Chevron Corporation (CVX) Q2 2023 Earnings Call Transcript

For the period ending June 30, 2023

July 28, 2023 11:00 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Good morning. My name is Katie and I will be your conference facilitator today. Welcome to Chevron's Second Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' remarks, there will be question-and-answer session and instructions will be given at that time. [Operator Instructions]. As a reminder, this conference call is being recorded.

I will now turn the conference call over to General Manager of Investor Relations of Chevron Corporation, Mr. Jake Spiering. Please go ahead.

Jake Spiering

Thank you, Katie. Welcome to Chevron's second quarter 2023 earnings conference call and webcast. I'm Jake Spiering, General Manager of Investor Relations. Our Chairman and CEO, Mike Wirth, and CFO, Pierre Breber, are on the call with me today. We will refer to the slides and prepared remarks that are available on Chevron's website.

Before we begin, please be reminded that this presentation contains estimates, projections, and other forward-looking statements. Please review the cautionary statement on slide 2.

Now, I will turn it over to Mike.

Michael Wirth

Thank you, Jake. And thank you, everyone, for joining us today. Earlier this week, we announced several senior leadership changes, including Pierre's plans to retire next year, along with second quarter performance highlights. In a few minutes, Pierre will share more details on our financials, which included return on capital employed greater than 12% for the eighth consecutive quarter and another quarterly record in shareholder distributions of more than $7 billion.

At TCO, we're making good progress with commissioning and pre-start up activities, including introducing fuel gas to new facilities. In the third quarter, we expect mechanical completion for the Future Growth Project and to complete a major turnaround. Cost and schedule guidance is unchanged. Conversion of the field from high-pressure to low-pressure is expected to begin late this year and FGP is on track to start up by mid-next year.

We have unused contingency which gives us confidence that we'll complete the project within the total budget. After completion of these projects, TCO is expected to deliver production greater than 1 million barrels of oil equivalent per day and generate about $5 billion of free cash flow – Chevron share at $60 Brent – in 2025.

Chevron's Permian production set another record in the second quarter, about 5% above the previous quarterly high. We expect next quarter's production to be roughly flat before growing again in the fourth quarter, on track with our full-year guidance.