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Raises share buyback guidance to $5 – $10 billion per year
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Increases return on capital employed target to 12% by 2026 at $60 Brent
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Expects operating cash flow per share to grow 10% per year through 2026 at $60 Brent
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Reaffirms carbon intensity reduction and new energies growth targets
At its annual investor meeting , Chevron Corporation reported on its progress to deliver higher returns and advance a lower carbon future.
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“We’re executing projects to lower carbon intensity to progress towards our 2050 net zero aspiration for Upstream Scope 1 and 2 emissions”
“Chevron’s executing a straightforward strategy, grounded in capital and cost discipline,” said Michael Wirth, chairman and CEO. “We’re aiming to grow cash flow and return more of it to shareholders, leveraging our strengths to deliver lower carbon energy to a growing world.”
Higher Returns
Chevron expects to continue to improve capital and cost efficiency to deliver higher returns. In line with this objective, the company announced:
- Maintaining guidance for annual organic capital and exploratory expenditures of $15 billion to $17 billion through 2026.
- A target to reduce 2026 operating expenses per barrel by more than 10% from 2021 levels.
- Expected oil and gas production CAGR greater than 3% by 2026.
The combination of a more capital-efficient investment program, lower unit costs, and higher production is expected to result in a 12% return on capital employed in 2026 and 10% CAGR of operating cash flow per share by 2026, both at $60 Brent. The company also raised its share buyback guidance range to $5 to $10 billion per year, up from prior guidance of $3 to $5 billion per year.
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“We have an advantaged portfolio and an industry leading balance sheet,” said Pierre Breber, Chevron’s CFO. “With the increase in our dividend and buybacks in the middle of our updated guidance range, cash returned to shareholders is expected to grow more than 50% from last year.”
Lower Carbon
Chevron reaffirmed its targets to lower the carbon intensity of its operations and grow new energy business lines in renewable fuels, hydrogen, carbon capture and offsets.
“We’re executing projects to lower carbon intensity to progress towards our 2050 net zero aspiration for Upstream Scope 1 and 2 emissions,” said Jay Johnson, executive vice president, Upstream. “We intend to be a leader in cost and carbon efficient production.”
In addition, the company provided updates on renewable fuels, hydrogen and carbon capture projects.
“Chevron’s new energy businesses are making progress towards our 2030 goals,” said Jeff Gustavson, president of Chevron New Energies. “We’re bringing our unique capabilities, in partnership with others, to advance lower carbon energy solutions that target harder-to-abate sectors and deliver competitive returns.”
Winning Combination
Consistent with the company’s long-standing financial priorities, improved cash generation from its traditional business is expected to support a growing dividend, investments in traditional and new energy businesses, a strong balance sheet, and steady buybacks.
“I believe Chevron is well positioned for the future with a leading traditional energy business and faster-growing new energy business lines,” Wirth concluded. “Combined with our strong track record of financial and operating discipline, we expect to deliver on our objective of higher returns and lower carbon that will benefit stakeholders for years to come.”
Webcast
Chevron will conduct a webcast on Tuesday, March 1, 2022, at 10:00 a.m. ET to discuss the company’s strategy at the annual investor meeting.
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