London, 02 February 2024, (Oilandgaspress): – 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
| Unit | 4Q 2023 | 3Q 2023 | 4Q 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.
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