Chevron Highlights Record-Setting Year at Annual Meeting of Stockholders
SAN RAMON, Calif., May 28, 2008 - Chevron Corporation (NYSE: CVX) achieved another year of record earnings and continued to build on its financial strength, Chevron Chairman and CEO Dave O'Reilly said at the company's 2008 Annual Meeting of Stockholders.
"We are delivering on our commitments and moving in the right direction," O'Reilly stated. "We have the right strategies to create a strong platform for long-term growth and to deliver value to our stockholders."
In his remarks, O'Reilly highlighted technology among several key elements contributing to Chevron's success. He credited technology for transforming not only how and where Chevron produces energy, but also how much the company can produce.
O'Reilly said technology also can create new opportunities for the company. He noted that Chevron's technology leadership in sour natural gas led to a new opportunity with the China National Petroleum Corporation in developing the Chuandongbei natural gas area in central China. In 2007 the company also opened two new global technology centers to expand its research and development capability and established alliances with government and academic institutions to pursue technology to convert nonfood sources into commercially viable biofuels.
Peter Robertson, vice chairman of the board, elaborated on Chevron's strong financial performance in 2007. He said the company's net income of $18.7 billion in 2007 represented the fourth consecutive year of record earnings. Return on capital employed for 2007 was 23 percent.
"Our strong earnings and cash flows are enabling us to return cash to our stockholders through dividends and stock buybacks and to fund a robust capital program," Robertson said. "In 2007, we repurchased $7 billion of our common shares and increased our quarterly dividend by 11.5 percent. And last month, we announced a 12.1 percent quarterly dividend increase for 2008, the 21st consecutive year Chevron will have increased its annual dividend rate."
Robertson also stressed the company's unrelenting focus on safety. "I am very proud that in 2007 we continued improving our safety performance. We are closing in on our goal to be the industry leader," he said.
Robertson then presented an overview of Chevron's $23 billion capital and exploratory expenditure program for 2008, which represents a 15 percent increase from expenditures in 2007. About 75 percent of the 2008 budget is for worldwide crude oil and natural gas exploration and production projects, with another 20 percent dedicated to the company's downstream businesses that manufacture, transport and sell gasoline, diesel fuel and other refined products.
George Kirkland, executive vice president, Global Upstream and Gas, cited the company's strong upstream position in nearly all the world's key basins, and the diversity and breadth of its asset portfolio as the foundation for future growth plans.
"Production and reserves growth begins with exploration success," Kirkland said. "Over the past six years, our exploration program has achieved a success rate of 45 percent." He noted that in 2007 Chevron added approximately 1 billion barrels of new oil-equivalent resources to its portfolio.
Kirkland also spoke about Chevron's growth opportunities and described the company's queue of 40 major capital projects, each of which represents a Chevron investment of more than $1 billion. He said these projects are key to Chevron bringing on new production to help meet the world's energy needs.
Mike Wirth, executive vice president, Global Downstream, said important achievements in 2007 included enhancements to the scale and flexibility of the company's refining system made progress in improving refinery reliability.
He told stockholders that Chevron is well positioned to meet energy demand in high-growth markets and is focused on delivering strong returns and profitable growth. Wirth said the company is focused on ensuring the long-run reliability of its refineries, and emphasized Chevron is committed to maintaining its product quality and brand strengths as the foundation of a more focused and profitable marketing business.
In closing he stated, "We're executing the right strategies, making tangible progress in the business and advancing solid opportunities for growth in volumes and margins."
Nine proposals were voted on by Chevron stockholders, and the preliminary report of the Inspector of Election was as follows:
Item 1: More than 1.7 billion shares, or approximately 94 percent of the votes cast, were voted for each of the 15 nominees for election to the board of directors.
Item 2: More than 1.7 billion shares, or approximately 97 percent of the votes cast, were voted to ratify the appointment of PricewaterhouseCoopers LLP as the independent registered public accounting firm.
Item 3: Approximately 82 percent of the outstanding shares approved the board's proposal to amend Chevron's Restated Certificate of Incorporation to increase the number of authorized shares of Chevron common stock from 4 billion to 6 billion.
Item 4: Approximately 14 percent of the votes cast were voted for the stockholder proposal to separate the CEO and chairman of the board positions.
Item 5: Approximately 24 percent of the votes cast were voted for the stockholder proposal to adopt a human rights policy and issue a report to the stockholders by October 2008 on the plan for implementing the policy.
Item 6: Approximately 25 percent of the votes cast were voted for the stockholder proposal to report on the environmental impact of expanding oil sands operations in the Canadian boreal forest.
Item 7: Approximately 9 percent of the votes cast were voted for the stockholder proposal to adopt quantitative goals for reducing greenhouse gas emissions and issue a report to stockholders by Sept. 30, 2008, on the company's plans to implement the goals.
Item 8: Approximately 8 percent of the votes cast were voted for the stockholder proposal regarding the adoption of guidelines for investing in or withdrawing from individual countries and reporting of these guidelines to the stockholders and employees by October 2008.
Item 9: Approximately 7 percent of the votes cast were voted for the stockholder proposal to report on the policies and procedures that guide the company's assessment of the adequacy of host country laws to protect human health, the environment and the company's reputation.
Final voting results will be reported in Chevron's second quarter 2008 Form 10-Q, which will be filed with the Securities and Exchange Commission in early August. Specific information about the proposals before Chevron stockholders this year may be found in the Investor Relations section of the company's Web site under Stockholder Services — "Annual Meeting Materials."
Chevron Corporation is one of the world's leading integrated energy companies, with subsidiaries that conduct business across the globe. The company's success is driven by the ingenuity and commitment of approximately 59,000 employees who operate across the energy spectrum. Chevron explores for, produces and transports crude oil and natural gas; refines, markets and distributes transportation fuels and other energy products; manufactures and sells petrochemical products; generates power and produces geothermal energy; provides energy efficiency solutions; and develops and commercializes the energy resources of the future, including biofuels and other renewable fuels. Chevron is based in San Ramon, Calif. More information about Chevron is available at www.chevron.com.
Cautionary Statement Relevant to Forward-Looking Information for the Purpose of "Safe Harbor" Provisions of the Private Securities Litigation Reform Act of 1995.
This press release of Chevron Corporation contains forward-looking statements relating to Chevron's operations that are based on management's current expectations, estimates and projections about the petroleum, chemicals and other energy-related industries. Words such as "anticipates," "expects," "intends," "plans," "targets," "projects," "believes," "seeks," "schedules," "estimates," "budgets" and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and other factors, some of which are beyond our control and are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements. The reader should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Unless legally required, Chevron undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise
Among the important factors that could cause actual results to differ materially from those in the forward-looking statements are crude oil and natural gas prices; refining margins and marketing margins; chemicals prices and competitive conditions affecting supply and demand for aromatics, olefins and additives products; actions of competitors; the competitiveness of alternate energy sources or product substitutes; technological developments; the results of operations and financial condition of equity affiliates; the inability or failure of the company's joint-venture partners to fund their share of operations and development activities; the potential failure to achieve expected net production from existing and future crude oil and natural gas development projects; potential delays in the development, construction or startup of planned projects; the potential disruption or interruption of the company's net production or manufacturing facilities or delivery/transportation networks due to war, accidents, political events, civil unrest, severe weather or crude-oil production quotas that might be imposed by OPEC (Organization of Petroleum Exporting Countries); the potential liability for remedial actions under existing or future environmental regulations and litigation; significant investment or product changes under existing or future environmental statutes, regulations and litigation; the potential liability resulting from pending or future litigation; the company's acquisition or disposition of assets; government-mandated sales, divestitures, recapitalizations, changes in fiscal terms or restrictions on scope of company operations; the effects of changed accounting rules under generally accepted accounting principles promulgated by rule-setting bodies; and the factors set forth under the heading "Risk Factors" beginning on page 32 of the company's 2007 Annual Report on Form 10-K. In addition, such statements could be affected by general domestic and international economic and political conditions. Unpredictable or unknown factors not discussed in this press release could also have material adverse effects on forward-looking statements.
U.S. Securities and Exchange Commission (SEC) rules permit oil and gas companies to disclose only proved reserves in their filings with the SEC. Certain terms, such as "resources," "oil-equivalent resources," "oil in place," "recoverable reserves," and "recoverable resources," among others, may be used in this press release to describe certain oil and gas properties that are not permitted to be used in filings with the SEC.
Published: May 2008