. We’re already seeing benefits today through centralized well design and turnaround planning.

And we expect faster innovation and scaling of solutions like artificial intelligence to optimize fracs in real time and accelerate exploration data analysis among other use cases. This improved operational efficiency and execution supports our targets of $2,000,000,000 to $3,000,000,000 in structural cost reductions by the 2026. Through deep technical acumen, operational best practices, and great people, we expect to drive continued performance improvement across all asset classes. Now, I’ll turn it over to Eemer to discuss the financials.

Humor Bonner, Vice President and CFO, Chevron Corporation: Thanks Mark. For the second quarter Chevron reported earnings of $2,500,000,000 or $1.45 per share. Adjusted earnings were $3,100,000,000 or $1.77 per share. Included in the quarter were special items related to the fair value measurement of Hess shares, company pension curtailment costs and the gain on sale of assets, resulting in a net charge of $215,000,000 Foreign currency effects decreased earnings by $348,000,000 Organic CapEx was $3,500,000,000 our lowest quarterly total since 2023, while delivering significant volume growth. Inorganic CapEx was approximately $200,000,000 primarily related to the acquisition of Lithium Acreage.

Chevron generated cash flow from operations excluding working capital of $8,300,000,000 Adjusted free cash flow, which includes equity affiliate loans and asset sales, was $4,900,000,000 representing a 15% increase quarter on quarter, despite 10% lower crude prices. These results were driven by our organic high margin production growth, strong reliability and continued commitment to capital discipline. Adjusted second quarter earnings were down $760,000,000 versus last quarter. Adjusted upstream earnings decreased due to lower realizations, higher DD and A from increased production, and unfavorable tax impacts. Adjusted downstream earnings were higher due to improved refining margins and higher volumes.

Second quarter oil equivalent production was up over 40,000 barrels per day from last quarter, Due to strong performance in our base business and solid execution in our growth assets in the first half of the year, we now expect production growth to be closer to the top end of our 6% to 8% guidance range, excluding Hess. Over the last year, we’ve consistently delivered key project milestones that we expect to drive industry leading free cash flow growth. At TCO, FTP is producing at full rates. In The Gulf Of America, we’re ramping up production from recent major project startups. In the Permian, we achieved a significant production milestone and are beginning to moderate growth, reduce CapEx, and increase free cash flow.

And we’re already realizing structural cost benefits and expect to lock in 1,500,000,000.0 to $2,000,000,000 of annual run rate savings by year end. The integration of legacy HEF assets is expected to contribute additional free cash flow, more than covering the incremental dividend from the merger share issuance. All of this leads us to increase our twenty twenty six additional free cash flow guidance to $12,500,000,000 We’re building on our strong momentum to deliver sustained long term value. I’ll now hand it off to Jake.

Jake Spearing, Head of Investor Relations, Chevron Corporation: That concludes our prepared remarks. Additional guidance can be found in the appendix to this presentation, as well as the slides and other information posted on chevron.com. And we look forward to sharing more with you at Chevron’s Investor Day on November 12 in New York City. We are now ready to take your questions. We ask that you limit yourself to just one question and we will do our best to get all of your questions answered.

Katie, please open the lines.

Katie, Conference Facilitator: Thank yourself to one question. If your question has been answered or you wish to remove yourself from the queue, please press 2. If you’re listening on a speaker phone, we ask you please lift your handset before asking your question to provide optimum sound quality. Our first question comes from Biraj Borkhataria with RBC.

Biraj Borkhataria, Analyst, RBC: Hi, thanks for taking my questions. So firstly, congratulations again on the arbitration win. Nice to get that uncertainty behind you. I wanted to ask and pick up on the comments you made in the Permian. You obviously hit a milestone in the second quarter with the production at 1,000,000 barrels of oil equivalent and now talking about moderating spend.

Are you able to give us a sense of what we should expect in terms of 2627 budget and capital spend versus what you’re spending in 2025? Thank you.

Mark Nelson, Vice Chairman, Chevron Corporation: Biraj, thank you for your recognition of the arbitration outcome as well as the performance of our Permian team. Think I would start just by reminding everybody of the foundation of that performance. And it’s that large acreage position that we have that has very low breakevens and a royalty advantage that quite frankly is very tough, if not impossible to replicate at a reasonable price today. And that allows us to structurally have better returns and allows us to sustain performance and cash flow generation. With this intentional shift, you remember that we put peak CapEx well behind us here not too long ago, and we talked about in 2025 having capital spend between 4 and a half to $5,000,000,000 You should expect us to be in the lower end of that range as we finish 2025, given the efficiencies we brought to bear.

As we deliver that free cash flow growth of 2,000,000,000 next year in the Permian, I think you should see that drop further as we continue to manage a sustained performance in the Permian. So, more to come there in our Investor Day, but we’re definitely drawing down our CapEx and generating a lot more free cash flow.

Katie, Conference Facilitator: Thank you. We’ll go next to Neil Mehta with Goldman Sachs.

Neil Mehta, Analyst, Goldman Sachs: Hey, good morning, Mike and team again. Congrats on Hess. We really appreciate the updated waterfall here. And so, Mike, maybe you could just spend some time, you know, talking about how much of the $10,000,000,000 in the standalone you feel like you’ve derisked and your confidence interval on each of those four buckets. And then maybe some of the key assumptions that went into the $2,500,000,000 for Hess and recognizing you’re going to pack more of this for us on November 12.

Mike Worth, Chairman and CEO, Chevron Corporation: Yeah, Neil, thanks. In a word, our confidence level is high. I’m going let Emer walk you through each of the buckets.

Humor Bonner, Vice President and CFO, Chevron Corporation: Morning, Neil. Yeah, so starting with the $10,000,000,000 if you look at the waterfall and the upstream catalyst, starting with TCO, I mean TCO has ramped up, it’s producing at full rates, and so we’ve de risked that production profile. Next, we’ve got Permian. Mark talked about this significant milestone over the second quarter. So we’ve ramped up and are producing at those rates and that’s de risked as well.

Gulf Of America, our three projects, our major capital project startups are behind us. Those assets are ramping up to some additional ramp to go between this year and next year. And then the balance is really the cost reduction program. We’re on track to deliver our capital program consistent with our budget and our 2,000,000,000 to $3,000,000,000 of cost reduction that’s on its way. We made a lot of progress, we’re anticipating that to show up more in the bottom line at the back end of the year and into the year.

So all in all, $10,000,000,000 is de risked and on track. The incremental $2,500,000,000 that we guided to this morning associated with Hess is coming from two places. First, the synergies, Mike talked about that, the synergies we are committed to delivering $1,000,000,000 of run rate synergies by the end of the year. And then the balance is coming from production growth over the next couple of years with a fourth FPSO coming online this year and a fifth next year. So that’s the rack up of the $12,500,000,000 And, in summary, a lot of these, big milestones are behind us and we’re on track.

Jake Spearing, Head of Investor Relations, Chevron Corporation: Thanks, Neil.

Katie, Conference Facilitator: We’ll take our next question from Devin McDermott with Morgan Stanley.

Devin McDermott, Analyst, Morgan Stanley: Hey, good morning. Thanks for taking my question. So, Mark, I wanted to dive in a bit more detail to some of the business reorganization. I appreciate the comments you gave in the prepared remarks and the slide on the new structure. I was wondering if you could contrast this new organizational structure versus what Chevron currently has.

How did you arrive at the inclusion that these were the right adjustments to make? And I think the cost reduction improvements that come along with are pretty clear, but what are some of the other tangible benefits you’re expecting areas like operational execution, major project delivery or turnaround efficiency?

Mark Nelson, Vice Chairman, Chevron Corporation: Yeah, thanks Devin, thanks for the question. You know, to put the changes we’re making in context, you’ll recall that our portfolio certainly has more scale over time and more scale in specific asset groups or asset classes. And of course, technology continues to evolve. So with that backdrop and the fact that we come from a decentralized kind of operating model where we really get things done locally and have very strong relationships locally, we wanted to build on that to unlock incremental value. Maybe the safest way to think about it would be in three ways.

First, we’re gathering like businesses together. So the traditional phrase would be asset classes, but think of our deepwater well design, you know, we’ve reduced cost in the Gulf Of America by 30% and now we’re applying that same approach very quickly into the Angola’s, Nigeria’s and other deepwater locations around the operation. So it’s an opportunity to accelerate the application of best practices. And then standardizing and grouping work to fully leverage scale in technology. Think of our digital twins and the ability to do turnaround planning in anywhere in the world for a facility that could be on the other side of the world and demonstrating world class performance.

We have multiple examples of that. And then finally, although we are reducing our total number of headcount, the ability to enable our people to get things done in a simpler way is all part of this. I expect to see more than just cost reductions, expect to see performance improvement across the system.

Jake Spearing, Head of Investor Relations, Chevron Corporation: Thank you, Devin.

Katie, Conference Facilitator: Thank you. We’ll take our next question from Steve Richardson with Evercore ISI.

Steve Richardson, Analyst, Evercore ISI: Hi, good morning. Thanks. I was wondering if we could zoom out a little bit. Appreciate the previous comments from Mark about the Permian, but I was wondering if we could talk about the broader tight oil portfolio now that you’ve you’re in process on integrating Hess. And so how should we think about the Permian, DJ, Bakken as a whole balancing growth and free cash generation and sort of the role of tight oil in the broader portfolio on a go forward basis?

Mike Worth, Chairman and CEO, Chevron Corporation: Yeah, Steve, we really have a position that a few years ago, I’m not sure we could have imagined as we were ramping up in the Permian and at, you know, a few 100,000 barrels a day. If you take the Permian a million a day, the DJ at nearly 400 a day, the Bakken at 200 a day, that’s 1,600,000 barrels a day. That’s larger than a lot of companies. And now as we consolidate Hess’ production, we’re going be pushing up close to 4,000,000 barrels a day. So that’s 40% of our production in shale and tight.

So a substantial portion of our overall upstream. Certainly one of the criticisms of operators in the shale over the years has been all the cash goes right back into growth. And investors didn’t see a lot of it. At 1,600,000 barrels a day, if we can apply the capital efficiencies that Mark has described, operating efficiencies and drilling and completion efficiencies as well to hold production at a plateau for years and years and years. The amount of cash that that can throw off for investment across the rest of the portfolio is very meaningful.

And that cash also of course supports balance sheet strength, the dividend and the share repurchase. And so we want to see a balanced portfolio with both short and long cycle investments. You know, those of you that have been around for a while remember a decade ago when we were overweight on long cycle, it was a long wait to see some of that production arrive. And so we intend to have a nice balanced mix within our portfolio, across geographies, across asset classes, across segments of the business, with a real focus on using that to deliver steady, predictable, reliable cash that, you know, large portion of it will be returned to shareholders. So, we’re very pleased to have such a large shale portfolio.

And at some point, you know, is less the objective than free cash flow. You know, we’re approaching that point.

Katie, Conference Facilitator: Thanks, Steve. We’ll take our next question from Doug Leggate with Wolfe Research.

Doug Leggate, Analyst, Wolfe Research: Good morning, everyone. Mike, I still haven’t got the whiskey, but I’m holding out hope. So congratulations again.

Mike Worth, Chairman and CEO, Chevron Corporation: All right. Well, I’ll hold out with you.

Doug Leggate, Analyst, Wolfe Research: We’ll take it offline. I have a very specific question, actually, as a follow-up to Steve’s question on the Bakken. Hess was kind enough to report their US business separate from international. And even with the synergies, The US business under their reporting would still be free cash flow negative. And the reason for it of course is they pay out significant dividends or tariffs rather to Hessam.

My question is, this a core business for Chevron? Because a few years ago they talked about a ten year inventory. Today it’s probably a five year inventory, but it is free cash flow negative. So, in the context of what you’re prioritizing, what is the role of the Bakken specifically in your portfolio?

Mike Worth, Chairman and CEO, Chevron Corporation: Yeah, I’ll let Mark talk about that.

Mark Nelson, Vice Chairman, Chevron Corporation: Thanks for the question, Doug. Stepping back, would say we’re excited to add the position North Dakota to our shale and tight portfolio. Mike mentioned, our view is today it generates solid cash flow when you look at the entity in total. And we’ve learned from our experience integrating Noble and PDC, the team to step back and look at both the talent and the assets that we’re acquiring here. We’ve come to know the Hess team very well, they do some things very well in the Bakken.

And we’ve obviously got our own capabilities in unconventional. So, we look forward to bringing those together. We haven’t made any long term development plans just yet, but we’ll talk about that more in our Investor Day. I think your comment is linked to Hess Midstream. And obviously that is a bit of a unique financing structure and my personal belief is that that can be more efficient.

It’s different than some other midstream elements that we have divested of. It’s different in its size and its structure and obviously its logistic linkage to the Bakken. We’ll be value driven regard to how we handle that over time and we can talk about that more in our Investor Day in November. Thanks, Doug.

Katie, Conference Facilitator: We’ll take our next question from Jean Ann Salisbury with Bank of America. Hi, good morning. Can you just recap how things stand in Venezuela for you today? Are the production levels and contract structures basically as they were prior to all the movement there year to date?

Mike Worth, Chairman and CEO, Chevron Corporation: Yeah, Jean Ann, thanks. You know, I’ll just remind everybody, we’ve been operating in Venezuela for over one hundred years and believe our presence has played an important role in regional energy security as well as maintaining American economic interests. Since our license changed in May, we’ve been engaged with the US government working closely with the administration to ensure our compliance with our country’s policies towards Venezuela. This month, it looks like there will be a limited amount of oil that will begin flowing to The US from the Venezuela operations that we have an interest in consistent with US sanctions policy. And crude from Venezuela is sought after and very valuable to US Gulf refiners that are specifically built to process heavy grades like that and so it serves as a reliable source of supply for the American economy.

We don’t expect the flows from Venezuela will have a material impact on our results here in the third quarter. Although it will, you know, at the margin help satisfy some of the debt we’re owed. And over time, we hope to continue recovering that. And I’ll just end by saying, as in all countries where we have a presence, we’ll continue to operate in accordance with all applicable laws and regulations in any US sanctions regime or policies. That includes Venezuela.

Katie, Conference Facilitator: Thanks Jean Ann. We’ll go next to Ryan Todd with Piper Sandler.

Jake Spearing, Head of Investor Relations, Chevron Corporation0: Great, thanks. Congratulations on a strong quarter and in particular strong operational performance right now. I think if you look at across the portfolio with the timing and the ramps, successful ramps on multiple projects from the Gulf Of Mexico, Permian hitting the million barrel a day target, an impressive ramp at Tanguis and even Australian LNG, which hasn’t always been the greatest operations operating at 7% above nameplate right now. So what has worked well of late as you look across the operational portfolio and how do you continue to build on that momentum going forward?

Mark Nelson, Vice Chairman, Chevron Corporation: Ryan, thanks for the acknowledgement. That’s all that improvement you described on the backs of a lot of people across our portfolio. So, thank you. Thank you for that. I would step back on two things.

I would say operational efficiency when it comes to production and turnaround management are two areas that have driven a lot of our improvement over time. So, you’ll note that in our downstream portfolio, our refinery throughput hit a new record, which was mentioned in the formal remarks. Driven by the startup of a light tight oil project in Pasadena that quickly ramped up to nameplate capacity. It was also linked to some very, very successful turnarounds. In fact, 14 of our last 16 turnarounds on our major assets, both in the refining sector and in our LNG facilities.

14 out of 16 have been quartile performance in regard to duration. So, the team is doing a really good job of driving our turnaround performance to kind of competitive leading benchmark activity. And then the final thing would just be efficiency on all of our base assets. So, in the Gulf Of America, our base assets continue to perform well as we leverage previous investments. In fact, production efficiency for the whole portfolio is up one to 2% year to date.

So we’ll continue pressing forward and you should expect more of the same. Thank you, Ryan.

Katie, Conference Facilitator: We’ll go next to Paul Cheng with Scotiabank.

Jake Spearing, Head of Investor Relations, Chevron Corporation1: Hey. Good morning. Mark and, Mike, if we look at today, as you say, I mean, that, Post has, about 40% of your production from The US shale, and they have a different risk profile and everything. So I’m trying to understand that how important going forward the exploration fit into your overall portfolio. I think that many years ago that we would say, Oh, exploration, you want to be targeting that organically.

We pay 100% of your resource than your production. But with 40% of your production basis on there, what is the right target going forward for you guys? And do you think that you have, the right program? Because frankly, that the last several years, that exploration program from you, may not have yield, the result that you may want. So I want to see that, do you happy with the result?

And if not, what changes that you think you need to make over there? Thank you.

Mike Worth, Chairman and CEO, Chevron Corporation: Yeah, Paul, thanks for that. I’m not happy with the results out of exploration over the last few years, but I want to acknowledge our exploration team has been operating in a pretty narrow range. We’ve reduced our investment for the reasons you point out. We’re seeing big resource and reserve ads from our shale business for many years. And we were really serious about capital discipline and so as we’re ramping up the spending on that, we pulled back and focused into a pretty narrow range of activities.

As we move towards a plateau and as earlier I talked about the need for a balanced and diversified portfolio, exploration needs to play an important role and we are making some changes to our program and our approach. I’ll let Mark give you some highlights on that.

Mark Nelson, Vice Chairman, Chevron Corporation: Yeah, thanks Mike. And Paul, for the thanks for the question. You know, exploration will continue to play an important part in building our future portfolio. I think in the past, Paul, we’ve talked about ensuring that we have a balanced portfolio for exploration. That means, mature areas near existing infrastructure and early high entry, or early entry, high impact frontier areas.

So, one’s about replenishing resources for investments we’ve already made and the other would be resources for the future. That philosophy hasn’t changed. We’ve just opened the aperture a bit to lean in a bit more. And I think you have seen us have success in our infrastructure enabled exploration here over the last few years thinking about the Gulf Of America, Nigeria, the partition zone, and Angola. And then we’ve been restocking the covered, if you will, when it comes to frontier acreage.

We’ve added over 20% we’ve increased our portfolio by over 20% as you look over the last couple of years. And as you look towards the end of this year, you’ll see us put down wells in the Suriname, Namibia, and Egypt in those frontier type of offerings. And so, when you think about that, applying more attention to it, as well as us making some operational changes where we’ve streamlined our exploration organization and have brought in the talent of the Hess team as well as some others, I think you’ll start to see best build on the positive momentum that we have on our infrastructure finds. Thanks, Paul.

Mike Worth, Chairman and CEO, Chevron Corporation: And it will be an area, Paul, maybe just to tack on one other thing. Mark talked earlier about some of the more centralized decision making and execution. That’s another thing as we will, we’ll bring some of that decision making into a tighter group with an enterprise focus. Okay, thank you.

Katie, Conference Facilitator: We’ll take our next question from Arun Jayaram with JP Morgan.

Jake Spearing, Head of Investor Relations, Chevron Corporation2: Yeah, good morning. I was wondering if we could get a brief update on your Eastern Med Gas strategy and thoughts on potentially upgrading or doing expansion project at Leviathan as well as where Aphrodite sits in terms of your thoughts?

Mark Nelson, Vice Chairman, Chevron Corporation: Yeah, thanks Arun for the question. You know, given all that’s been going on in Eastern Mediterranean, our focus has been on keeping our people safe and maintaining energy supply to the region that so desperately needs it. The teams have done really good work on Tamar and Leviathan to keep our growth projects there moving. And so we do expect those to come online late this year, early next year. And you’ll recall that, you know, those two projects, you know, essentially increase our production capacity by about 25% over the next couple of years.

And we see more growth potential in the region in general. Cyprus is part of that equation or Aphrodite project that we’re doing front end engineering today. We’ve made good progress with our with the government there. And we’ve got approved plans to push ourselves towards FID. The initial development in Cyprus, you know, was for an FPU.

And I think we’ll build something that leverages the Egypt market as well over time as maybe the regional market. So more to come in regard to FID, but we’ll make sure we have competitive returns before we proceed on the Aphrodite project. Thanks Arun.

Katie, Conference Facilitator: We’ll take our next question from Josh Silverstein with UBS.

Jake Spearing, Head of Investor Relations, Chevron Corporation3: Thanks. Good morning, guys. You highlighted the strong operational performance at TCO and it’s producing 18% above nameplate. Is this just at FGP or the whole project? And maybe if you can give us kind of the forward outlook here, is it kind of sustainable at this level and any sort of other debottlenecking opportunities?

Thanks.

Mark Nelson, Vice Chairman, Chevron Corporation: Yeah, Josh, thank you. We are very pleased with the performance of our whole Tengiz operation there, the team’s worked hard. Think the, starting all the way back to the thirty days ramp up of FGP to nameplate, the team just has built on that momentum. Maybe the thing that excites me the most, and it gets to maybe your question is the integrated operation control center that was a part of our future growth project investment allows both the previous investments all the way back to our first generation investments to the recent projects that were commissioned and started up. It allows that whole system to be optimized.

So, wells, plants, everything. And I think we’re just scratching the surface as to what potential that has over time. When I talked in my prepared remarks about the performance being above nameplate, that’s obviously the first and second generation projects, which are as you described 18% above nameplate. We see the same type of opportunities as we now look at the whole integrated system. And in the fourth quarter we’re planning a pit stop for maintenance activities that allows us maybe to continue to improve our operations there and build on the positive momentum we have.

Thanks, Josh.

Katie, Conference Facilitator: We’ll go next to Betty Jiang with Barclays.

Jake Spearing, Head of Investor Relations, Chevron Corporation4: Hi, good morning. Thank you for taking my question. I actually want to ask about the Affiliates distribution and that actually ties to the TCO outperformance as well. Second quarter really stood out from how strong the cash flow generation was. And a part of that is the Affiliates distribution much higher highlighting the outperformance in TCO.

Just wondering how you see that evolving, especially with the performance you’re seeing at the asset. Could we see some upside to that distribution number for ’25 and ’26?

Humor Bonner, Vice President and CFO, Chevron Corporation: Morning, Betty. It’s Imer here. I’ll take that one. Yeah, to Mark’s earlier point, the ramp up on TCO went really well in the first quarter, much faster than anticipated. So over the second quarter, we had higher production sustained for the entire quarter.

Coupled with the prices that we saw, I mean, the beginning of the quarter, prices were lower when we give the guidance. I think they were in the low 60s. And we saw higher prices during the quarter. So the combination of both higher prices and higher production is the result of that is the higher distributions that you saw in second quarter. Going forward, what I point out is in the third quarter, we’ll see the first loan repayment and we’ll see that coming through in our adjusted free cash flow metric that now includes distributions from equity affiliates.

So that’s what you can expect to see in addition to the guidance around affiliate distributions that we’ve shared today. Thanks for the question.

Katie, Conference Facilitator: Thank you. We’ll go next to Lucas Herman with BNP Paribas.

Jake Spearing, Head of Investor Relations, Chevron Corporation5: Yeah. Thanks very much. Ima, sorry, just going back to the last question before I come on to what I wanted to ask you. Just to be clear, £1,000,000,000 of loan repayments you’re saying will go through CFFO, I will be included in the affiliates line?

Humor Bonner, Vice President and CFO, Chevron Corporation: No. Look, as it goes through distributions, more or less equity affiliates is what the operational distributions go through. The loan repayment goes through cash from investing. But in the adjusted free cash flow metric that we shared today, we will be combining both of those. So they’re flowing in different parts of the cash flow statement, but the combination will be in the adjusted free cash flow.

Katie, Conference Facilitator: We’ll take our next question from Nitin Kumar with Mizuho.

Doug Leggate, Analyst, Wolfe Research: Hi, good morning and thanks for taking my question. Maybe I’ll take advantage of Mark being on the call. You talked about EURs in the Gulf Of America being 9% above what you expected. Could you maybe talk a little bit about what you’re seeing there? Is it reservoir?

Is it operations? And how does that change the view of the Gulf Of America within your portfolio in terms of investment?

Mark Nelson, Vice Chairman, Chevron Corporation: Yeah, thank you for the question. We’re actually very pleased with our performance in Gulf Of America. You know, the strong performance will take that 300,000 barrels a day that we’ve talked about in 2026 and likely put that through the remainder of the decade. And it’s really a combination of two things. It’s the ramp up of our anchor, whale and Baltimore investments, and it’s the performance and fully full leverage of our base assets.

I’ll focus on that. You know, we’ve been in the Gulf Of America for nearly a hundred years. And the improved recovery that you’re seeing from our base assets is really from from stage developments, either waterflood, subsea multi phase pumping, and or well stimulation programs. And I’ll use Tahiti as an example that, you know, the Tahiti project has actually reached its nameplate capacity twice in its history over four different stage developments. And then Jack St.

Malo has had six developments over its period of existence. And so, reality here is we’re committed to fully leveraging our base assets to take them as far as we can be. With the addition of Hess, we become the largest leaseholder, as Mike mentioned in his comments, in the Gulf Of America. And 80% of those leases are adjacent to or within distance of tieback range for further investments over time. So, have an opportunity to have a continued high cash flow generating operation in the Gulf Of America going forward.

Mike Worth, Chairman and CEO, Chevron Corporation: And I think what Mark just described, you can expect projects like Anchor, Ballymore, Whale all to have this type of follow on development. And those fields are likely to yield a very similar story to what Mark just described.

Katie, Conference Facilitator: Thank you. We’ll take a question from Lucas Herman with BNP Paribas.

Mike Worth, Chairman and CEO, Chevron Corporation: Welcome back Thank

Biraj Borkhataria, Analyst, RBC: you.

Jake Spearing, Head of Investor Relations, Chevron Corporation5: Sorry, I’ve got a couple, but let’s just start on this. LNG, I mean, of the things that you’ve highlighted in your summary slide this morning is that you’ve increased your LNG offtake capacity to 7,000,000 tonnes per annum, and a lot of that comes on stream quite late this decade. So really, the question is simply the approach of strategy because what I haven’t seen from yourselves is placing that, should we say, with end markets. So it’s a question around how much risk you’re willing to take on and the extent to which the $7,000,000 that is going to be flowing into the portfolio will largely be used. How do you see balancing it?

How much will end up being long term placing back to back? How much of it do you want the flexibility to play more short term?

Mike Worth, Chairman and CEO, Chevron Corporation: Yeah. Look, we’ve executed some off take agreements that you might not be aware of. And so we’re we’re actually placing some of that volume out there, but there’s more to be done. I’m gonna let Mark talk to you a little bit about how we think about a larger LNG system and optimizing that.

Mark Nelson, Vice Chairman, Chevron Corporation: Yeah, Lucas, I think in the past when we’ve talked about this, we’ve talked about us kind of building a globally connected LNG portfolio. And remember, you know, we’re generating what 2.7 BCF of gas out of The United States in these offtake arrangements that we’ve built up out of The US Gulf Coast, I think it’s up to now about seven metric tons per year. It allows us to expose ourselves to multiple margin sets over time. So, this is a balanced offering when you think of our winning positions in of gas generation in Australia, and The US Gulf Coast in particular, it allows us to serve the global system and move product toward the margin best suits us over time. So, appreciate the question.

Katie, Conference Facilitator: Thank you. We’ll go next to Jason Gabelman with TD Cowen.

Jake Spearing, Head of Investor Relations, Chevron Corporation2: Hey, morning. Thanks for taking my question. I wanted to ask about capital distribution and specifically as it relates to the guidance that you provided when the HES deal was announced and this was discussed on the sell side call, but I’m still a little confused on the buyback outlook for next year. Should we expect a step up from the current rate by that $2,500,000,000 that you guided to when the HES deal was announced or is this kind of the rate we should expect in 2026? Thanks.

Mike Worth, Chairman and CEO, Chevron Corporation: Yeah, Jason, was a long time ago. And at the time, we anticipated a prompt approval and closure of the transaction. And we intended to retire shares on an accelerated basis to reduce the outstanding shares. In the interim, we’ve been delayed through the actions of others. And we’ve now actually purchased more than 50% of the shares that would have been issued for the, that were issued for the transaction.

We bought them back during the interim period of time and effectively accomplished what the increased buyback rate was intended to do. We also bought 5% of Hess’ outstanding shares at about $10 a share lower average than what we closed the transaction at. So, we were able to affect a little bit of a different strategy to retiring those shares than we had envisioned originally. We also were in a bit of a stronger commodity price environment at that time and we outlined a range. And so I think what I’d point you to is our Investor Day in November where we will have had a chance to bring together all the information now as we’ve integrated Hess and as part of that, of course, we’ll review our forward outlook and guidance for share repurchases.

And we’ll update you on that at that point in time.

Katie, Conference Facilitator: We’ll take our next question from Philip Jungworth with BMO.

Mark Nelson, Vice Chairman, Chevron Corporation: Thanks. Good morning. On Kazakhstan, the country has announced significant petrochemical investment and capacity growth plans through the decade. So, more broadly, can you talk about the importance of domestic oil and gas production to contributing to these or other power ambitions? And how untapped is the gas resource at Tinghiz?

Mike Worth, Chairman and CEO, Chevron Corporation: Yeah, it, you know, The Republic Of Kazakhstan has been looking to diversify their economy and to broaden out the ways they can utilize their energy wealth and abundance to participate in other parts of the value chain. Refining, petrochemicals, gas, all I think are of an interest to them. We engage in discussions with the republic and with our partner, the state, multiple state companies actually in the different segments there. And so, I do think you’re likely to see a continued appetite for further investment on the part of the Republic. There’s a lot of gas that’s associated with our field and other fields.

We reinject a large portion of that gas today. And then the other reality that, you know, the republic deals with is, some of the gas production volumes are not necessarily where the gas consumers are. And so they will tend to maybe sell the gas into the market or to their neighbor, Russia, and then buy back in another location. And so investment in domestic infrastructure to better connect production markets, I think is another thing that is likely to happen over time. And so, we try to be a good partner, we try to work closely to help evaluate these kinds of opportunities.

We haven’t participated in a petrochemical plant there for instance, although our affiliate Chevron Phillips Chemical has taken a look at that in the past. And I think you’ll continue to see us look to help the Republic achieve their economic and energy diversification goals.

Katie, Conference Facilitator: Thank you. We’ll take our final question from Jeff Jay with Daniel Energy Partners.

Jake Spearing, Head of Investor Relations, Chevron Corporation6: Hi, guys. Thanks for taking the question. It just seems to me that Chevron was kind of at the precipice of a multiyear, I guess, step change down in the capital intensity to feed the beast on the upstream side even before Hess, with tight oil hitting plateau levels and spend for several low decline, long cycle projects kind of in the rearview mirror. It seems to me that Hess deal kind

Jake Spearing, Head of Investor Relations, Chevron Corporation0: of makes that even better.

Jake Spearing, Head of Investor Relations, Chevron Corporation6: And I’m just curious, how do you think about Chevron’s overall reinvestment and decline rates over the next few years as a result of the deal closing?

Mike Worth, Chairman and CEO, Chevron Corporation: Yeah, thanks Jeff. You’re right. We’re, might say we’re the precipice of a wide expansion in free cash flow rather than a sharp decline in CapEx. We’ve got a business that a couple years ago was 2,900,000 barrels a day in the upstream. We’re going to end this year close to 4,000,000 barrels a day.

So a larger system does require a certain amount of capital to keep it running. But you’ve characterized the approach to shale well, which I touched on earlier. We’ve got a portfolio that’s deep with opportunities around the world. It’s a mix of near term growth longer dated resource options. We intend to be active in exploration, as Mark said, in the Gulf Of America, West Africa, Egypt, Suriname, Namibia, other places.

We’ve got projects like the Eastern Med opportunity that we talked about. We’re investing in petrochemical projects in both The US and The Middle East. And so, I think from a capital standpoint, what you should expect CapEx will step up a little bit with Haas because the Guyana development and the Bakken are both going to require capital to support them. But overall, our MO or our reputation for capital discipline will remain. And so I think you can expect us to challenge ourselves to only invest in the best opportunities, to divest assets out of the portfolio that don’t compete for capital in a tight capital environment and might fit better for others.

And really be focused on delivering strong returns and free cash flow to support distributions to shareholders across a really advantage portfolio, which of course we will continue to look for opportunities to make even stronger. Thank you for that question. And before, I don’t know if you’re gonna sign us off, Jake or our operator will, but I just wanna, I wanna thank everybody for your questions and interest today and remind you that as Jake noted upfront, we will have another Investor Day. It’s been a while. But on November 12 in New York City, back at the St.

Regis, for those of you that have been with us for a while, we will be holding our Investor Day and we look forward to sharing with you how we view our new and stronger portfolio, our differentiated portfolio. To reiterate the consistency in our strategy and our fundamental commitment to capital discipline and superior shareholder returns, and how we intend to continue to deliver growth and shareholder value into the future. So, I guess we’ll have one more of these calls before we see you at Investor Day, but mark that on your calendar and I look forward to seeing everybody in person.

Jake Spearing, Head of Investor Relations, Chevron Corporation: We appreciate your interest in Chevron and your participation on today’s call. Please stay safe and healthy. Katie, back to you.

Katie, Conference Facilitator: Thank you. This concludes Chevron’s second quarter twenty twenty five earnings conference call. You may now disconnect.

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