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Speaker 1: It is the second major oil deal in just the

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Speaker 1: past few weeks, and.

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Speaker 2: This is a big one.

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Speaker 1: Chevron announcing a fifty three billion dollar all stock deal

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Speaker 1: to buy Hess. And we're joined now by the two

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Speaker 1: men behind it, Mike Worth, Chevron Chairman and CEO, and

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Speaker 1: John Hess, Hess Corporation CEO. Gentlemen, Thank you so much.

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Speaker 1: What a pleasure, no joke, this is the only question

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Speaker 1: I'm getting today. Well, the toy trucks from Hess continue

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Speaker 1: to be available at Christmas time?

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Speaker 3: Yeah, so you know, not all you in suspense? Yes

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Speaker 3: they will, Okay, back next year is going to be

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Speaker 3: the sixtieth anniversary of the Hestoid truck. We sell them

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Speaker 3: on the internet and we continue, we intend to continue

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Speaker 3: selling them.

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Speaker 4: So I got to LOSK, I didn't know about these

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Speaker 4: trucks beforehand. Was it part of the deal? Is there

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Speaker 4: some line in the deal about the trucks?

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Speaker 2: Was it part of the negotiation?

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Speaker 3: Let me put it this way, Mike and I came

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Speaker 3: to a mutually agreeable understanding to continue selling the trucks.

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Speaker 1: That's a yes, That is an actual yes. And two CEOs.

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Speaker 1: So Mike walkers through. Actually how this deal did come about?

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Speaker 1: We heard earlier that you guys been talking for a

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Speaker 1: couple of years, and I'm really curious as to why

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Speaker 1: now is the right time to make this happen.

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Speaker 2: Well, we have been talking for a while.

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Speaker 5: There's a terrific alignment between the two companies, our portfolios,

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Speaker 5: the cultures of the company, and the people, and particularly

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Speaker 5: as has his development in Guyana has continued to be

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Speaker 5: de risked and progress. What was at one point in

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Speaker 5: time kind of a wider gap in valuation has narrowed

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Speaker 5: and the stocks of the two companies have traded into

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Speaker 5: a range where it works for both of us. And

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Speaker 5: so now it's the time that those circumstances have come together.

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Speaker 5: But for quite some time we've seen the fit and

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Speaker 5: the appeal and been working on this.

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Speaker 1: Which I'm just so curious John, because on the call,

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Speaker 1: it seemed like some analysts were intimating that, hey, did

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Speaker 1: you get a high enough price?

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Speaker 2: Sure?

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Speaker 1: And also you're doing things very well in Guyana, and

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Speaker 1: I appreciate it's also the back and etc. But just

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Speaker 1: focus on Guyana. You guys are already crushing it, Like

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Speaker 1: why do.

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Speaker 2: You need chev run?

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Speaker 3: Yeah, it's a great question. I think some context would

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Speaker 3: be important. Our stock for the last five years was

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Speaker 3: the number one total share holder return in the industry,

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Speaker 3: whether it's independent or whether it's major oil company. Last

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Speaker 3: year our stock went up ninety four percent, number two

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Speaker 3: on the SMP. So we've already created a lot of

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Speaker 3: value at the same time. Now that the pricing got

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Speaker 3: in arrange that would work both for Chevron and work

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Speaker 3: for Hess.

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Speaker 2: We think we came up with a win win.

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Speaker 3: Hess brings Chevron growth in resource, growth in production, growth

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Speaker 3: in cash flow. Chevron brings Hess financial strength in terms

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Speaker 3: of a diversity of world class assets, in terms of

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Speaker 3: sterling balance sheet, and in terms of industry leading cash returns.

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Speaker 3: And when you put the two together, you create the

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Speaker 3: premier oil and gas company position for the energy transition.

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Speaker 4: Mike, what I'm hearing here is that this is a

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Speaker 4: great fit. Could you do this on your own? Could

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Speaker 4: you build what Hess has built from the ground up?

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Speaker 4: Is it easy to buy the build right now?

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Speaker 5: Well, Look, this is about long term growth and long

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Speaker 5: term value, which is what we're always seeking. Hess has

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Speaker 5: a unique portfolio that actually strengthens our portfolio with some

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Speaker 5: things we're always trying to do. We're always out exploring,

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Speaker 5: We're looking for new finds g on us the biggest

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Speaker 5: discovery in more than a decade.

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Speaker 2: In this industry.

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Speaker 5: It's just a unique and compelling asset, and so it

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Speaker 5: would be difficult for us to do on our own.

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Speaker 5: We continue to explore, we'll continue. Everybody in our industry

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Speaker 5: is looking for these things. But this was a great

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Speaker 5: opportunity for us to join a partnership that's done a

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Speaker 5: terrific job in developing this asset. But also the other

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Speaker 5: assets in the Hess portfolio are ones that will be

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Speaker 5: additive for us as well, the Bok and the deep

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Speaker 5: water Gulf of.

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Speaker 2: Mexico Southeast Asia.

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Speaker 5: And so it's a very nice fit at a portfolio level,

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Speaker 5: nice fit at a culture level, and we're going to

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Speaker 5: create more value for shareholders.

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Speaker 4: Yeah.

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Speaker 1: So let's get to the bog and part too. So

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Speaker 1: how important is the balking going to be in your portfolio?

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Speaker 2: Because clearly the.

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Speaker 1: Rhetoric gap of this deal was it's all about Guiana, right, Like,

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Speaker 1: that's this deep water, it's amazing, the costs are so low,

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Speaker 1: it's going to be awesome.

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Speaker 2: Well, where's the balcon in this? Well, balcon is very important.

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Speaker 5: We've got a big shale business already, right with positions

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Speaker 5: of the Permian. The DJ basin, we're the largest producer

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Speaker 5: and Hess has been doing a great.

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Speaker 2: Job in the Bakon for a long time.

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Speaker 5: That's really where this all began, and so for us,

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Speaker 5: it's about adding another scaled position in shale that is

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Speaker 5: performing very well. We can bring whatever expertise we may have.

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Speaker 5: We're working on technologies to improve recovery and learn from

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Speaker 5: our new colleagues at Hesse.

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Speaker 2: We're doing things in a basin.

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Speaker 5: When we went to the DJ, we learned some things

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Speaker 5: that we hadn't been doing in the Permian that made

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Speaker 5: us better. I'm certain the same thing will happen here.

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Speaker 5: So it's absolutely an important part of the transaction.

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Speaker 4: John, you talked about the points narrowing. You started off

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Speaker 4: far apart BIDOSK kind of widespread.

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Speaker 2: Ok Man, what rules it in?

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Speaker 4: What factors allowed you to bring that understanding between the

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Speaker 4: two firms together?

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Speaker 3: Well, you know the gap in shareholders recognizing our value.

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Speaker 3: We weren't getting credit for this eleven billion barrels of

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Speaker 3: oil equivalent resource that.

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Speaker 2: We had in the market.

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Speaker 4: Narrated the gap for you.

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Speaker 3: Yes, exactly, and then it got to the point where

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Speaker 3: it got to the wind zone for Mike and the

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Speaker 3: wind zone for us. And you also got to remember

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Speaker 3: this is a stock for stock deals, So some people

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Speaker 3: would say, well, geez, you're selling it, and we're not

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Speaker 3: selling for cash. We're staying invested. Our family is going

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Speaker 3: to be a long term shareholder of Chevron. We're happy

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Speaker 3: about it, and we think there's going to be a

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Speaker 3: lot of upside to come. In addition of which our

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Speaker 3: own dividend is going to go from a dollar seventy

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Speaker 3: five a share to six dollars a share and next

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Speaker 3: year a six fifty a share. So you're getting the

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Speaker 3: benefit of growth and asset value with growth, and cash

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Speaker 3: with turns, and that's a magic formula. And I think

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Speaker 3: it'll be the best oil company to own, and actually

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Speaker 3: the best oil company to work for.

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Speaker 1: I have to say, you guys need to get along

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Speaker 1: quite well. You don't always see that with the oil mergers.

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Speaker 1: How did you guys first start this conversation? Like years ago?

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Speaker 2: What was what was that?

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Speaker 4: Was it?

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Speaker 1: Like you guys at a Sarah week dinner, like chatting?

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Speaker 2: What was it?

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Speaker 3: Like?

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Speaker 5: It was actually the dinner, but it wasn't it Sarah Wick.

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Speaker 5: It was at another location. But look, John and I

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Speaker 5: have been friends. We've been great admirers of hess. I've

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Speaker 5: been a great admirer of John for many, many years,

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Speaker 5: and it was a very natural evolution, I think, as

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Speaker 5: we're both looking to improve our businesses and create value

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Speaker 5: for our Showholder's been a nice conversation. As John said,

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Speaker 5: in the beginning, the market wasn't recognizing the potential in

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Speaker 5: the Guyana acid in particular, is that's been de risked

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Speaker 5: and as we get closer and closer to this cash

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Speaker 5: flow inflection, we really did move into this zone. But

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Speaker 5: it's been very it's been a very friendly discussion.

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Speaker 2: Along the way like it and by the way, you.

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Speaker 5: Haven't mentioned yet, but we look forward to John joining

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Speaker 5: Chevron's board of directors and continuing to exert influence over

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Speaker 5: the strategy of our company. And he's got key relationships

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Speaker 5: with partners and governments around the world that will continue

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Speaker 5: to benefit from it.

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Speaker 3: And also, if I can, you know, Mike and I've

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Speaker 3: known as each other through the industry for years. I

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Speaker 3: have a lot of respect for him. I think he's

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Speaker 3: the best CEO in the energy industry, one of the

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Speaker 3: best in the unitied state. So have a lot of

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Speaker 3: respect for him, So there.

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Speaker 1: Wasn't succession things for Hess.

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Speaker 3: It was not a succession, No, No, we were actually

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Speaker 3: prepared to continue as an independent.

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Speaker 2: That's what our history is.

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Speaker 3: We're celebrating our ninetieth anniversary as a company this year.

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Speaker 3: We have the best hand in the business, the best

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Speaker 3: growth portfolio the business, and we're just executing the strategy

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Speaker 3: go forward.

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Speaker 2: But you know, Chevron.

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Speaker 3: Brings forward that diverse portfolio assets, strong balance sheet as

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Speaker 3: well as high cash returns.

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Speaker 2: And you put those.

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Speaker 3: Strainths together with our growth trains, you really create I'd say,

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Speaker 3: you know the premiere energy company that's out.

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Speaker 2: There, Mike.

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Speaker 4: There are many assets like Hess out there, but there

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Speaker 4: are a lot of assets out there. And I hate

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Speaker 4: to sort off this question to day. When you take

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Speaker 4: a massive deal, what are you done yet? Is this

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Speaker 4: an industry that is going to continue to consolidate. We've

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Speaker 4: just seen two really big deals in as many weeks

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Speaker 4: that can't be by accident.

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Speaker 5: Well, I can only speak to our deal, and this

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Speaker 5: is the right deal for us. We actually did another

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Speaker 5: deal earlier this year, so for us, integrating is very important.

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Speaker 5: To do a transaction, you actually have to create value.

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Speaker 5: You need to bring the companies together the people you

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Speaker 5: need to continue to operate safely and deliver to your customers.

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Speaker 5: And so our focus for the next you know, several months,

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Speaker 5: if not longer, is really about execution and executing.

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Speaker 2: Well in the long time.

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Speaker 5: You know, our industry has grown through organic and inorganic

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Speaker 5: activity over time.

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Speaker 2: Our company has done the same.

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Speaker 5: And I do think you know, in the future there

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Speaker 5: potentially could be other things, but that's that's not here

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Speaker 5: and now that's further down the road for sure.

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Speaker 1: Do you guys think that oil's going to stay volatile

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Speaker 1: and trade above one hundred one hundred and fifty. I'm

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Speaker 1: not going to jun because I feel like maybe you

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Speaker 1: can talk more about what you really think the oil

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Speaker 1: price is going to be. Now.

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Speaker 3: Look, you know, in the short term there's a direct

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Speaker 3: correlation between world oil inventories and price. World inventories are

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Speaker 3: drawing in about a million barrels a day this quarter.

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Speaker 3: As you get to next year, we think demand's going

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Speaker 3: to grow maybe a million and a half barrels a day,

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Speaker 3: barring a worldwide recession.

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Speaker 2: Hopefully we don't get there.

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Speaker 3: I know there are all kinds of gap polytical events,

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Speaker 3: be it in the Ukraine or be it in the

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Speaker 3: event that are going on right now, tragic events. But

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Speaker 3: taking that factor out, you know, we think the market's

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Speaker 3: going to be tight and the supply side of the

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Speaker 3: equation is going to have to run fast to keep

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Speaker 3: up with the demand side. Shales no longer the swing producer.

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Speaker 3: Saudi Arabia and Opek are They're going to keep the

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Speaker 3: market stabilized. But I think the real issue for the

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Speaker 3: world to understand is that oil and gas are needed

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Speaker 3: for decades. They're key to an affordable, just and secure

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Speaker 3: energy transition. I think the conflict in Ukraine put a

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Speaker 3: shining light on energy security. And at the end of

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Speaker 3: the day, you know, oil and gas are strategic industry

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Speaker 3: for our country in terms of jobs twelve million jobs,

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Speaker 3: more than automotive direct and indirect, in terms of electricity

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Speaker 3: costs two to three times less than they are in

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Speaker 3: Europe and most of Asia, and ultimately national security. We're

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Speaker 3: energy independent Europe by seventy percent of their oil, China

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Speaker 3: buy seventy percent, So we have a real strength. We

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Speaker 3: should be leaning into it for economic prosperity, but also

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Speaker 3: national security.

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Speaker 4: Mike, isn't that the real message from this deal? You

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Speaker 4: could have done a deal in the energy transition space.

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Speaker 4: You didn't You did this deal. Isn't the message coming

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Speaker 4: from this that the industry is now to point where

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Speaker 4: it is going to invest in the future, That the

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Speaker 4: energy transition story is of interest, but it's not the

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Speaker 4: only area of interest. That this is an industry the

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Speaker 4: country that the world still needs to rely on. You

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Speaker 4: could have done other deals, you did this one. Isn't

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Speaker 4: that the message that comes from this.

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Speaker 2: Well, I'd put it a little differently. We have done

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Speaker 2: other deals.

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Speaker 5: Earlier this quarter, we closed on the largest green hydrogen

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Speaker 5: manufacturing and storage facility that will be built in the

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Speaker 5: United States. We're the second largest renewable fuels producer in

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Speaker 5: the US, and we're expanding our production capacity there.

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Speaker 2: So we are doing the other deals.

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Speaker 5: But I think the point that John's making is really

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Speaker 5: important to continue to invest in the energy system that

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Speaker 5: supplies the world today, even as we're investing in one

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Speaker 5: that can integrate into that and help reduce the carbon

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Speaker 5: intensity tomorrow. We believe the future of energy is lower carbon.

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Speaker 5: We believe these new technologies will play a greater role,

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Speaker 5: and we continue to invest. So I don't think you

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Speaker 5: should read this as a lack of commitment to the

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Speaker 5: energy transition, but we need to invest in what the

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Speaker 5: world runs on today. This makes us a stronger producer.

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Speaker 5: It takes two great American companies and brings them together,

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Speaker 5: which is good for national security and economic security.

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Speaker 2: And we're committed.

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Speaker 5: Both of our companies are committed to a lower carbon

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Speaker 5: energy system.

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Speaker 1: Mike, speaking of are you able to pump more in

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Speaker 1: Venezuela right now? And we've be investing more in Venezuela

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Speaker 1: because of some sanction relief.

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Speaker 5: So we have seen production in our ventures in Venezuela

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Speaker 5: increase this year from around fifty thousand barrels a day

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Speaker 5: when the year began to something between one hundred and

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Speaker 5: one hundred and fifty today, and we've been gradually seeing

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Speaker 5: that come up. We've recently seen some further actions by

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Speaker 5: the US to reduce the sanctions on Venezuela. This is

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Speaker 5: a slow moving story.

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Speaker 1: Sustainable though, Like if you increase to one pin fifty,

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Speaker 1: can you hold it there?

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Speaker 5: I think we can as long as we can operate

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Speaker 5: the way we're operating today. And some of these constraints

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Speaker 5: have been taken off of us, and the Venezuelan industry

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Speaker 5: has been under pressure for a variety of reasons for

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Speaker 5: the last couple of decades, and turning that around will

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Speaker 5: take time and it will take investments. So I wouldn't

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Speaker 5: expect this to be something that goes up dramatically, but yes,

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Speaker 5: we've seen some steady improvement and we're looking to try

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Speaker 5: to continue that.

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Speaker 1: Gentlemen, thank you so much. We could talk forever, but

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Speaker 1: we'll let you guys go. It's been a very long day, Mike.

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Speaker 1: We're Chevron chairman and CEO and John hess Has Corporation

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Speaker 1: CEE you congrats on the merger.

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Speaker 4: Guys, thank you, you