1 00:00:00,040 --> 00:00:02,719 Speaker 1: So let's bring in Mike Fourth now, chairman and CEO 2 00:00:03,120 --> 00:00:05,520 Speaker 1: of Chevron. Mike, it's always great to see you. Thank 3 00:00:05,559 --> 00:00:06,520 Speaker 1: you so much for joining. 4 00:00:07,600 --> 00:00:08,760 Speaker 2: It's a pleasure to be with you. 5 00:00:09,160 --> 00:00:11,200 Speaker 1: So, Mike, I promised Romaine that I did the nerdy 6 00:00:11,240 --> 00:00:14,400 Speaker 1: stuff first. So fair enough, let's start with the Permian 7 00:00:14,440 --> 00:00:17,919 Speaker 1: because the growth rate in the Permium was truly spectacular. 8 00:00:18,000 --> 00:00:22,680 Speaker 1: Production overall was up fourteen percent. Fourteen percent growth in 9 00:00:22,720 --> 00:00:25,080 Speaker 1: the Permian. That's incredible. And if you take a look 10 00:00:25,079 --> 00:00:26,600 Speaker 1: at what your growth forecast is going to be over 11 00:00:26,600 --> 00:00:28,320 Speaker 1: the next year, you're still looking at that one million 12 00:00:28,320 --> 00:00:30,800 Speaker 1: barrels of oil a day for twenty twenty five. What 13 00:00:30,960 --> 00:00:32,320 Speaker 1: is really driving that? 14 00:00:34,080 --> 00:00:37,839 Speaker 3: Well, Alex, it's great execution, and it really starts outside 15 00:00:37,840 --> 00:00:38,280 Speaker 3: the Permian. 16 00:00:38,360 --> 00:00:39,640 Speaker 2: It was a year of records for US. 17 00:00:39,680 --> 00:00:42,400 Speaker 3: We had record global oil and gas production of three 18 00:00:42,400 --> 00:00:45,919 Speaker 3: point one million barrels a day, record US production, and 19 00:00:46,000 --> 00:00:48,080 Speaker 3: in the fourth quarter we had a record Permian production 20 00:00:48,240 --> 00:00:51,600 Speaker 3: of over eight hundred and seventy thousand barrels per day. 21 00:00:52,520 --> 00:00:55,720 Speaker 3: So really strong performance in our business across the board 22 00:00:55,800 --> 00:00:59,000 Speaker 3: allowed us to return our record twenty six million dollars 23 00:00:59,000 --> 00:01:01,480 Speaker 3: to shareholders, almost ten percent of our market cap and 24 00:01:01,520 --> 00:01:04,760 Speaker 3: as you mentioned, we raise our dividend eight percent earlier 25 00:01:04,800 --> 00:01:10,240 Speaker 3: this year. So strong performance around the world. Permians certainly 26 00:01:10,360 --> 00:01:13,360 Speaker 3: showing very strong growth and momentum as we move towards 27 00:01:13,400 --> 00:01:15,319 Speaker 3: a million barrels a day in twenty twenty five. 28 00:01:15,720 --> 00:01:17,319 Speaker 1: So my got You mentioned on the call that you 29 00:01:17,360 --> 00:01:19,720 Speaker 1: weren't going to be increasing capex, So I'm just wondering 30 00:01:19,800 --> 00:01:23,240 Speaker 1: what your confidence level is and maintaining and improving those 31 00:01:23,280 --> 00:01:25,000 Speaker 1: productivity and efficiency gains. 32 00:01:26,800 --> 00:01:26,959 Speaker 2: Well. 33 00:01:27,000 --> 00:01:29,759 Speaker 3: Capital discipline always matters in our business, and for years 34 00:01:29,800 --> 00:01:34,000 Speaker 3: now we have been very committed to a tight capital 35 00:01:34,040 --> 00:01:37,000 Speaker 3: budget and focusing on execution. What we've done now in 36 00:01:37,040 --> 00:01:40,360 Speaker 3: the Permian is we've grown to a point where we'll 37 00:01:40,880 --> 00:01:43,600 Speaker 3: hold our cap ex as guided about five billion dollars 38 00:01:43,600 --> 00:01:48,600 Speaker 3: this year and see continued growth this year and next year. 39 00:01:48,920 --> 00:01:50,480 Speaker 2: And as we get to. 40 00:01:50,480 --> 00:01:52,280 Speaker 3: Next year at a million barrels a day, we'll start 41 00:01:52,280 --> 00:01:54,800 Speaker 3: to talk about holding a plateau which allows us to 42 00:01:54,840 --> 00:01:57,559 Speaker 3: actually invest even less capital. 43 00:01:57,200 --> 00:01:58,160 Speaker 2: In order to do that. 44 00:01:58,400 --> 00:02:02,480 Speaker 3: So we're very committed to capital discipline through the cycle. 45 00:02:02,520 --> 00:02:04,920 Speaker 3: It matters in this industry. It's an industry that at 46 00:02:04,920 --> 00:02:08,440 Speaker 3: times hasn't necessarily exhibited that, and I think it's important 47 00:02:08,440 --> 00:02:11,840 Speaker 3: that our company and other companies remember the lessons of 48 00:02:11,840 --> 00:02:12,800 Speaker 3: commodity markets. 49 00:02:13,080 --> 00:02:16,400 Speaker 4: What does that mean my going forward? Here once the 50 00:02:16,639 --> 00:02:20,880 Speaker 4: acquisition of Has closes later this year. Here what type 51 00:02:20,880 --> 00:02:23,280 Speaker 4: of changes still need to be made. 52 00:02:24,560 --> 00:02:28,280 Speaker 3: We close the deal with Hess, which is expected mid year, 53 00:02:28,680 --> 00:02:33,639 Speaker 3: We've got a fairly involved FTC information request that we're 54 00:02:33,639 --> 00:02:36,600 Speaker 3: in the midst of. Right now, we'll have a company 55 00:02:36,600 --> 00:02:40,079 Speaker 3: that has even stronger production growth further. 56 00:02:39,840 --> 00:02:40,680 Speaker 2: Into the future. 57 00:02:41,320 --> 00:02:45,160 Speaker 3: It will allow us to underpin not only the dividend, 58 00:02:45,240 --> 00:02:48,600 Speaker 3: but also a very strong balance sheet and continued share 59 00:02:48,639 --> 00:02:52,000 Speaker 3: repurchases not only through the balance of this decade, but 60 00:02:52,040 --> 00:02:54,400 Speaker 3: well into the next. So it takes what's a strong 61 00:02:54,480 --> 00:02:58,040 Speaker 3: portfolio for us today and it makes it even stronger 62 00:02:58,040 --> 00:02:58,640 Speaker 3: for longer. 63 00:02:58,880 --> 00:03:00,880 Speaker 4: And then of course looking at the strength in the stock, 64 00:03:00,919 --> 00:03:03,000 Speaker 4: looking at the strength of the balance sheet. Mike, I'm 65 00:03:03,040 --> 00:03:05,400 Speaker 4: sure you've heard the questions here. Do you plan any 66 00:03:05,440 --> 00:03:07,000 Speaker 4: other major acquisitions this year? 67 00:03:09,280 --> 00:03:12,040 Speaker 3: We just completed one acquisition last year, we're in the 68 00:03:12,080 --> 00:03:17,680 Speaker 3: midst of another one, and we're always alert to opportunities. 69 00:03:17,680 --> 00:03:22,280 Speaker 3: But integrating a company in our industry matters. We operate 70 00:03:22,320 --> 00:03:25,040 Speaker 3: in challenging environments. The work we do needs to be 71 00:03:25,080 --> 00:03:28,000 Speaker 3: done with precision, to keep people safe, to protect the environment, 72 00:03:28,360 --> 00:03:32,400 Speaker 3: and integrating two companies together and all the things that 73 00:03:32,440 --> 00:03:35,520 Speaker 3: go with that are something we take very very. 74 00:03:35,320 --> 00:03:39,720 Speaker 2: Seriously, and so we've got our hands full right now. 75 00:03:40,400 --> 00:03:42,880 Speaker 3: We'll work hard to close the HAS deal and do 76 00:03:42,960 --> 00:03:46,440 Speaker 3: a good job integrating a great company with ours, and 77 00:03:46,680 --> 00:03:49,680 Speaker 3: as we go forward, if opportunities present themselves, will certainly 78 00:03:49,680 --> 00:03:53,120 Speaker 3: evaluate them. But we're not feeling a need to do 79 00:03:53,160 --> 00:03:55,080 Speaker 3: anything to see you speak. 80 00:03:54,840 --> 00:03:56,800 Speaker 1: For Na No right now, I got a lot going on, 81 00:03:56,880 --> 00:04:00,440 Speaker 1: fair enough, Mike. We talked about the buy back and 82 00:04:00,440 --> 00:04:02,320 Speaker 1: stuff and sort of bought back about five percent of 83 00:04:02,360 --> 00:04:04,120 Speaker 1: your stock last year. Do you guys have a target 84 00:04:04,120 --> 00:04:05,200 Speaker 1: for what that's going to be this year. 85 00:04:07,480 --> 00:04:11,680 Speaker 3: We're right now under some sec constraints because of the transactions, 86 00:04:11,920 --> 00:04:14,160 Speaker 3: but the last two quarters we've brought back about three 87 00:04:14,200 --> 00:04:16,719 Speaker 3: and a half billion dollars each quarter. Once we're out 88 00:04:16,720 --> 00:04:21,799 Speaker 3: from under those constraints and we have the shareholder vote, 89 00:04:22,040 --> 00:04:24,640 Speaker 3: we've indicated that we would step up to a twenty 90 00:04:24,720 --> 00:04:28,040 Speaker 3: billion dollar run rate in a commodity environment like the 91 00:04:28,080 --> 00:04:32,159 Speaker 3: one that we see today. Last year we repurchased just 92 00:04:32,279 --> 00:04:35,920 Speaker 3: short of fifteen billion dollars, and so that would be 93 00:04:36,000 --> 00:04:37,839 Speaker 3: a significant step up. It would be a sign of 94 00:04:37,880 --> 00:04:40,920 Speaker 3: confidence in the future, just as the eight percent increase 95 00:04:41,360 --> 00:04:43,960 Speaker 3: in the dividend this week is a sign of confidence 96 00:04:44,040 --> 00:04:47,320 Speaker 3: in the future. So that's the guidance we've currently got 97 00:04:47,320 --> 00:04:48,360 Speaker 3: out there in the marketplace. 98 00:04:48,720 --> 00:04:50,960 Speaker 1: Mike, I'm interested when we just take a step back 99 00:04:50,960 --> 00:04:54,480 Speaker 1: for a second. The last twelve hours was about big 100 00:04:54,480 --> 00:04:57,520 Speaker 1: oil delivering, and it was also about big tech delivering. 101 00:04:57,600 --> 00:05:00,520 Speaker 1: And both now have dividends, and both now have IBAX. 102 00:05:00,960 --> 00:05:04,040 Speaker 1: How does it oil big oil stay relevant in a 103 00:05:04,120 --> 00:05:07,520 Speaker 1: market that is just obsessed with AI and big tech. 104 00:05:09,600 --> 00:05:10,440 Speaker 2: Well, it's a very. 105 00:05:10,279 --> 00:05:13,040 Speaker 3: Interesting market, and I know you were talking about this earlier. 106 00:05:13,680 --> 00:05:17,599 Speaker 3: There are a handful of technology companies that really have 107 00:05:17,720 --> 00:05:22,120 Speaker 3: been driving this market, and the valuations obviously have gotten 108 00:05:22,120 --> 00:05:24,880 Speaker 3: to levels that we've never seen before. 109 00:05:26,400 --> 00:05:28,560 Speaker 2: We are an. 110 00:05:27,839 --> 00:05:30,800 Speaker 3: Essential industry to the global economy, or an industry that's 111 00:05:30,800 --> 00:05:32,840 Speaker 3: been around for a long time and will be around 112 00:05:32,880 --> 00:05:33,440 Speaker 3: for a long. 113 00:05:33,320 --> 00:05:34,039 Speaker 2: Time in the future. 114 00:05:34,480 --> 00:05:37,200 Speaker 3: We have a track record of generating cash and returning 115 00:05:37,240 --> 00:05:40,279 Speaker 3: that to shareholders. So our dividend yield is above four percent. 116 00:05:41,080 --> 00:05:45,520 Speaker 3: We've increased our dividend for thirty seven consecutive years. Our 117 00:05:45,560 --> 00:05:48,159 Speaker 3: dividend yield is more than two and a half times 118 00:05:48,320 --> 00:05:50,280 Speaker 3: the yield of the S and P, and. 119 00:05:50,279 --> 00:05:53,680 Speaker 2: Our free cash flow yield is almost. 120 00:05:53,480 --> 00:05:55,559 Speaker 3: Three times the S and P at over eight percent, 121 00:05:55,600 --> 00:05:58,960 Speaker 3: and we've got a track record of returning that to shareholders. 122 00:05:59,000 --> 00:06:00,640 Speaker 2: And yet energy trades at about. 123 00:06:00,440 --> 00:06:03,960 Speaker 3: Half the multiples of the market broadly, and even less 124 00:06:04,160 --> 00:06:06,000 Speaker 3: than some of the companies that you're referring to. 125 00:06:06,120 --> 00:06:06,960 Speaker 2: So there's a. 126 00:06:06,920 --> 00:06:14,080 Speaker 3: Real value opportunity here for long patient shareholders to secure income, 127 00:06:14,120 --> 00:06:18,080 Speaker 3: to secure the future appreciation, and it's underpinned by the 128 00:06:18,720 --> 00:06:23,080 Speaker 3: strong cash flow, the strong balance sheet, and the track. 129 00:06:22,880 --> 00:06:24,600 Speaker 2: Record that a company like ours offers. 130 00:06:24,920 --> 00:06:29,600 Speaker 4: What is I guess the corporate future of Chevron here? 131 00:06:29,760 --> 00:06:32,279 Speaker 4: I mean looking through today's numbers, Mike. Of course we 132 00:06:32,360 --> 00:06:34,560 Speaker 4: had that big write down, the three point seven billion 133 00:06:35,000 --> 00:06:37,440 Speaker 4: stemming from a write down of those California assets, and 134 00:06:37,440 --> 00:06:39,800 Speaker 4: of course there's a much bigger story behind that with 135 00:06:39,839 --> 00:06:42,640 Speaker 4: regards to the regulate the legislative changes that have already 136 00:06:42,680 --> 00:06:45,200 Speaker 4: come down the pike, and some additional regulatory changes that 137 00:06:45,320 --> 00:06:49,400 Speaker 4: might also be coming. Is Chevron still wedded to California 138 00:06:49,440 --> 00:06:50,200 Speaker 4: as its own base? 139 00:06:51,760 --> 00:06:56,520 Speaker 3: Well, California has for the last couple of decades pursued 140 00:06:56,600 --> 00:06:59,640 Speaker 3: policies that are intended and this has been a part 141 00:06:59,680 --> 00:07:03,400 Speaker 3: of the plan to reduce demand for our products, which 142 00:07:03,640 --> 00:07:07,279 Speaker 3: hasn't really happened. Demand remains very strong, but also to 143 00:07:07,360 --> 00:07:10,640 Speaker 3: reduce investment in our industry. And these policies have made 144 00:07:10,720 --> 00:07:14,600 Speaker 3: investment in California less attractive than investment in other places 145 00:07:14,600 --> 00:07:16,680 Speaker 3: in the US and other places. 146 00:07:16,360 --> 00:07:19,360 Speaker 2: Around the world. And what it's likely to do. 147 00:07:19,280 --> 00:07:23,600 Speaker 3: Is reduce production and reduce supply, and if we don't 148 00:07:23,600 --> 00:07:26,120 Speaker 3: see a corresponding reduction in demand, that. 149 00:07:26,440 --> 00:07:29,000 Speaker 2: Creates some risks for the marketplace. 150 00:07:29,400 --> 00:07:34,320 Speaker 3: But policy choices do have investment consequences. They do influence 151 00:07:34,360 --> 00:07:37,240 Speaker 3: investment decisions, and what we see playing out in California 152 00:07:37,320 --> 00:07:40,520 Speaker 3: is exactly what the state has been seeking. 153 00:07:40,760 --> 00:07:41,960 Speaker 1: Mike, do you want to move to Texas. 154 00:07:44,200 --> 00:07:47,080 Speaker 3: We've got a lot of operations in Texas. We've got 155 00:07:47,080 --> 00:07:49,120 Speaker 3: a lot of people in the Great State of Texas, 156 00:07:49,160 --> 00:07:51,440 Speaker 3: and it's where a lot of the growth we've been 157 00:07:51,440 --> 00:07:54,080 Speaker 3: talking about in the Permian Basin has been occurring. So 158 00:07:54,280 --> 00:07:58,680 Speaker 3: we've got a large presence there and it's a growing presence. 159 00:07:59,480 --> 00:08:01,760 Speaker 1: Farands like to that point, I just wanted to get 160 00:08:01,800 --> 00:08:03,400 Speaker 1: your sense there's so much to get through too, But 161 00:08:03,800 --> 00:08:06,960 Speaker 1: geopolitical risk where you sit, what's the biggest one? Is 162 00:08:07,000 --> 00:08:10,320 Speaker 1: it California? Is it US policy? AKA and Moretorium and 163 00:08:10,440 --> 00:08:14,720 Speaker 1: lergy exports? Is it Venezuela? Is Guyana? And Venezuela and 164 00:08:14,760 --> 00:08:16,960 Speaker 1: guy On that dynamic there what keeps you up at night? 165 00:08:17,080 --> 00:08:23,040 Speaker 3: Among all those, Well, our business brings with it geopolitical 166 00:08:23,560 --> 00:08:27,200 Speaker 3: interactions and geopolitical risk. You've run through a whole series 167 00:08:27,240 --> 00:08:30,320 Speaker 3: of them that are are part of our world. Some 168 00:08:30,560 --> 00:08:32,839 Speaker 3: are present in the short term, so the Middle East 169 00:08:33,480 --> 00:08:36,200 Speaker 3: presents risks each and every day to security of passage 170 00:08:36,320 --> 00:08:40,120 Speaker 3: of vessels, the risks that we could see some sort 171 00:08:40,120 --> 00:08:44,199 Speaker 3: of interruptions to flow you get out into a medium 172 00:08:44,320 --> 00:08:48,200 Speaker 3: term timeframe, and some of the policies in the US 173 00:08:48,280 --> 00:08:52,880 Speaker 3: where we've seen mixed signals from the administration in some 174 00:08:52,920 --> 00:08:56,880 Speaker 3: instances encouragement to invest and grow, particularly when prices were high, 175 00:08:57,200 --> 00:09:01,360 Speaker 3: but in other cases cancelation of pipeline, cans of least sales, 176 00:09:01,960 --> 00:09:07,400 Speaker 3: pausing on LNG export processes which discourage investment. And so 177 00:09:07,480 --> 00:09:10,520 Speaker 3: these mixed signals in the medium term run the risk 178 00:09:10,600 --> 00:09:13,800 Speaker 3: of creating some consequences and then longer term, when policy 179 00:09:13,840 --> 00:09:17,480 Speaker 3: stays consistent as it has in California, and it starts 180 00:09:17,480 --> 00:09:22,080 Speaker 3: to influence supply. When demand is unchanged, that creates a 181 00:09:22,080 --> 00:09:24,400 Speaker 3: different set of issues. And so we deal with geopolitical 182 00:09:24,480 --> 00:09:28,080 Speaker 3: risk in every timeframe and frankly all around the world 183 00:09:28,559 --> 00:09:31,800 Speaker 3: every day. It's why you need a large portfolio, a 184 00:09:31,840 --> 00:09:34,960 Speaker 3: strong balance sheet, a diverse set of opportunities so that 185 00:09:35,040 --> 00:09:38,720 Speaker 3: you can manage that risk with all the tools. 186 00:09:38,400 --> 00:09:38,880 Speaker 2: That we have. 187 00:09:39,160 --> 00:09:41,640 Speaker 1: Mike, before I let you go talking about risk, Brent 188 00:09:41,760 --> 00:09:44,600 Speaker 1: at seventy seven, WTI at seventy two, does that surprise 189 00:09:44,640 --> 00:09:46,760 Speaker 1: you considering all the risks you were just talking about. 190 00:09:49,080 --> 00:09:52,440 Speaker 3: It's a market that is relatively balanced right now. We've 191 00:09:52,480 --> 00:09:55,600 Speaker 3: got OPEC plus making some cuts. Demand has been strong. 192 00:09:55,600 --> 00:09:57,599 Speaker 3: We saw demand go up a couple million barrels a 193 00:09:57,679 --> 00:10:00,920 Speaker 3: day last year. Global economies, certainly here in the US 194 00:10:00,960 --> 00:10:04,240 Speaker 3: with the jobs report and other indicators we're seeing, and 195 00:10:04,280 --> 00:10:08,520 Speaker 3: demand in our industry is strong. China is growing again 196 00:10:08,760 --> 00:10:11,240 Speaker 3: and not maybe as strong as it was a few 197 00:10:11,280 --> 00:10:14,400 Speaker 3: years ago, but China is growing. Europe not so much, 198 00:10:14,480 --> 00:10:18,080 Speaker 3: but global demand is going to increase again this year. 199 00:10:18,760 --> 00:10:22,400 Speaker 3: Supply has been keeping up with that demand. But the 200 00:10:22,480 --> 00:10:25,920 Speaker 3: risks that we see in the Middle East are very real, 201 00:10:25,960 --> 00:10:29,079 Speaker 3: and they could move markets. One thing that's different is 202 00:10:29,160 --> 00:10:31,480 Speaker 3: the US is now the world's biggest producer. And if 203 00:10:31,520 --> 00:10:33,959 Speaker 3: you go back to periods in the past where these 204 00:10:34,040 --> 00:10:37,080 Speaker 3: kinds of risks really did get priced quickly into the market, 205 00:10:37,360 --> 00:10:40,920 Speaker 3: it was because the US was so dependent upon supplies 206 00:10:40,920 --> 00:10:43,360 Speaker 3: from the Middle East, and other parts of the world 207 00:10:43,360 --> 00:10:46,120 Speaker 3: were as well. Today, with the US as the world's 208 00:10:46,160 --> 00:10:49,560 Speaker 3: largest supplier, there is a different balance and a different 209 00:10:50,120 --> 00:10:53,920 Speaker 3: set of exposures that I think the market is also. 210 00:10:55,360 --> 00:10:56,000 Speaker 2: Pricing in. 211 00:10:57,000 --> 00:10:59,000 Speaker 1: Mike, always a pleasure. We thank you so much for 212 00:10:59,040 --> 00:11:00,800 Speaker 1: the time. I know these are long for you. Mike Worth, 213 00:11:00,880 --> 00:11:03,920 Speaker 1: Chairman and CEO of Chevron, Thank you very much.