Chevron Reports Fourth Quarter 2023 Results

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
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