Q1 2024 Chevron Corp Earnings Call

Good morning, My name is Katie and I will be your conference facilitator today welcome to Chevron's first quarter 2024 earnings conference call. At this time all participants are in a listen only mode. After the Speakers' remarks, there will be a question and answer session and instructions will be given at that time if anyone.

Katie: Good morning. My name is Katie, and I will be your conference facilitator today. Welcome to Chevron's first quarter 2024 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's remarks, there will be a question and answer session, and instructions will be given at that time. If anyone should require assistance during the conference call, please press star then zero on your touchtone telephone. As a reminder, this conference call is being recorded. I will now turn the conference call over to the General Manager of Investor Relations of Chevron Corporation, Mr. Jake Spiering. Please go ahead.

It should require assistance during the conference call. Please press Star then zero on your Touchtone telephone as a reminder, this conference call is being recorded.

I will now turn the conference call over to the General manager of Investor Relations of Chevron Corporation, Mr. Jake Spearing. Please go ahead.

Jake Spiering: Thank you Katie welcome to Chevron's first quarter 2024 earnings conference call and webcast I'm, Jake sparing general manager of Investor Relations.

Jake Spiering: Thank you, Katie. Welcome to Chevron's first quarter 2024 earnings conference call and webcast. I'm Jake Spiering, General Manager, Investor Relations. Our Chairman and CEO, Mike Wirth, and CFO, Eimear Bonner, are on the call with me today.

Jake Spiering: Our chairman and CEO, Mike Wirth, and CFO heme or butter or on the call with me today.

Jake Spiering: We will refer to the slides 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. Reconciliation of non-GATT measures can be found in the appendix to this presentation. Please review the cautionary statement on slide two. Now, I'll turn it over to Mike.

Speaker Change: We will refer to the slides and prepared remarks that are available on chevron's website.

Speaker Change: Before we begin please be reminded that this presentation contains estimates projections and other forward looking statements.

Speaker Change: Reconciliation of non-GAAP measures can be found in the appendix to this presentation.

Speaker Change: Please review the cautionary statement on slide two.

Speaker Change: Now I'll turn it over to Mike.

Michael K. Wirth: Thanks, Jake, and thank you, everyone, for joining us today. Chevron continues to deliver strong operational performance, maintain cost and capital discipline, and consistently return cash to shareholders. The first quarter marked nine consecutive quarters with adjusted earnings over $5 billion and adjusted ROCE above 12%. During the quarter, we also returned $6 billion in cash to shareholders, the eighth straight quarter over $5 billion.

Michael K. Wirth: Thanks, Jacob and thank you everyone for joining us today.

Michael K. Wirth: Chevron continues to deliver strong operational performance maintained cost and capital discipline and consistently return cash to shareholders.

Michael K. Wirth: First quarter marks nine consecutive quarters with adjusted earnings over $5 billion and adjusted our oce above 12%.

Michael K. Wirth: During the quarter. We also returned $6 billion in cash to shareholders, the eighth straight quarter over $5 billion.

We also grew production more than 10% from the same quarter last year I don't know its final investment decisions to grow our renewable fuels and hydrogen businesses.

Michael K. Wirth: We also grew production more than 10% from the same quarter last year and announced final investment decisions to grow our renewable fuels and hydrogen business. Earlier this month, we announced our third future energy fund, focused on venture investments in lower carbon technology. The merger with Hess is advancing, and we intend to certify substantial compliance with the FTC's second request in the coming weeks. We believe that a preemption right does not apply to this transaction and are confident this will be affirmed in arbitration.

Michael K. Wirth: Earlier this month, we announced our third future energy fund focused on venture investments and lower carbon technologies.

Michael K. Wirth: The merger with Hess is advancing and we intend to certified substantial compliance with the FTC second request in the coming weeks.

Michael K. Wirth: We believe that a preemption right does not apply to this transaction and are confident this will be affirmed in arbitration.

Michael K. Wirth: We expect the proxy for the Hess shareholder vote to be mailed in April with a special meeting date in late May.

Eimear P. Bonner: We expect the proxy for the Hess shareholder vote to be mailed in April, with a special meeting date in late May. This strategic combination creates a premier energy company with world-class capabilities and assets to deliver superior shareholder value, and we look forward to bringing the two companies together. At TCO, we achieved startup of WPMP this month, with the first inlet separator and pressure boost compressor in service, and the conversion of the first metering station to low pressure now complete.

Michael K. Wirth: This strategic combination creates a premier energy company with world class capabilities and assets to deliver superior shareholder value and we look forward to bringing the two companies together.

Michael K. Wirth: At <unk>, we achieved startup of WP MP. This month with the first inlet separator and pressure boost compressor in service and conversion of the first major metering station to low pressure now complete.

Michael K. Wirth: Later this quarter, we expect a second pressure boost compressor online and a third gas turbine generator to provide power to the tengiz grid.

Eimear P. Bonner: Later this quarter, we expect a second pressure boost compressor online and a third gas turbine generator to provide power to the Tengiz grid. Metering station conversions are planned through the remainder of the year, as additional pressure boost compressors start up, keeping the existing plants full around the planned SGI and KTL turnaround. We continue to make significant progress on FGP and expect to have additional major equipment ready for operations in the third quarter. Cost and schedule guidance remain unchanged, with FGP expected to start up in the first half of 2020. Now, over to Eimear to discuss the financials.

Michael K. Wirth: Metering station conversions, our plans through the remainder of the year as additional pressure boost compressors startup.

Michael K. Wirth: Keeping the existing plants full around planned SGI and KTM turnarounds.

We continue to make significant progress on that GP. They expect to have additional major equivalent ready for operations in the third quarter.

Michael K. Wirth: Cost and schedule guidance remain unchanged with <unk> expected to startup in the first half of 2025.

Speaker Change: Now over to <unk> to discuss the financials.

Eimear P. Bonner: We delivered another quarter of strong earnings, ROCE, and cash returns to shareholders. We reported first quarter earnings of $5.5 billion, or $2.97 per share. Adjusted earnings were $5.4 billion, or $2.93 per share. Cash flow from operations was impacted by an approximate $300 million international upstream ARO settlement payment and $200 million for the expansion of the retail marketing network. We also had a working capital bill during the quarter consistent with historical trends. Chevron delivered on all of its financial priorities during the quarter, including an 8% increase in dividend per share.

Speaker Change: Thanks, Mike we delivered another quarter of strong earnings RFC and cash returns to shareholders. We reported first quarter earnings of $5 5 billion or $2 97 per share.

Speaker Change: Adjusted earnings were $5 $4 billion or $2 93 per share.

Speaker Change: Cash flow from operations was impacted by an approximate $300 million international upstream <unk> settlement payment and $200 million for the expansion of the retail marketing network.

Speaker Change: We also had a working capital build during the quarter consistent with historical trends.

Speaker Change: Chevron delivered on all of its financial priorities during the quarter.

Speaker Change: And 8% increase in dividend per share.

Eimear P. Bonner: Organic CapEx aligned with the rateable budget inclusive of progress payments for new LNG ships, sustained net debt in the single digits while issuing commercial paper to manage the timing of affiliate dividends and working capital and share repurchases of $3 billion. Adjusted earnings were lowered by $1 billion versus last quarter. Adjusted upstream earnings were down due to lower realisation and liquid lifting, partly offsetting favorable tax impacts.

Organic capex aligned with three out of a budget inclusive of progress payments for new LNG ships.

Speaker Change: <unk> net debt in the single digits, what issuing commercial paper to manage the timing of affiliate dividends and working capital.

Speaker Change: Share repurchases of $3 billion.

Speaker Change: Adjusted earnings were lower by $1 billion versus last quarter.

Speaker Change: Adjusted upstream earnings were down due to lower realization and liquid lifting.

Speaker Change: Partly offsetting where favorable tax impacts.

Speaker Change: Adjusted Dine stream earnings were lower mainly due to timing effects associated with a rising commodity price environment.

Eimear P. Bonner: Adjusted downstream earnings were lower mainly due to timing effects associated with the rising commodity price environment, all other decreased, higher employee costs, and an unfavorable swing in tax items. Adjusted first quarter earnings were down $1.3 billion versus last year. Adjusted upstream earnings were down modestly. Higher liftings were more than offset by lower natural gas realizations. DDNA was higher due to the PDC acquisition and Permian growth. Adjusted downstream earnings were lower mainly due to lower refining margins and timing effects.

Speaker Change: All other decreased and higher employee costs and an unfavorable swing in tax items.

Speaker Change: Adjusted first quarter earnings were down $1 3 billion versus last year.

Speaker Change: Adjusted upstream earnings were down modestly higher lifting for more than offset by lower natural gas realizations.

Speaker Change: DD&A was higher due to the PTC acquisition and Permian growth.

Speaker Change: Adjusted <unk> earnings were lower mainly due to lower refining margins and timing effects.

Speaker Change: Worldwide oil equivalent production was the highest first quarter in our company's history.

Jake Spiering: Worldwide oil equivalent production was the highest first quarter in our company's history. Production was up over 12 percent from last year, including an increase of 35 percent in the United States, largely due to the PDC energy acquisition and organic growth in the Permian Basin. Looking ahead to the second quarter, we have planned turnarounds at TCO and several Gulf of Mexico assets. Following another strong quarter in the Permian, production is trending better than our previous guidance, and we now expect first half production to be down less than 2% from the fourth quarter.

<unk> was up over 12% from last year, including an increase of 35% in the United States largely due to the PDC energy acquisition and organic growth in the Permian Basin.

Speaker Change: Looking ahead to the second quarter, we have planned turnaround to Tcl and several Gulf of Mexico assets.

Speaker Change: Following another strong quarter in the Permian production is trending better than our previous guidance and we now expect first half production to be down less than 2% from the fourth quarter.

Speaker Change: Impacts from refinery turnarounds are mostly driven by El Segundo enrichment.

Speaker Change: We anticipate higher affiliate dividends in the second quarter largely from Tcl.

Jake Spiering: Impacts from refinery turnarounds are mostly driven by El Segundo in Richmond. We anticipate higher affiliate dividends in the second quarter, largely from TCO. With the start-up of WPMP, we expect TCO's DDNA to increase by approximately $400 million over the remainder of the year. Share repurchases are restricted under SEC regulations through the Hess shareholder vote, after which we intend to resume buybacks at the $17.5 billion annual rate. We've published a new document with our consolidated guidance and sensitivities that will be updated quarterly and posted to our website the month prior to our earnings calls. Back to you, Jake.

Speaker Change: With the startup of <unk>, we expect <unk> to increase by approximately $400 million over the remainder of the year.

Speaker Change: Share repurchases are restricted under SEC regulations through the has shareholder vote after which we intend to resume buybacks at the $17 5 billion dollar annual rent.

Speaker Change: We published a new document with a consolidated guidance and sensitivities that will be updated quarterly and posted to our website the month prior to our earnings call.

Speaker Change: Back to you <expletive>.

Speaker Change: That concludes our prepared remarks, we are now ready to take your questions. We ask that you limit yourself to one question.

Speaker Change: We will do our best to get all of your question to answer.

Speaker Change: <unk> please open the lines.

Speaker Change: Thank you if you have a question at this time. Please press star one on your Touchtone telephone to allow for questions from more participants. We ask you limit yourself to one question. If your question has been answered or you wish to remove yourself from the queue. Please press star two if you're listening in on speaker phone, we ask you to please.

Jake Spiering: That concludes our prepared remarks. We are now ready to take your questions. Please limit yourself to one question. We will do our best to get all of your questions answered. Katie, please open the line.

Speaker Change: Lift your handset before asking your question to provide optimum optimum sound quality again, if you have a question. Please press star one on your Touchtone telephone.

Katie: Thank you. If you have a question at this time, please press star one on your touchtone telephone. To allow for questions from more participants, we ask you to limit yourself to one question. If your question has been answered or you wish to remove yourself from the queue, please press star two. If you are listening on a speakerphone, we ask you to please lift your handset before asking your question to provide optimum sound quality. Again, if you have a question, please press star one on your touchtone telephone. Our first question comes from Sam Margolin with Wolf Research.

Speaker Change: Our first question comes from Sam Margolin with Wolfe Research.

Sam Jeffrey Margolin: Hi, good morning, everybody. Thanks for taking the question.

Sam Jeffrey Margolin: Good morning, Sam.

Sam Jeffrey Margolin: Maybe we could start with <unk>.

Speaker Change: <unk>, because theres movement, there and specifically the effects of.

Sam Jeffrey Margolin: The WP NP startup if you don't mind going into some detail I think the market understands that it's FTP phase that.

Sam Jeffrey Margolin: Really re rates kind of Tcs distribution capacity, but if there's any if there's any incremental benefits from WP E&P starting up whether it's.

Sam Jeffrey Margolin: Hi. Good morning, everybody. Thanks for taking the question. Good morning, Sam.

Sam Jeffrey Margolin: Reliability or potential to produce over nameplate.

Michael K. Wirth: Maybe we could start with Tengiz, because there's movement there, and specifically the effects of the WP&P startup, if you don't mind going into some detail. I think, you know, the market understands that it's the FGP phase that really re-rates kind of TCO's distribution capacity. But, you know, if there's any incremental benefits from WP&P starting up, whether it's reliability or, you know, potential to produce over nameplate, or even just the CapEx run rate and what it means for maybe an annualized TCO distribution at this stage. That would be very helpful. Thank you.

Sam Jeffrey Margolin: Or even just the capex run rate and what it means for maybe an annualized <unk>.

Speaker Change: <unk> distribution at this stage that would be very helpful. Thank you.

Speaker Change: Yeah. So yeah, let me talk a little bit to the project and operational dimensions of this and then I'll, let <unk> comment on the financial.

Speaker Change: <unk> of that so look we're really pleased with the progress that has been making and pleased that we've begun the initial startup of <unk> with the first PBF compressor online.

Speaker Change: And processing crude through the plants after conversion of the first metering station.

Speaker Change: It's an important milestone and I'm proud of the team and the work they've been doing they've done. This safely. We are seeing initial operation that is well aligned with our expectations. In fact, we've been encouraged by very strong production response from the wells.

Michael K. Wirth: Yeah, Sam, let me talk a little bit about the project and operational dimensions of this, and then I'll let Eimear comment on the financial ramifications of that. So look, we're really pleased with the progress that's been made and pleased that, you know, we've begun the initial startup of WP&P with the first PBF compressor online and now processing crude through the plants after the conversion of the first metering station. It's an important milestone. I'm proud of the team and the work they've been doing. They've done this safely,

Speaker Change: That feed into this first metering station, we now have the second metering stations planned for conversion is offline and that conversion is underway.

Speaker Change: And as we bring on more of the PBF compression capacity will complete more metering stations over the balance of the year.

Speaker Change: It happens here is we had higher production because the wells are now flowing against lower back pressure.

Speaker Change: As I said, we've seen really strong response on this first set of wells what that does is it it gives us.

Speaker Change: A high degree of confidence in keeping the plants full all year long.

Speaker Change: With the with the fact that we've got some turnarounds we have to do we've got an SGI turnaround under Katie alternate around SG&A this quarter K till next quarter.

Michael K. Wirth: We're seeing initial operation that is well aligned with our expectations. In fact, we've been encouraged by very strong production responses from the wells that feed into this first metering station. We now have the second metering station planned for conversion offline, and that conversion is underway.

Speaker Change: Do some tie ins and some other normal maintenance, but in the periods in between those it increases deliverability and.

Speaker Change: And the confidence of the plant will be full throughout that period of time.

Speaker Change: <unk>.

Speaker Change: We've got a lot of project scope operational is the other thing that I just would remind you of we are producing from new wells. We've got upgraded a new utilities now gathering system, a new control center power distribution system to new big frame nine gas turbine generators in service of the reliability of the infrastructure and all of the Kantar.

Michael K. Wirth: And as we bring on more of the PBF compression capacity, we'll complete more metering stations over the balance of the year. What happens here is we get higher production because the wells are now flowing against lower back pressure. And as I said, Sam, we've seen a really strong response on this first set of wells.

Speaker Change: Troll networks and everything is significantly improved as we got more modern equipment in place.

Speaker Change: So.

Speaker Change: All of this reads through to a higher degree of reliability strong production performance and last year was the second strongest year in the past several.

Michael K. Wirth: What that does is it gives us a high degree of confidence in keeping the plants full all year long, with the fact being that we've got some turnarounds we have to do. We've got an SGI turnaround and a KTL turnaround this quarter, SGI this quarter, KTL next quarter to do some tie-ins and some other normal maintenance. But in the periods in between those, it increases deliverability, and, you know, the confidence of the plant that it will be full throughout that period of time.

Speaker Change: So it gives us high confidence in delivering what we've said we will deliver there.

Speaker Change: And then as we get into the third quarter, we'll start commissioning.

Speaker Change: The process equipment as part of <unk>, which as you say first half start up next year is when you see the incremental production.

Speaker Change: Come online so good progress all the way around reiterate that schedule and cost guidance are unchanged and we will continue to provide details each quarter on milestones and progress as we proceed here maybe you can just talk about what that means financially yes. Thanks, Mike Yes, some will after years of investing.

Michael K. Wirth: We've got a lot of project scope operational is the other thing that I just would remind you of. We're producing from new wells. We've got upgraded to new utilities now, a gathering system, a new control center, power distribution system, and two new big frame nine gas turbine generators in service. So the reliability of the infrastructure and all of the control networks, and everything is significantly improved as we've got more modern equipment in place. So, you know, all of this reads through to a higher degree of reliability and strong production performance. And, you know, last year was the second strongest year in the past several.

Speaker Change: The project starts up over the next couple of years, we do expect the Capex profile to continue to decline and that will enable free cash flow over the next couple of years to grow with W. P. M. P. It'll keep the plant full so this'll Ips business to generate.

Speaker Change: Significant cash and that will be available for four distribution.

Speaker Change: With the second phase of the project then next year in 'twenty five.

Speaker Change: Tcf is free cash flow is going to grow even even further because of that phase of the project, we get incremental production. So what does this mean for Chevron, we expect $4 billion of free cash flow in 2025 and $5 billion in 2026, and this is a $60 Brent.

Michael K. Wirth: So it gives us high confidence in delivering what we've said we'll deliver there. And then, as we get into the third quarter, we'll start commissioning some of the process equipment as part of FGP, which, as you say, the first half start-up next year is when you see the incremental production come online. So good progress all the way around. I reiterate that schedule and cost guidance are unchanged, and we'll continue to provide details each quarter on milestones and progress as we proceed. Amber, maybe you can just talk about what that means financially. Yeah, thanks, Mike.

Speaker Change: And this will flow to us through a combination of dividends. So you'll see this come through cash flow from operations and loan repayments, which will which will flow through.

Speaker Change: Cash for Fr for investing so we do expect dividends this year.

Speaker Change: We have guidance affiliate guidance to dividends for 2024, but we are also included in the deck today the outlook for affiliate dividends for the second quarter, one to one $5 billion.

Speaker Change: Significant portion of that is an assumption around the Orion Tcl.

Speaker Change: Thanks Sam.

Speaker Change: Thanks.

Speaker Change: Thank you we will go next to Neil Mehta with Goldman Sachs.

Eimear P. Bonner: So we do expect dividends this year. We have guidance, affiliate guidance for dividends for 2024, but we've also included in the deck today the outlook for affiliate dividends for the second quarter, $1 to $1.5 billion, and a significant portion of that is an assumption around TCO.

Neil Singhvi Mehta: Yeah, Good morning, Mike and <unk>.

Neil Singhvi Mehta: My question is really on the exploration program, specifically do you have an interesting position in West Africa, Namibia. So maybe you can just give.

Neil Singhvi Mehta: At some historical context of how you got involved here is this an asset that you see a lot of opportunity.

Neil Singhvi Mehta: Thanks, Sam. Thank you. We'll go next to Neil Mehta with Goldman Sachs. Yeah. Good morning, Mike and Eimear.

Neil Singhvi Mehta: Especially given some of the announcements from peers over the last couple of weeks and how do you think about prosecuting it going forward. Thank you.

Neil Singhvi Mehta: My question's really about the exploration program specifically.

Neil Singhvi Mehta: Thank you. We'll go next to Neil Mehta with Goldman Sachs. Yeah.

Michael K. Wirth: Yeah, thank you, Neil. We've got a nice portfolio of exploration opportunities around the world, including numerous prospects on Block 90 in the Orange Basin offshore Namibia, which lies just offshore, outbound of where there was a recent discovery announced by another company. We're planning to spud the first exploration well in that block late this year or early next year, based on rig availability. The rig will be completed in early November.

Speaker Change: Yeah. Thank you Neal we've got a nice portfolio of exploration opportunities.

Speaker Change: Around the world and including numerous prospects on block 90.

Speaker Change: In the Orange Basin offshore Namibia, which lies just out sure.

Speaker Change: Outbound of where there was a recent discovery announced by another company.

Speaker Change: We're planning to spud the first exploration well in that block late this year or early next year based on rig availability of the rig will be completed in early <unk>.

Speaker Change: <unk> 25.

Speaker Change: We farmed into another block block 82, which is further north in the water space and that was just announced earlier.

Michael K. Wirth: We farmed into another block, Block 82, which is further north in the Walvis Basin that was just announced earlier this week. And, as you know, there have been a number of discoveries made by companies in the Orange Basin. Our block is on trend with those discoveries. You know, we're encouraged by the success we see from others. And, you know, this is certainly an area where the industry's had a good batting average, a high degree of success, and we're pleased that we've got two blocks now offshore in Navivia. And, of course, we'll talk to you more as we get into the exploration program.

Speaker Change: This week and.

Speaker Change: As you know there've been a number of discoveries made by companies in the Orange base in our block is on trend.

Speaker Change: With those discoveries we're encouraged by the success, we see from others and this.

Speaker Change: This is certainly an area where the industries.

Speaker Change: Hi, good batting average high degree of success and.

Speaker Change: And we're pleased that we've got we've got two blocks now offshore Namibia and of course, we will talk to you more as we get into the into the exploration program there.

Speaker Change: Thanks, Mike.

Paul Cheng: Thank you. We'll go next to Paul. We'll go next to Paul Cheng with Scotiabank.

Michael K. Wirth: Thank you we'll go next to Paul.

Michael K. Wirth: We'll go next to Paul Cheng with Scotiabank.

Paul Cheng: Thank you. Good morning.

Paul Cheng: Thank you good morning.

Michael K. Wirth: Mike, you guys did a small deal, look like, on the retail marketing asset, I think over 200 stations in the Gulf Coast and West Coast. I actually don't remember. I think since you became the head of downstream, say, call it 20 years ago, you guys have been selling assets there. So, has there been a change in your view in terms of the overall strategy related to that part of the business? And whether or not this deal is you going to be owning the asset, or that this is a wholesale marketing, dropper network kind of deal that you are acquiring? Thank you. Yeah, thank you, Paul.

Paul Cheng: You guys did a small deal would look like.

Paul Cheng: The retail marketing off that that thing over to him just station.

In the Gulf Coast, and West Coast, I actually don't remember I think since you become the head of the downstream say call. It 20 years ago, you guys had been selling off that day. So has that changed your view.

Paul Cheng: In terms of the overall strategy, we need to that part of the business and where did that this.

Paul Cheng: Still you are going to be opening to us or that this is wholesale marketing.

Drop in that.

Paul Cheng: Payoff teams that you're acquiring thank you.

Speaker Change: Yes, Thank you Paul.

Michael K. Wirth: Yeah, thank you, Paul. As you know, I come out of that part of the business. I love talking about retail. Look, we've got three really strong brands around the world, Caltex internationally, in Asia primarily, the Middle East, and Africa a little bit, Chevron and Texco here, primarily in the Americas. And you're right, we only own about 5% of our stations in the U.S., even less than 5% of our branded stations. So most of our business is done through large retailers and distributors.

Speaker Change: I come out of that part of the business I love talking about about retail.

Paul Cheng: Look we've got three really strong brands around the world.

Paul Cheng: Caltech internationally.

Paul Cheng: In Asia, primarily in Middle East and Africa, a little bit.

Paul Cheng: Chevron and Texaco here, primarily in the Americas.

Paul Cheng: And.

Paul Cheng: And you're right, we only own about 5% in the U S. Even less than 5% of our branded stations. So most of our business is done through large.

Paul Cheng: Retailers and distributors.

Paul Cheng: Enter into agreements supply agreements and branding agreements with these marketers and there are times.

Michael K. Wirth: We enter into supply agreements and branding agreements with these marketers. And there are times, you know, different mechanisms we use to support their investment. We've done a couple of deals here in the last quarter that are substantial that add, you know, a few hundred stations to our network. And as part of that, we advance some cash to support their brand conversion efforts, their investment in the network, and to solidify our relationship with really important customers of ours that ultimately sell on to consumers. And so you saw that they consumed some cash. It's technically, from an accounting standpoint, doesn't get classified as capital, but we want to disclose it because it is cash.

Paul Cheng: Different mechanisms, we use to support their investments.

Paul Cheng: We've done a couple of deals here in the last quarter that are substantial that add a.

Paul Cheng: A few hundred stations to our network.

Paul Cheng: And as part of that we advanced some cash.

Paul Cheng: To support their brand conversion efforts their investments in the network.

Paul Cheng: And to solidify our relationship with really important customers of ours that ultimately sell on to consumers and so you saw that consume some cash it's technically from an accounting standpoint doesn't get classified as capital, but we wanted to disclose it because it is cash and and it helps us grow our branded.

Paul Cheng: Sales and so it's an important part of our business. We're doing these kinds of deals all the time, Paul there tend to be oftentimes smaller magnitude. So they don't necessarily get to a size where we would.

Paul Cheng: We would mention it the way that we did today, but we won't own. These stations, they're owned by really strong independent retailers.

Michael K. Wirth: And it helps us grow our branded sales. And so it's an important part of our business. We do these kinds of deals all the time, Paul. But they tend to be of a smaller magnitude, so they don't necessarily get to a size where we would, you know, we would mention it the way that we did today.

Speaker Change: Thanks for the question.

Speaker Change: Thank you we will go next to Betty Jang with Barclays.

Betty Jang: Good morning.

Mike just on what we're seeing that the U S operations are pretty strong this quarter, especially with.

Betty Jang: Permian holding in better than expected relative to your expectations could you just talk about what drove the better performance in the Permian and how you think the rest of the year unfolds and and then just anything else within the U S.

Michael K. Wirth: But we won't own these stations. They're owned by really strong, independent retailers. Thanks for the question. Thank you. We'll go next to Betty Jiang with Barclays. Good morning, Mike.

Wei Jiang: Thank you. We'll go next to Betty Jiang with Barclays.

Betty Jang: I want to highlight.

Michael K. Wirth: Sure. So yes first quarter production of the period was good 859000 barrels a day down about 1% from the fourth quarter of last year stronger than what we had anticipated.

Michael K. Wirth: Sure. So, yeah, first quarter production of the Permian was good, 859,000 barrels a day, down about 1% from the fourth quarter of last year, but stronger than we had anticipated. Really good, strong performance in our company-operated business, building off the momentum from the fourth quarter of last year. We've seen reliability improvements that translate into a slightly less decline in our base production. We saw a significantly shorter frac to pop cycle time, so between when we completed the frac and when we put it on production.

Michael K. Wirth: Really good strong performance in our company operated business building off the momentum from the fourth quarter over last year, we've seen reliability improvements that translate into a slightly less decline on our base production we.

Michael K. Wirth: We saw a significantly shorter frac to pop cycle times, so between when completed Frac and when we put it on production.

Michael K. Wirth: That resulted in a few more wells being popped in the first quarter, which you'll see in the production well performance itself was generally aligned with our expert expectations and so we've been talking a lot about type curves. The last few quarters, we're seeing strong performance, it's aligned with or even a little bit stronger than than what we expected.

Michael K. Wirth: So that resulted in a few more wells being popped in the first quarter, which you see in the production. Well, performance itself was generally aligned with our expectations, and so we've been talking a lot about type curves the last few quarters. We're seeing strong performance that's aligned with, or even a little bit stronger than what we expected. And then we also saw some good contributions from our royalty acreage, which is, you know, the highest return barrel we have because we really have no investment there, and it's an attractive acreage.

Michael K. Wirth: And then we also saw some good contributions from our royalty acreage which is.

Michael K. Wirth: The highest return barrels we have because we really have no investment there and it's attractive acreage others are developing it and.

Michael K. Wirth: And we saw increased activity.

Michael K. Wirth: And increased.

Michael K. Wirth: Royalty production and our JV.

Michael K. Wirth: Right on plan with what we expected and in a lot of visibility into the non operated joint venture.

Michael K. Wirth: Portfolio for this year more even than last year at this time and confidence that that will deliver so all of that translated into a very strong first quarter.

Michael K. Wirth: <unk> mentioned that.

Michael K. Wirth: We now expect our first half to be better than we'd previously guided we've said, 2% to 4% down versus fourth quarter of last year. We now think it will be less than 2% down and then of course the back half of the year. We had another frac spread we've got more wells online and expect to exit the year around 900000 barrels a day so really.

Michael K. Wirth: Others are developing it, and we saw increased activity that resulted in increased royalty production. NOJV, a right-on plan, you know, with what we expected, and a lot of visibility into the non-operated joint venture portfolio for this year, more even than last year at this time, and confidence that that will deliver. So all of that translated into a very strong first quarter.

Michael K. Wirth: Strong performance there.

Michael K. Wirth: Consistent with.

Michael K. Wirth: The momentum that <unk> seen in prior quarters.

Michael K. Wirth: I guess the other thing I would mentioned relative to the U S. More broadly as the anchor project in the deepwater Gulf of Mexico is.

Michael K. Wirth: Emer mentioned that we now expect our first half to be better than we'd previously guided. We'd said 2 to 4 percent down versus the fourth quarter last year. We now think we'll be less than 2 percent down. And then, of course, in the back half of the year, we had another frac spread.

Michael K. Wirth: We've guided towards mid year.

Michael K. Wirth: Startup of that it's right on track the floating production unit is is being commissioned.

Michael K. Wirth: <unk> as we speak we've got both buyback gas and buyback oil.

In the facilities so that means the pipelines. The process units are now charged with with live hydrocarbons, we're commissioning some of the subsea infrastructure, including flow lines.

Michael K. Wirth: We've got more wells on line and expect to exit the year around 900,000 barrels a day. So really strong performance there, and [inaudible] We've guided towards a mid-year start-up of that. It's right on track.

Michael K. Wirth: The completion of the first well is is in progress second wells drilled and will be completed shortly third well is being drilled right. Now. So we'll talk more about this but everything is right on track for startup of anchor mid year, and then of course, we've got other.

Michael K. Wirth: The floating production unit is being commissioned. As we speak, we've got both buy-back gas and buy-back oil in the facilities, so that means the pipelines, and the process units are now charged with live hydrocarbons. We're commissioning some of the subsea infrastructure, including flow lines. The completion of the first well is in progress. The second well is drilled and will be completed shortly. The third well is being drilled right now. So we'll talk more about this, but everything is right on track for the start-up of anchor mid-year.

Michael K. Wirth: Gulf of Mexico projects, as well that are kind of stacked up right behind anchor over <unk>.

Michael K. Wirth: Subsequent quarters, so the outlook in the U S is especially strong.

Speaker Change: Thank you Matt.

Speaker Change: Thank you we'll go next to Josh Silverstein with UBS.

Josh Silverstein: Thanks, Good morning, guys.

Josh Silverstein: Around $1 billion of debt this quarter to manage some of the working capital and distribution timing difficult.

Josh Silverstein: The cash balance growing sequentially you repay commercial paper in <unk>, just wanted to get a sense of where the cash outlook may go sequentially.

Michael K. Wirth: And then, of course, we've got other Gulf of Mexico projects as well that are kind of stacked up right behind anchor over subsequent quarters. So the outlook in the U.S. is especially strong. Thank you. We'll go next to Josh Silverstein with UB. Good morning, guys.

Speaker Change: Yes, when you take that.

Speaker Change: Yeah Josh.

Josh Silverstein: Yes, so we.

Josh Silverstein: We had some commercial paper issued in the first quarter and it was it was just to manage short term liquidity and timing.

Josh Silverstein: Timing of affiliate dividends can be a bit lumpy and repatriation of cash and can be lumpy. So and this is normal normal business that normal business for us in the first quarter I think in terms of what to expect in terms of cash on the balance sheet. I mean, we we target to hold about $5 billion in cash and in that well.

Josh Silverstein: Thank you. We'll go next to Josh Silverstein with UBS.

Josh Silverstein: Yeah, Josh...

Eimear P. Bonner: Yeah, Josh, yes, so we had some commercial paper issued in the first quarter, and it was just to manage short-term liquidity. Timing of affiliate dividends can be a bit lumpy, and repatriation of cash can be a bit lumpy, so this was normal business for us in the first quarter. I think in terms of what to expect in terms of cash on the balance sheet, I mean, we target to hold about $5 billion in cash, and that will bounce around as well, but $5 billion is a good number.

Josh Silverstein: <unk> as well.

Josh Silverstein: 5 billion is it.

Josh Silverstein: It's a good number and we have accessed a lot to learn.

Josh Silverstein: <unk> and commercial paper bond investors credit facilities, so and.

Josh Silverstein: While we've had higher cash in the balance sheet in the past holding excess.

Josh Silverstein: Cash.

Josh Silverstein: And lots of access to liquidity can be it can be a drag on returns. So we're quite comfortable with the 5 billion cash and Thats a great number for you too.

Eimear P. Bonner: We have access to lots of liquidity, commercial paper, bond investors, credit facilities, so while we've had higher cash in the balance sheet in the past, you know, holding excess [inaudible] Thanks, Josh. We'll go next to Biraj Borkhataria with RBC. Hi, thanks for taking my question. I want to ask a follow-up question on the Permian, so you've put out the updated...

Josh Silverstein: They focus on there.

Speaker Change: Thanks, Josh.

We'll go next to Brian <unk> with RBC.

Hi, Thanks for taking my question I wanted to ask a follow up on the Permian.

Put out the updated.

Brian: But the well productivity side. This is very helpful. But a few quarters ago, Mike you talked about some of the broader constraints in the Permian with at tier two water handling and so on it doesn't look like it's impacted your volumes in the near term which have.

Biraj Borkhataria: We'll go next to Biraj Borkhataria with RBC.

Michael K. Wirth: Yeah, thanks, Biraj. You know, nothing's really changed. I mean, this is a very large base business now with thousands of wells over a very large footprint, and it's important that we focus not only on productivity, efficiency, and reliability and drilling and completions but also on all aspects of operations. And that's, you know, midstream takeaway, gas processing, water handling. And, you know, we've got more development underway. The first one this year in the New Mexico portion of Delaware, which is going to require a build out of some of this capability, which will be, you know, part of our capital program.

Brian: Performed very well so could you just refresh us on if anything has changed in your views on that.

Thank you.

Michael K. Wirth: Yes, Thanks Raj.

Michael K. Wirth: Nothing has really changed I mean, this is a very large.

Speaker Change: The base business now with thousands of wells over a very large footprints and.

Speaker Change: And it's important that we focus not only on productivity efficiency and reliability and drilling and completions, but also in all aspects of operations and Thats.

Speaker Change: Midstream takeaway, it's gas processing its water handling and we've got more development underway this year and the new Mexico portion of the Delaware, which is going to require a build out of some of this case.

Speaker Change: Capability, which will be part of our capital program addresses, but you really have to stay on top of base business reliability on all of these things. The seismic is another one we've seen some issues on it so.

Michael K. Wirth: But you really have to stay on top of basic business reliability on all these things. Seismic is another one we've seen some issues with. And so they're all part of managing the business for safety and reliability each and every day.

Speaker Change: They're all part of managing the business for safety and reliability, each and every day.

Michael K. Wirth: You know, we had a quarter, a couple of quarters ago where a number of those things changed. And in the current quarter, we saw really good performance. Last thing I might mention, which might be implied in your question, you know, you hear some talk about the takeaway capacity of the basin, and are people constrained? Is that impacting gas prices more than other commodities? We're covered on takeaway capacity out of the basin for oil and GL and gas, you know, well into the future. And so we're not exposed to any in-basin discounted pricing as a result of that.

Speaker Change: We had a quarter a couple of quarters back where a number of those things were a challenge.

Speaker Change: And the <unk>.

Speaker Change: Current quarter.

Speaker Change: We saw really good performance.

Speaker Change: One thing I might mention which might be implied in your question.

Speaker Change: You see some talk about takeaway capacity out of the basin and our people constraint is that impacting particularly gas prices.

Speaker Change: More than the other commodities.

We're covered on takeaway capacity out of the basin and oil NGL and gas.

Speaker Change: Out into the future.

Speaker Change: And so we're not exposed to any in.

Speaker Change: In basin discounted pricing as a result of that.

Speaker Change: Thank you Brian.

Nitin Kumar: Thank you. We'll go next to Nitin Kumar with Mizzou. Hi, good morning, and thanks for taking my questions. Mike, I just wanted to maybe get an update on

Brian: Thank you we'll go next to <unk> Kumar with Mizuho.

Nitin Kumar: Hi, good morning, and thanks for taking my questions. Mike I, just wanted to maybe get an update on Venezuela. There were some reports that.

Kumar: Administration is reinstating.

Speaker Change: Some of the.

Nitin Kumar: Thank you. We'll go next to Nitin Kumar with Mizzou Hill.

Nitin Kumar: Export bans on the country.

Specifically said that Chevron was not included but just your thoughts on sort of the future of oil production and exports from the country and how it impacts chevron.

Michael K. Wirth: Yeah, thanks, Nitin. So, you might recall that the Department of Treasury and OFAC, the division within Treasury, have issued a couple of different what are called general licenses for operations for companies in Venezuela. There's one called General License 41, which primarily pertains to our position in the country. There are some specific licenses as well that kind of go along with that. And then there was a second one that was issued, you know, subsequently called General License 44, which applied more broadly.

Michael K. Wirth: Yeah, Thanks, Nick so.

Michael K. Wirth: You might recall that.

Michael K. Wirth: The department of Treasury, and an OPEC a division within Treasury has issued.

Michael K. Wirth: A couple of different vertical in general licenses for operations for companies in Venezuela, others, one called general lessons 41, which primarily.

Michael K. Wirth: Pertains to our.

Michael K. Wirth: <unk> position in the country there are some specific licenses as well.

Michael K. Wirth: Kind of along with that and then there has been a second one that was.

Michael K. Wirth: Issued.

Michael K. Wirth: Subsequently called General license 44, which applied more broadly that's the one where the the administrations announced some changes and.

Michael K. Wirth: That's the one where the administration has announced some changes, and those don't really impact us. There have been no changes to GL 41, and so we're not really affected by the news that you've read about recently. I'll just remind you that we're not putting new capital into Venezuela right now. All the spending is really self-funded from cash from operations.

Michael K. Wirth: And those don't really impact us there have been no changes to gel 41, and so so we're not really affected by the.

Michael K. Wirth: But the news you've read about recently I'll, just remind you we're not putting new capital into Venezuela right now all the spending is really self funded from our cash from operations, we've been lifting oil and bring it to the U S, which has been helpful for the U S refining system, not just ours, but others as well.

Michael K. Wirth: We've been lifting oil and bringing it to the U.S., which has been helpful for the U.S. refining system, not just ours, but others as well. And since that license was issued now, a little bit more than a year ago, we've seen production at the joint ventures that we're participating in increase from about 120,000 barrels a day at the time that that license was issued to about 180,000 barrel So that's an update.

Michael K. Wirth: And since that.

Michael K. Wirth: License was issued now a little bit more of a year ago.

Michael K. Wirth: We've seen production of the joint ventures that we're participating in increase from about 120000 barrels a day at the time that that license was issued to about 180000 barrels a day.

Michael K. Wirth: Now.

Speaker Change: So that's an update there are some maybe it might be worth a reminder of just how the financial.

Michael K. Wirth: There are some – maybe it might be worth reminding you just how the financial side of that works, because it's a little bit different from some of the other parts of our production. So, Emer, do you want to touch on that?

Speaker Change: Side of that works, because a little bit different than some of the other parts of our production. So here. We're just wanted to touch on that and just as a reminder, and for Venezuela, We did cost accounting and not equity accounting stone chevron's not recording the production here or the reserves that we have.

Eimear P. Bonner: Yeah, Nitin, just as a reminder, for Venezuela, we do cost accounting, not equity accounting, so Chevron's not recording the production here or the reserves. We record earnings when we receive cash, and that shows up under other income and the income statement. Just to put this into context, in 2023, the cash was modest, probably less than 2% cash.

Speaker Change: Record earnings when we receive cash and that shows up under other income and income statement just to put this into context in 2023.

Speaker Change: The cash with modest probably less than 2% cash flow from operations.

Jason Daniel Gabelman: Thank you. We'll go next to Jason Gabelman with T.D. Cowan.

Speaker Change: Thanks.

Speaker Change: Thank you we will go next to Jason <unk> with TD Cowen.

Jason: Yeah, Hey, good morning, Thanks for taking my questions.

Jason Daniel Gabelman: Yeah, hey, good morning. Thanks for taking my questions. I wanted to ask about the divestment program. I know when the Hess deal was announced, you discussed 10 to 15 billion dollars, but given that's in a bit of a holding pattern here, I'm just wondering what you expect the cadence or the target for divestments to be. I think, historically, you've done about $2 billion a year. So that's not too far from what the guidance was for the Hess deal.

Jason: Wanted to ask about the divestment program I know when.

Jason: The Hess deal was announced you discussed $10 billion to $15 billion, but given that it's been a bit of a holding pattern here.

Jason: I'm just wondering what do you expect the.

Jason: Cadence or are their target for divestments to be I think historically you've done.

Jason: About $2 billion a year, so that's not too far from what the guidance was with the Hess deal.

Jason Daniel Gabelman: So just trying to triangulate those two numbers and get a sense of what the divestment program could look like while that deal is in a bit of a holding pattern. You could just remind us of the assets that have been discussed in the market. That would be great.

Jason: So just trying to triangulate those two numbers and getting a sense of what the divestment.

Jason: Program could look like.

Jason: That that deal is it a bit of a holding pattern. If you could just remind us the assets that have been discussed in.

Speaker Change: In the market that would be great. Thanks, Yeah, Yeah, sure happy to do that Jason So.

Speaker Change: The first thing is you're right we're always.

Speaker Change: High grading our portfolio and it's not because we needed. The cash you know you can recover the strength of the balance sheet, but it is really too.

Michael K. Wirth: Yeah, yeah, sure. Happy to do that, Jason.

Michael K. Wirth: So, you know, the first thing is, you're right, we're always, you know, high-grading our portfolio. And it's not because we need the cash, you know, you've recovered the strength of the balance sheet, but it's really to seek value to optimize our portfolio. We find times when there are things that don't compete for capital in our portfolio, and they fit better with somebody else. They tend to be early in life assets.

Speaker Change: Value to optimize our portfolio with five times are there things that don't compete for capital in our portfolio and they fit better with somebody else. So they tend to be early in life assets. We've had we were at Roes bank and divested that a few years ago or things that are.

Speaker Change: Much later in life.

Speaker Change: It might fit better with somebody who works those kinds of assets.

Speaker Change: Over the last decade, or so 2012 through 2023.

Speaker Change: We divested about $35 billion worth of our long term history has been.

Speaker Change: $2 billion per year.

Speaker Change: Maybe 1% of our capital employed give or take and our guidance for this year is one of the two so it's pretty consistent with with history.

Michael K. Wirth: You know, we were at Rosebank and divested that a few years ago, or things that are much later in life and might fit better with somebody who works those kinds of assets. We've announced that we intend to exit Congo, and we've got a deal there. We expect that to close before the end of the year. We have talked about our position in unconventionals in Canada, in K-Bob DuVernay, which is a nice asset that has some growth opportunities, but it may be a better fit for others. So we're looking at alternatives there. And then also the Haynesville. We paused our development activity in Haynesville last year, and that's another one that we think may fit better with others.

We did say that part of closer to the Hess transaction, we're going to add some assets that are going to be highly attractive for capital investment and that means as you look through the rest of the portfolio. If we stay capital disciplined there are probably some things that we might otherwise have invested in it now.

Speaker Change: We would choose not to and so that's where the 10% to 15 guidance came from that would still stand upon closure of the things we're doing now.

Speaker Change: So we would have done in the normal course, and so they're not really related to high grading post post the Hess edition.

Speaker Change: The things that are in the in the public domain.

Speaker Change: We've talked about <unk>, which we which we exited as of April one.

Speaker Change: We've announced that we intend to exit Congo, and we've got a deal there.

Speaker Change: We expect that to close before the end of the year.

Speaker Change:

Speaker Change: We have talked about our position in unconventional in Canada, K Bob Duvernay.

Speaker Change: Which is a which is a nice.

Speaker Change: Nice assets, which has some growth opportunities, but it may be a better fit for others. So.

Speaker Change: We're looking at alternatives there and then also the Haynesville, we paused our development activity in the Haynesville last year end.

Michael K. Wirth: So I think those are the ones that are out in public right now, Jason. Thanks, Jason. Thank you. We'll go next to Bob Brackett with Bernstein Research. Good morning, Bob. Good morning.

Speaker Change: That's another one that we think may fit better with others. So I think those are the ones that are out in public right now Jason.

Speaker Change: Thanks, Jason.

Speaker Change: Thank you we'll go next to Bob Brackett with Bernstein Research.

Robert Alan Brackett: Good morning, Bob Good morning.

Robert Alan Brackett: Given the launch of future Energy fund three can you give us a thought of what you saw success cases coming out of one and two that caused you to move to three and maybe compare and contrast, how you.

Robert Alan Brackett: Thank you. We'll go next to Bob Brackett with Bernstein Research.

Robert Alan Brackett: Do it yourself in house solar to hydrogen for example versus where you might see third parties to try new technologies.

Michael K. Wirth: Yeah, so appreciate that. This is one that we probably haven't talked about with investors as much as some of the other parts of our business. Funds one and two were smaller, $100 million, $300 million. And they're not actually fully subscribed yet.

Speaker Change: Yeah. So I appreciate that this is one that we probably haven't talked about with with investors as much as some of the other parts of our business.

Speaker Change: Funds, one and two were smaller $100 million $300 million.

Speaker Change: And they're not actually fully subscribed, yet, but theyre getting there, which is why we announced fund number three.

Michael K. Wirth: But they're getting there, which is why we announced fund number three. You know, we've been in the venture investing business for a quarter of a century. So going back to the late 1990s, when we first set up our venture investing organization, and in the future energy funds, which are those that are really focused on energy transition themes, through funds one and two, we've invested more than 30 companies already. We're collaborating with, you know, 250 or so other co-investors in these companies; we can serve as a pilot bed for their technology. So we can help them bring things from the lab and, and, and kind of bench scale out into the real world.

Speaker Change: We've been in the venture investing business for a quarter of a century, so going back to the late Ninety's. When we first set up our venture <unk>.

Speaker Change: Investing organization.

Speaker Change: And in the future energy funds, which are those that are really focused on energy transition themes through funds wanted to we've invested more than 30 companies already.

Speaker Change: We're collaborating with.

Speaker Change: 250, or so other co investors in these companies we can serve as a pilot bid for their technology. So we can help them bring things from the lab and in kind of bench scale out into the real world.

Michael K. Wirth: And I visited one of our carbon capture pilots in the San Joaquin Valley last year with a company that's got some really interesting technology to help us improve the efficiency and reduce the cost for carbon capture. And so, you know, we're looking at things like industrial decarbonization, hydrogen, emerging mobility, energy decentralization, and a circular carbon economy. And what we're really looking to do is support innovation in things that we probably aren't doing within the company within our own R&D or scale up. As you mentioned, the project in the Permian Basin or in the San Joaquin Valley uses solar to green hydrogen is using established technologies that are well proven.

Speaker Change: Last year, one of our carbon capture pilots in the San Joaquin Valley with a company. That's got some really interesting technology to help us improve the efficiency reduce the cost for carbon capture.

And so.

Speaker Change: We're looking at things like industrial de Carbonization.

Speaker Change: The hydrogen emerging mobility energy decentralization of circular carbon economy.

Speaker Change: And what we're really looking to do is support innovation.

Speaker Change: In things that we probably arent doing within the company within our own R&D or or scale up.

Speaker Change: As you mentioned the plants in the Permian basin or in the in the San Joaquin Valley. The solar to Green hydrogen is using established technologies that are well proven well we're doing in our venture investing is trying to develop these new technologies, new materials, new novel ways to integrate AI and other.

Michael K. Wirth: What we're doing in our venture investing is trying to develop these new technologies, new materials, new novel ways to integrate AI and other kinds of technology systems to help solve some of these problems. And hopefully, we will find things that will help our business and help the world. Last thing I'll say is that over the 25 years, we've more than earned our money back in a return on our investment. Not every one of these companies is successful, but we've seen a lot of technologies move into our business.

Speaker Change: As a technology systems to help solve some of these problems and hopefully we will find things that will help our business and helped the world last thing I'll say is over the 25 years, we've more than earned our money back and a return on our investment and not every one of these companies is successful, but we've seen a lot of technologies move into our business. We've seen a lot of the companies become.

Michael K. Wirth: We've seen a lot of companies become successful, and there's a lot of innovation going on out there. This allows us to leverage ourselves into smaller startup innovation that we might not otherwise see. So it's been very, very positive for us, and we're excited to announce the new Thank you. We'll go next to Roger Read with Wells Fargo. Yeah, thanks. Good morning. We talked a little bit about Eastern Med. I know, you know, at one point.

Speaker Change: Successful and Theres a lot of innovation going on out there. This allows us to leverage ourselves into <unk>.

Speaker Change: Smaller startup of innovation that we might not otherwise see so it's been very very positive for us and we're excited to announce the new fund.

Speaker Change: Thank you we'll go next to Roger read with Wells Fargo.

Yeah. Thanks, good morning.

Roger David Read: Can you talk a little bit about eastern Med I know.

Roger David Read: At one point operations and shutdown sounds like everything is back up and running but also you would kind of tie that in to.

Roger David Read: Thank you. We'll go next to Roger Read with Wells Fargo.

Roger David Read: Egypt, a little bit where theres been some exploration talking.

The government is trying to do some things to improve.

Roger David Read: The overall investment.

Michael K. Wirth: Yeah, you bet. So first of all, we are back in full operations in the Eastern Mediterranean. We've, you know, tomorrow is down for about a month at the very beginning of hostilities, but we're excited about the opportunities there. Just to remind you, we've got the two existing platforms, Tamar and Leviathan, in service, and we've really structured our development plans there to focus on capital efficiency, higher returns. To the earlier answer, things have got to compete for capital in our portfolio.

I guess environment there.

Speaker Change: Yeah, you bet so.

Speaker Change: First of all.

Speaker Change: We are back in full operations in the eastern Med.

Speaker Change: <unk>.

Speaker Change: <unk>.

Speaker Change: Tomorrow is down for about a month at the very beginning of hostilities.

Speaker Change: But we're excited about the opportunities there just to remind you we've got the two existing platforms tomorrow Leviathan in service and we've really structured our development plans there to focus on capital efficiency higher returns.

Speaker Change: To the earlier answer things, we've got to compete for.

Speaker Change: For capital in our portfolio.

Michael K. Wirth: Since we closed on the noble acquisition, we've increased production at Tamar and Leviathan by more than 10 percent, just through debottlenecking and reliability. We've sanctioned projects at both of those that are currently in progress that will increase production by another 40 percent over the next couple of years. And we're looking at larger expansion, particularly for Leviathan, where we've got a number of concepts that are being evaluated. Obviously, in the current environment, you know, we're moving carefully with the development of those. You mentioned Egypt.

Speaker Change: Since we've closed on the <unk>.

Speaker Change: Acquisition.

Speaker Change: We've increased production tomorrow, leviathan by more than 10%.

Speaker Change: Through Debottlenecking.

Speaker Change: Reliability.

Speaker Change: Sanctioned.

Speaker Change: Projects at both of those.

Speaker Change: That are currently in progress that will increase production by another 40% over the next couple of years and we're looking at a larger expansion, particularly for Leviathan, where we've got a number of concepts that are being evaluated obviously in the current environment.

Speaker Change: Moving carefully with development of those.

Speaker Change: You mentioned Egypt.

Michael K. Wirth: We've got a discovery at Nargis, and we expect another appraisal well there late this year or early next year to better characterize the field and refine our development plan. We've got a number of other blocks that have not been drilled yet that we shot seismic on, and we plan to spud a well in block four there before the end of this year. And so it's an area that I think has real prospectivity as you look at the growth in both the near term with the projects I mentioned and then the longer term expansion of existing and exploration prospectivity. It's a part of our portfolio that I expect us to see growth from over the coming decade. Thank you. We'll go next to Lloyd Byrne with Jeff. Hey, good morning, Mike. Thank you for your time.

<unk> got a discovery at <unk>, we expect another appraisal well.

Speaker Change: They're in late this year or early next year to better characterize the field and refine our development plan.

Speaker Change: Got a number of other blocks that have not been drilled yet that we shot seismic on.

Speaker Change: We plan to spud a well in block four there before the end of this year.

Speaker Change: And so it's an area that I think has got a real prospectively as you look at the growth.

Speaker Change: In both the near term with the projects I mentioned and then the longer term expansion of existing and exploration prospectively.

Speaker Change: It's a part of our portfolio that I expect us to see growth from over the coming decade.

Speaker Change: Thank you we will go next to Lloyd burn with Jefferies.

Lloyd Burn: Hey, good morning, Mike.

Lloyd Burn: Thank you for your time.

Lloyd Burn: I know we've covered a lot of ground. This morning, we talked about the Permian productivity, which looks really good but could you just touch on the DJ and that production looks stronger than we expected and then also any political risk you might want to comment on out there.

Francis Lloyd Byrne: Thank you. We'll go next to Lloyd Byrne with Jeffreys.

Michael K. Wirth: So, yeah, first quarter production of the DJ was about 400,000 barrels a day, kind of higher than our long-term guidance is. We had timing in a lot of fourth quarter, and 23 wells went into production there. You typically expect some weather-related downtime in Colorado in the first quarter. We saw some of that, but less than what we had planned for, so production was good.

Lloyd Burn: Sure.

Speaker Change: Yes first quarter production in the DJ was a it was about 400000 barrels a day and kind of higher than what our long term guidance is.

Speaker Change: We had timing.

Speaker Change: Timing and a lot of fourth quarter 23 wells put on production there.

Speaker Change: You typically expect some weather related downtime in Colorado and in the first quarter, we saw some of that but less than what we had planned for so production was good.

Michael K. Wirth: Second quarter, there may be some minimal impacts that we expect from a third-party gas plant that's had an outage, but continued strong performance there thus far in the second quarter. These are high cash margin, low break-even barrels that we're really pleased to have in our portfolio. If you go back three years ago, we didn't have anything in DJ.

Speaker Change: Second quarter, there is maybe some minimal impacts that we expect from a third party gas plant.

That's had an outage but continued.

Speaker Change: Strong performance there thus far in the second quarter. These are high cash margin low breakeven barrels that we're really pleased to have in our portfolio go back three years ago. We didn't have anything as D. J, we're not talking 400000 barrels a day of production there we plan to hold our.

Michael K. Wirth: We're now talking 400,000 barrels a day of production there. We plan to hold our plateau there around 400,000 barrels a day, and it'll fluctuate a little bit based on the timing of bringing new pads on and completion of wells, et cetera. But it's a really strong asset for us. Let me talk about the politics and the kind of the operating environment a little bit, and then maybe I'll have Emer just touch on PDC and the benefits of that.

Speaker Change: Plateau, there around 400000 barrels a day and it will fluctuate a little bit based on the timing of bringing.

New pads on and completion of wells et cetera, but it's a really strong asset for us.

Let me talk about the politics.

Speaker Change: Kind of the operating environment, a little bit and then maybe I'll.

Speaker Change: Just touch on PTC.

Speaker Change: The benefits of that.

Michael K. Wirth: But Colorado is a... The state where energy is an important part of the economy, and I grew up there; the environment is very important to the people of the state as well, and I think their goal has been to be a leader in responsible development and to recognize the important economic contribution that our industry makes to the state. I'm confident that that will continue to be the case. We've got good relationships with members of the legislature, with the executive branch, with the governor, and as the largest oil and gas producer in the state, with over 1,000 employees who live and work there, and we're a significant investor there, we engage broadly within the community.

Colorado is a.

Speaker Change: State, where energy is an important part of the economy.

Speaker Change: And I grew up there the environment is very important for the people of the state as well and I think.

Their goal has been to be a leader in responsible development.

Speaker Change: And to recognize the important economic contribution that our industry makes to the state I'm confident that that will continue to be the case.

We've got good relationships with.

Speaker Change: So the legislature with.

Speaker Change: The executive branch with the Governor.

It is the largest oil and gas producer in the state with over 1000 employees, who live and work there and we are a significant investor there.

Speaker Change: We engage broadly within the community and I think there's a recognition that responsible development in Colorado is what everybody wants in.

Michael K. Wirth: And I think there's a recognition that responsible development in Colorado is what everybody wants and what we are committed to, and there can be some noise around ballot proposals, there can be some noise around legislative proposals, but we're confident that the state is interested in working with us to be a responsible player and for this to be an important part of the economy.

Speaker Change: What we are committed to and be.

Speaker Change: Can be some noise around bell.

Speaker Change: Proposals there can be some noise around legislative proposals, but but we're confident that.

Speaker Change: The state is.

Speaker Change: Interested in working with us to.

Speaker Change: Responsible responsible player and for this to be an important part of the economy, maybe PVC. Some of the benefits just so people are reminded of that yet.

Eimear P. Bonner: It's been about nine months since we closed on PDC Energy, and we're really pleased with the progress that we're seeing on the synergies. On the CAPEX side, to date, we've captured $500 million, which is $100 million more than what we had initially guided to. We're also seeing capture on the OPEX side as well, so we're nearing $100 million there. The teams are continuing to integrate. We're bringing the best of both companies together and building a development playbook focused on optimizing returns in the basin. We're realizing strong free cash flow from these assets, so we're ahead of pace for the incremental $1 billion in annual free cash flow that we guided to.

Speaker Change: Nine months since we closed with PDC energy, we're really pleased with the progress that we're seeing on the synergies and on the Capex side, we've captured that $500 million, which is 100 100 million more than what we had initially guided to.

Speaker Change: Also same capture and on the Opex side as well so we're nearing 100 million there.

Speaker Change: The teams are continuing to integrate we're bringing the best of the both companies together and building development or development playbook and focused on optimizing returns in the basin.

Speaker Change: We're realizing strong free cash flow from these assets were ahead of peers for the incremental $1 billion in annual free cash flow.

Speaker Change: That we guided to.

Devin J. McDermott: Thank you. We'll go next to Devin McDermott with Morgan Stanley.

Speaker Change: Thank you Lloyd.

Speaker Change: Thank you we'll go next to Devin Mcdermott with Morgan Stanley.

Devin J. McDermott: Hey, good morning, Thanks for taking my question.

Michael K. Wirth: Hey, good morning. Thanks for taking my question. So, I wanted to bring it back to TCO, and Mike, I think you've talked in the past about how there's some similarity in the design between WPMP and FGP, and as a result of that, as you bring WPMP online, it helps de-risk part of the FGP ramp as well. I was wondering if you could remind us what some of that commonality is, and as you look at the milestones you have identified over the next few months at WPMP, which are the ones that you think about as being key to help de-risk FGP as well?

Devin J. McDermott: So one of them wanted to.

Devin J. McDermott: Bring it back to Tcl and Mark I think you've talked in the past about how there is some some clarity in the design between BB&T and FTP and as a result of that as you bring <unk> online. It helps derisk part of the FTP ramp as well. So maybe you could remind us what some of that commonality is.

Devin J. McDermott: And as you look at the milestones you looked out over the next few months at WP MP, which are the ones that you think about as being key to Derisk FTP as well.

Speaker Change: Yeah. So.

Michael K. Wirth: Yeah, so, you know, it's just just to remind everybody, you know, this is a massive field, some of you have visited it. And FGP, the future growth project is taking things we did Almost 20 years ago now, with the second generation plant and sour gas injection, where we injected about half of the sour gas, and we're now injecting all the sour gas, increasing production, and at the same time, we're reducing back pressure on the field and using compression to push the production into the facilities so that we're not relying on field pressure to do that, and that increases the life and longevity of the production out of the field.

Speaker Change: Just to remind everybody you know this is a massive field. Some of you have visited it and.

Speaker Change: F GP the future growth project is taking things we did.

Speaker Change: Almost 20 years ago now.

Speaker Change: With the second generation plant in SAR guests injection, where we injected about half of the sour gas and we're now injecting all of the sour gas increasing production and at the same time, we are reducing back pressure on the field and using compression to push to push the <unk>.

Speaker Change: Production into the facilities, so that we're not relying on field pressure to do that and that that increases the life and longevity of the production out of the field.

Michael K. Wirth: The other thing this project brings with it is what I've described sometimes as urban renewal, and it takes infrastructure that was built back even before Kazakhstan was independent, and it brings power and utility infrastructure, control infrastructure up to modern-day technology and modern-day standards, so the projects are quite integrated. The startup sequencing in terms of what you do to walk down systems, ensure they're ready for operation, do all the testing and startup is very similar, whether you're in one portion of the project or another, and the productivity of the field resources that we see on WPMP reads across to FGP as well, and so while they are fundamentally different project scopes and objectives, so much of the work is similar across equipment and the commissioning and startup activities that I think the positive progress we're making, the success we're seeing in commissioning and startup at WPMP reads straight across to FGP as well.

Speaker Change: The other thing this project brings with it is what I've described sometimes as urban renewal.

Speaker Change: And it takes infrastructure that was built back even before Kazakhstan was independent.

Speaker Change: And it brings power and in utility infrastructure.

Speaker Change: Infrastructure control infrastructure up to modern day technology and modern day standards. So the projects are quite integrated the startup sequencing in terms of.

Speaker Change: What you do to walk down systems ensure they're ready for operation do all the testing and startup is very similar whether you're in one portion of the project or another and the productivity of the field resources.

See on WP NP reads across to FTP as well and so while they are fundamentally different project scopes and objectives.

Speaker Change: So much of the work is similar across.

Speaker Change: Equipment, and the commissioning and start up activities that I think the positive progress we're making the success, we're seeing in commissioning and startup at FTP read straight.

Speaker Change: W Pnp read straight across to to FTP as well.

Ryan M. Todd: Thank you. We'll go next to Ryan Todd with Piper Sandler.

Speaker Change: Thank you Devin.

Speaker Change: Thank you we'll go next to Ryan Todd with Piper Sandler.

Speaker Change: Thanks.

Ryan M. Todd: Thanks. Maybe.

Speaker Change: Maybe.

Michael K. Wirth: One on the renewable side of your portfolio, I mean, you announced FIDs on a couple of different renewable projects, one in biofuels, and one in solar to hydrogen. Can you provide some color on what underpins confidence in these specific projects, whether it's Commercial, Technical, or Regulatory Support, and do you see further opportunities to develop similar projects in the portfolio going forward, or are there specific things about these ones in particular that make them attractive?

Ryan M. Todd: One on on.

Ryan M. Todd: On the renewable side of your portfolio I mean, you announced.

Ryan M. Todd: You've done a couple of different renewable projects, one in Biofuels and solar to hydrogen can you provide some color on.

Ryan M. Todd: What underpins underpins confidence in these specific projects, whether it's <unk>.

Ryan M. Todd: Commercial or technical or regulatory support and do you see further opportunities to develop similar projects in the portfolio going forward or are there specific things about themes ones in particular that makes them.

Ryan M. Todd: Attractive.

Speaker Change: Yeah. So so the two projects one is and oilseed processing plant in our joint venture with Bunge, It's a projected duster in Louisiana.

Michael K. Wirth: Yeah, so the two projects; one is an oil seed processing plant in our joint venture with Bungie. It's a project in Destrehan, Louisiana, and so FID was announced for a new oil seed processing plant there. This one will feature a very flexible design, and that's important because it gives you feedstock flexibility, which matters in any fuels manufacturing business. So in this case, we can process soybeans and soft seeds, but we will also be able to process winter oil seed crops, things like winter canola, and cover crops, and so it gives us a greater range of potential feedstocks that can then feed into our renewable fuels business, particularly the Geisler Renewable Diesel Project, which will start up later this year, and it's really important that we have exposure across these value chains.

Speaker Change: And so if I D was announced for new oil processing plant there.

Speaker Change: One will feature a very flexible design and that's important because it gives your feedstock flexibility, which matters and any.

Speaker Change: Fuels manufacturing business. So in this case.

Speaker Change: We can process soybeans in soft seeds, but we can also.

Speaker Change: Be able to process a winter oilseed crops things like winter canola cover Kress and.

Speaker Change: So it gives us a greater range of potential feedstocks.

Speaker Change: That can then feed into our renewable fuels business, particularly the guys for renewable diesel project, which will start up later this year.

Speaker Change: And it's really important that we have exposure across these value change the margins can move from the crush margin into the upgrading margin or what you consider the refining margin into the marketing margin.

Michael K. Wirth: The margins can move from the crush margin into the upgrading margin, or what you consider the refining margin, into the marketing margin, and just like in our traditional business, being able to capture a margin across the value chain as it moves is important.

Speaker Change: And just like in our traditional business being able to casual margin across the value chain as it moves is important and having flexibility scale and reliability are important so all of those underpin.

Michael K. Wirth: Having flexibility, scale, and reliability are important, so all of those underpin the investment decision there. The project in California on green hydrogen is smaller in scale, and it really uses existing solar production capacity.

Speaker Change: The investment decision there.

Speaker Change: The project in California on Green hydrogen is smaller in scale.

And it really uses existing.

Speaker Change: Solar production capacity, we've got a five megawatt.

Michael K. Wirth: We've got a five-megawatt production facility on our Lost Hills oil field in Kern County, and we're going to produce about a metric ton per day of hydrogen for retail fuel stations. So we're using existing infrastructure. We're integrating into the value chain. We've got another venture that is building hydrogen refueling facilities in California, and so we're leveraging existing assets, existing value chains, and capabilities to invest here, as I say, at a smaller scale. And I don't want to overplay it, but it's very consistent with our strategy, and these things have got to start small and then scale.

Speaker Change: Production facility, our lost hills oilfield in Kern County, and we're going to produce about a metric ton per day of hydrogen for retail fuel stations. So we are using existing infrastructure.

Speaker Change: We're integrating into the value chain. We've got another venture that is building hydrogen refueling facilities in California, and so we're leveraging existing assets and existing existing value chains and capabilities to invest here.

Speaker Change: As I say smaller scale.

Speaker Change: And I don't want to overplay, it, but it's very consistent with our strategy and these things have got to start small and then scale and.

Michael K. Wirth: So we're pleased with both of these. There are markets, maybe to your point about economics, that are in some ways heavily influenced by government policy, be it the Renewable Fuel Standard and the Low Carbon Fuel Standard, which affect renewable fuels, or some of the things in the Inflation Reduction Act that affect hydrogen.

Speaker Change: So we're pleased with both of these markets to maybe to your point about economics.

Speaker Change: There are in some ways heavily influenced by government policy.

Speaker Change: The renewable fuel standard.

Speaker Change: And the low carbon fuel standard, which affect renewable fuels or some of the things in the investment or the inflation reduction act that.

Speaker Change: Effect of hydrogen and so it makes them a little bit different than our traditional business, which really works off market fundamentals.

Michael K. Wirth: And so it makes them a little bit different than our traditional business, which really works off market fundamentals, but we look at a lot of cases there, and we invest in projects where we believe there's confidence that, over time, we can generate a good return. Thanks, Ryan. We'll go next to John Royall with J.P. Morgan. Hi, good morning. Thanks for taking my question. So my question is on West Coast refining. We now have one less asset producing gasoline in the West.

Speaker Change: But we look at a lot of cases, there and we.

Speaker Change: Investment projects, where we believe there's a confidence that over time, we can generate a good return.

Speaker Change: Thanks Ryan.

Speaker Change: We'll go next to John Royall with Jpmorgan.

John Macalister Royall: Hi, good morning, Thanks for taking my question so.

John Macalister Royall: So my question is on West Coast refining, we now have one less asset producing gasoline on the west coast.

John Macalister Royall: CMS should be increasing the availability of heavy crudes once its rent.

John Macalister Royall: But it is a tough regulatory climate in.

John Macalister Royall: You are well positioned as one of the players that still has multiple assets in California. How are you thinking about that region today and should we should receive structurally higher gasoline margins in California.

John Macalister Royall: We'll go next to John Royall with J.P. Morgan.

John Macalister Royall: We've had some capacity come out.

Speaker Change: Well look you know we've been in California for.

Michael K. Wirth: Well, look, you know, we've been in California for, you know, our entire existence, 145 years. We've got an integrated value chain that allows us to serve two competitive refineries and advantage logistics that take us out into a market where we've got a very strong brand and where the demand for all forms of energy continues to grow, be it power, be it transportation fuels. You know, it's an economy that is large, and demand continues to go up.

Speaker Change: Our entire existence 145 years, we've got an integrated value chain that allows us to serve two competitive refineries in an advantaged logistics that take us out into a market, where we've got a very strong brand and where the demand for all forms of energy continues to grow, albeit power would be of transportation fuels.

Speaker Change: It's an economy that is large and demand continues to go up.

Michael K. Wirth: That said, the policy environment has been one that is geared towards reducing investment in traditional energy and encouraging investment in these lower carbon energies. And you've seen assets go out of the system, you know, fossil fuel-fired power plants. There are a lot of questions about the one remaining nuclear power plant in the state.

Speaker Change: That said the policy environment has been one that is geared towards reducing investment in traditional energy encouraging investment in these lower carbon energy is and you've seen assets go out of the system.

Speaker Change: Fossil fuel fired power plants and Theres a lot of questions about the one remaining nuclear power plant in the state and you've seen refineries close down as you say some permanently summed it converts to other uses including two renewable fuels and what that does is it creates a.

Michael K. Wirth: And you've seen refineries close down, as you say, some permanently, some to convert to other uses, including renewable fuels. And what that does is it creates a tighter supply-demand balance, particularly as demand continues to be strong, and you need to have strong operations out of that entire system, or you need to bring in supplies from somewhere else if you've got planned or unplanned issues that the system is dealing with. And so, you know, on average, what does that mean?

Speaker Change: Titers supply demand balance, particularly as demand continues to be strong.

Speaker Change: And and you need to have strong.

Speaker Change: Operations out of out of that entire system or you need to bring in supplies from somewhere else. If you've got planned or unplanned issues that the system is dealing with and so.

Speaker Change: On average what does that mean it means margins are probably under more pressure means reliable operations are are very important and.

Michael K. Wirth: This means margins are probably under more pressure. It also means reliable operations are very important. And, you know, it's a place where we have operated for a long time and expect to continue to do so. But putting new investment into the state is a different question. I think we've been pretty clear that we have a global portfolio and we'll invest where we see the best conditions, and I wouldn't describe California that way today. Thank you. We'll go next to Alastair Syme with Citi. Thanks Mikey, can you help me understand?

It's a place where we've.

Speaker Change: Operated for a long time and expect to continue to do so, but putting new investment into the state has a different question I think we've been pretty clear that.

Speaker Change: We've got a global portfolio, and we'll invest where we see the best conditions and I wouldn't describe California that way today.

Speaker Change: Thanks, John.

Speaker Change: Thank you we'll go next to Alastair Syme with Citi.

Alastair Roderick Syme: Thanks, Mike can you help me understand the sequencing of the base case on the horse timetable goodwill the documents, but just to get your sort of view.

Alastair Roderick Syme: Thank you. We'll go next to Alastair Syme with Citi.

Michael K. Wirth: Yeah, so, you know, there are, I think, really three things if you're looking at sequencing and timing here. One is the shareholder vote, and as I said, the proxy will be mailed out in April, and the shareholder vote will occur in May. You've got regulatory approval through the FTC, and we're making good progress on that. We're working closely with the FTC in respect to their role in the process, and expect that us to be substantially complete with that here by midyear.

Alastair Roderick Syme: Got a shareholder vote in may but.

Alastair Roderick Syme: Got it.

Alastair Roderick Syme: Pending regulatory issues, but obviously importantly, the arbitration.

Speaker Change: Let's talk about the arbitration funded.

Michael K. Wirth: Yeah. So.

Michael K. Wirth: There are I think really three things if youre looking at.

Michael K. Wirth: Sequencing and timing here.

One is the shareholder vote as I said.

The proxy be mailed out in April and the shareholder vote will occur in may.

Michael K. Wirth: <unk> got regulatory approval through the FTC.

Michael K. Wirth: And we're making good progress on that and we're working closely with the FTC in respect to their role in the process and expect that to us to be substantially complete with that here by mid year.

Michael K. Wirth: And then we have arbitration, which is, I think, a little bit less well-defined at this point. The specific scheduling and timeline will be established by the arbitration tribunal. In our S4, we indicated that, you know, Hess asked the tribunal to hear the merits of the cases in the third quarter with an outcome in the fourth quarter, which would allow us to close the transaction shortly thereafter. We see no legitimate reason to delay that timeline.

Michael K. Wirth: And then we have the arbitration, which is I think a little bit less well defined at this point.

Michael K. Wirth: The specific scheduling and timeline will be established by the arbitration Tribunal.

Michael K. Wirth: Our S. Four we indicated that.

Michael K. Wirth: <unk> asked the tribunal to hear the merits of the cases in the third quarter with an outcome in the fourth quarter, which would allow us to close the transaction. Shortly thereafter, we see no legitimate reason to delay that timeline, it's consistent with what what Exxon has outlined is what they would expect but I can't say that's exactly how it runs.

Michael K. Wirth: It's consistent with what Exxon has outlined as what they would expect, but I can't say that's exactly how it unfolds because we haven't seen specific scheduling from the tribunal yet. Thank you, Alastair. Thank you. We'll take our last question from Neal Dingmann with Truist. Morning Mike, thanks for squeezing me in.

Speaker Change: Folds, because we havent seen specific scheduling from the tribunal yet.

Speaker Change: Thank you Alastair.

Speaker Change: Thank you, we'll take our last question from Neal Dingmann with truest.

Neal David Dingmann: Good morning, My time it takes for squeezing me in my question is on broad capital spend question, specifically could you just maybe speak to do you have a sort of broad strokes what percent of total spend.

Neal David Dingmann: My question is a broad capital spend question.

Neal David Dingmann: Thank you. Now, we'll take our last question from Neal Dingmann with Truist.

Neal David Dingmann: Would be directed towards the new energies and maybe the Chevron technology ventures and I'm. Just wondering how you think about margins, even though it's still early for some how the margins of these compare to your higher return traditional margin business.

Michael K. Wirth: Yeah, so, you know, there's a couple of kind of broad framing points to bear in mind as you think about that. Number one is, you know, we've guided to a long-term capital spend of around $16 billion. This year, we've got 15.5 to 16.5 billion as a range. And we intend to be very disciplined with our capital investment and only invest in the most attractive opportunities. We've also indicated that over a period of time beginning in 2022 through 2028, I think it was when we announced our Energy Transition Spotlight that we expected to spend about $10 billion on our new energies business over that period of time, $8 billion in kind of the newer emerging business lines of carbon capture and storage, renewable fuels, and hydrogen, and then another couple billion in decarbonizing our own operations and businesses. It's not completely rateable, and that is a guide that we may or may not achieve.

Speaker Change: Yeah. So.

Speaker Change: There's a couple of kind of broad framing points I think to bear in mind as you think about that number one is.

Speaker Change: We've guided to.

Speaker Change: Our long term capital spend at around $16 billion. This year, we've got to 15 five to $16 $5 billion as a range.

Speaker Change: And we intend to be very disciplined with our capital investments.

Speaker Change: And only invest in the most attractive opportunities. We've also indicated that over a period of time beginning in 2022 through 2028, I think it was when we announced.

Speaker Change: Sure.

Speaker Change: Spotlight.

Speaker Change: We expect to spend about $10 billion in our new energies business over that period of time of eight.

$8 billion in kind of the newer.

Speaker Change: Emerging business lines of carbon capture and storage renewable fuels and hydrogen and then another couple billion of Decarbonising, our own operations and businesses.

Speaker Change: It's not.

Speaker Change: Please be ratable and that is a that is a guide that we may or may not cheap we may be a little below that we maybe a little above that depending upon how these opportunities mature and new businesses and.

Michael K. Wirth: We may be a little below that, or we may be a little above that, depending upon how these opportunities mature in new businesses. And to the earlier question, we need to be sure we've got confidence when we're putting capital, particularly large capital, some of the smaller things to help accelerate technology, learning, etc., like our venture investments, which tend to be a few millions of dollars in any particular company. We recognize the risk-return equation there.

Speaker Change: To the earlier question, we need to be sure we've got confidence when we're putting capital, particularly large capital and some of the smaller things to help accelerate technology learning et cetera, like our venture investments, which tend to be a few millions of dollars in any particular company.

Speaker Change: We recognize the risk return equation, there, but larger investments we've got to have a belief that this is a business that's going to deliver a return over time and we're on the path to building a portfolio of businesses that we will do that and so that $10 billion as a guide, but we will invest in things that make sense and we will explain the numbers if they ended up a little bit different than that.

Michael K. Wirth: But larger investments, we've got to have a belief that this is a business that's going to deliver a return over time, or we're on the path to building a portfolio of businesses that will do that. And so that $10 billion is a guide, but we'll invest in things that make sense, and we'll explain the numbers if they end up a little bit different than that. And so what that can tell you is the majority of our spend is still going into our traditional business because the majority of the world's energy is still provided by our traditional business, and we've got an obligation to meet that demand as long as it's there.

Speaker Change: And so what would that can tell you is the majority of our spend is still going into our traditional business because the majority of the world's energy.

Speaker Change: Still provided by our traditional business and we've got an obligation to meet that demand as long as it's there.

Michael K. Wirth: But we're going to be very disciplined in what we invest in and only invest in the highest-return opportunities. And so each year, we issue specific guidance that you can look at. But longer term, I think you have to stay within those broad parameters and expect us to remain disciplined.

Speaker Change: But we're going to be very disciplined in what we invest in and only invest in the highest return opportunities and so each year we issued.

Specific guidance that we can you can look at it over longer term I think you have to stay within those broad parameters and expect us to remain disciplined.

I would like to thank everyone for your time today. We appreciate your interest in Chevron and your participation on today's call. Please stay safe and healthy <unk> back to you.

Jake Spiering: I would like to thank everyone for your time today. We appreciate your interest in Chevron and your participation on today's call.

Katie: Please stay safe and healthy. Katie, back to you. Thank you.

Speaker Change: Thank you. This concludes chevron's first quarter 2024 earnings Conference call you may now disconnect.

Katie: Thank you. This concludes Chevron's first quarter 2024 earnings conference call. You may now disconnect.

Speaker Change: [music].

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