Chevron Reports Fourth Quarter 2023 Results
-- Reported earnings of $2.3 billion; adjusted earnings of $6.5 billion -- Record $26.3 billion cash returned to shareholders in 2023 -- Record annual worldwide and U.S. production -- Announced an 8 percent increase in quarterly dividend to $1.63/share SAN RAMON, Calif.--(BUSINESS WIRE)--February 02, 2024--
Chevron Corporation (NYSE: CVX) reported earnings of $2.3 billion ($1.22 per share – diluted) for fourth quarter 2023, compared with $6.4 billion ($3.33 per share – diluted) in fourth quarter 2022. Included in the current quarter were $1.8 billion of U.S. upstream impairment charges and $1.9 billion of decommissioning obligations from previously sold assets in the U.S. Gulf of Mexico. Foreign currency effects decreased earnings by $479 million. Adjusted earnings of $6.5 billion ($3.45 per share – diluted) in fourth quarter 2023 compared to adjusted earnings of $7.9 billion ($4.09 per share – diluted) in fourth quarter 2022. See Attachment 4 for a reconciliation of adjusted earnings.
Earnings & Cash Flow Summary
Unit 4Q 2023 3Q 2023 4Q 2022 2023 2022
-------------- -------- ------- ------- ------- -------- ----------
Total Earnings
/ (Loss) $ MM $2,259 $6,526 $6,353 $21,369 $35,465
--------------- --------- ----- ----- ----- ------ ------
Upstream $ MM $1,586 $5,755 $5,485 $17,438 $30,284
Downstream $ MM $1,147 $1,683 $1,771 $ 6,137 $ 8,155
All Other $ MM $ (474) $ (912) $ (903) $(2,206) $(2,974)
Earnings Per
Share -
Diluted $/Share $ 1.22 $ 3.48 $ 3.33 $ 11.36 $ 18.28
Adjusted
Earnings (1) $ MM $6,453 $5,721 $7,850 $24,693 $36,542
Adjusted
Earnings Per
Share -
Diluted (1) $/Share $ 3.45 $ 3.05 $ 4.09 $ 13.13 $ 18.83
Cash Flow From
Operations
(CFFO) $ B $ 12.4 $ 9.7 $ 12.5 $ 35.6 $ 49.6
CFFO Excluding
Working
Capital (1) $ B $ 11.4 $ 8.9 $ 11.5 $ 38.8 $ 47.5
--------------- --------- ----- ----- ----- ------ ------
(1) See non-GAAP reconciliation in attachments
“In 2023, we returned more cash to shareholders and produced more oil and natural gas than any year in the company’s history,” said Mike Wirth, Chevron’s chairman and chief executive officer. Cash returned to shareholders totaled over $26 billion for the year, 18 percent higher than last year’s record total, and annual worldwide net oil-equivalent production increased to over 3.1 million barrels of oil-equivalent per day, led by 14 percent growth in the United States.
“We also strengthened our portfolio with traditional and new energy acquisitions to help meet the growing demand for affordable, reliable, and ever-cleaner energy,” Wirth concluded. In 2023, the company completed several acquisitions, including PDC Energy, Inc. and a majority stake in ACES Delta, LLC, and signed an agreement to acquire Hess Corporation.
Financial and Business Highlights
3Q 4Q
Unit 4Q 2023 2023 2022 2023 2022
---------------- ----- ------------- ----- ----- ------------- -----
Return on Capital
Employed (ROCE) % 5.1% 14.5% 14.2% 11.9% 20.3%
Capital
Expenditures
(Capex) $ B $ 4.4 $ 4.7 $ 3.8 $ 15.8 $ 12.0
Affiliate Capex $ B $ 0.9 $ 0.8 $ 1.0 $ 3.5 $ 3.4
Free Cash Flow
(1) $ B $ 8.1 $ 5.0 $ 8.7 $ 19.8 $ 37.6
Free Cash Flow
ex. working
capital (1) $ B $ 7.1 $ 4.2 $ 7.7 $ 23.0 $ 35.5
Debt Ratio (end
of period) % 11.5% 11.1% 12.8% 11.5% 12.8%
Net Debt Ratio
(1) (end of
period) % 7.3% 8.1% 3.3% 7.3% 3.3%
Net
Oil-Equivalent
Production MBOED 3,392 3,146 3,011 3,120 2,999
----------------- ----- ----- ----- ----- ----- -----
(1) See non-GAAP reconciliation in attachments
2023 Financial Highlights
-- Reported earnings declined compared to last year primarily due to lower
upstream realizations, losses from decommissioning obligations for
previously sold assets in the U.S. Gulf of Mexico, higher U.S. upstream
impairment charges mainly in California and lower margins on refined
product sales.
-- Worldwide and U.S. net oil-equivalent production set annual records.
Worldwide production was up 4 percent from a year ago primarily due to
the acquisition of PDC Energy, Inc. (PDC) and growth in the Permian Basin,
which was up 10 percent over 2022.
-- Added approximately 980 million barrels of net oil-equivalent proved
reserves in 2023, which are subject to final reviews, that equate to 86
percent of net oil equivalent production for the year. The largest net
additions were from acquisitions in the United States, and extensions and
discoveries in the Permian Basin. The largest net reductions were from
revisions in the Permian Basin, east Texas and California.
-- Capex in 2023 was up 32 percent from last year primarily due to higher
investments in the United States, including about $450 million invested
in PDC assets post-acquisition and approximately $650 million of
inorganic spend, mainly due to the acquisition of a majority stake in
ACES Delta, LLC. Capex excludes the acquisition cost of PDC.
-- Cash flow from operations was lower than a year ago mainly due to lower
commodity prices and lower margins on refined product sales. Over the
past three years, the company has generated over $110 billion in cash
flow from operations and nearly $80 billion of free cash flow.
-- Eliminated over $4 billion of debt, including all debt assumed in the
PDC acquisition, resulting in a net debt ratio of 7.3 percent.
-- The company returned a record $26.3 billion of cash to shareholders
during 2023, including dividends of $11.3 billion (3 percent higher than
2022) and share repurchases of $14.9 billion (32 percent higher than last
year).
-- The company's Board of Directors declared an 8 percent increase in the
quarterly dividend to one dollar and sixty-three cents ($1.63) per share,
payable March 11, 2024, to all holders of common stock as shown on the
transfer records of the corporation at the close of business on February
16, 2024.
2023 Business Highlights
-- Completed the acquisition of PDC, enhancing the company's strong
presence in the DJ and Permian Basins in the United States.
-- Completed the acquisition of a majority stake in ACES Delta, LLC, which
is developing a green hydrogen production and storage hub in Utah.
-- Achieved first oil at the Mad Dog 2 project in the Gulf of Mexico.
-- Achieved first natural gas production from the Gorgon Stage 2
development in Australia.
-- Achieved mechanical completion on the Future Growth Project at the
company's 50 percent-owned affiliate, Tengizchevroil.
-- Converted the diesel hydrotreater at the El Segundo, California
refinery to process either 100 percent renewable or traditional
feedstocks.
-- Reached final investment decision to construct a third gathering
pipeline that is expected to increase natural gas production capacity at
the Leviathan reservoir, offshore Israel.
-- Expanded the Bayou Bend carbon capture and sequestration hub on the
U.S. Gulf Coast through an acquisition of nearly 100,000 acres.
-- Received approvals to extend Block 0 concession in Angola through
2050.
-- Received approval to extend licenses with PetroBoscan, S.A. and
PetroIndependiente, S.A. in Venezuela through 2041.
-- Acquired 73 exploration blocks in the Gulf of Mexico (GOM) lease sale
259 and submitted winning bids on 28 blocks in GOM lease sale 261,
subject to final government approval.
-- Announced a definitive agreement to acquire Hess Corporation, which is
expected to strengthen Chevron's long-term performance by adding
world-class assets and people.
Segment Highlights
Upstream
4Q 3Q 4Q
U.S. Upstream Unit 2023 2023 2022 2023 2022
--------------- ------ --- ------ ----- ----- ----- ------
Earnings /
(Loss) $ MM $ (1,347) $ 2,074 $ 2,618 $ 4,148 $ 12,621
Net
Oil-Equivalent
Production MBOED 1,598 1,407 1,192 1,349 1,181
Liquids
Production MBD 1,164 1,028 895 997 888
Natural Gas
Production MMCFD 2,604 2,275 1,789 2,112 1,758
Liquids
Realization $/BBL $ 58.69 $ 62.42 $ 66.00 $ 59.19 $ 76.71
Natural Gas
Realization $/MCF $ 1.62 $ 1.39 $ 4.94 $ 1.67 $ 5.55
---------------- ------- ------ ----- ----- ----- ------
-- U.S. upstream reported a loss in the fourth quarter 2023. The results
were lower than the year-ago period primarily due to charges associated
with decommissioning obligations for previously sold assets in the U.S.
Gulf of Mexico, higher impairment charges mainly from assets in
California, and lower realizations. These items were partially offset by