Chevron Highlights Record-Setting Year at Annual Stockholders' Meeting
Safety, Operations and Financial Returns Set New Company Milestones
SAN RAMON, Calif., April 25, 2007 -- Chevron Corporation (NYSE: CVX) had a record-setting year in 2006, and the company is delivering on its commitments to supply safe, clean and reliable energy to fuel economic growth, Chevron Chairman and CEO Dave O'Reilly said at the company's 2007 Annual Stockholders' Meeting.
"We had a year of strong performance," O'Reilly stated. "We have the people and the right strategies to create a platform for long-term growth and sustained superior performance."
In his remarks to stockholders, O'Reilly highlighted technology among several key elements contributing to Chevron's success. He credited the role technology plays in bringing energy resources to market, enabling Chevron to make advancements in exploration, deepwater development, natural gas and heavy oil to develop ever-cleaner transportation fuels and to improve energy efficiency.
Technology also is creating new business opportunities for Chevron. "We're developing new technologies to advance renewable and alternative forms of energy such as biofuels," O'Reilly added.
Peter Robertson, vice chairman of the board, spoke about Chevron's strong operational performance in 2006 and the company's financial returns. For the year, Chevron reported record net income of $17.1 billion and a return on capital employed of approximately 23 percent. He added that the company increased its quarterly dividend by 15.6 percent in 2006, the 19th consecutive increase in the annual dividend. Chevron also completed a $5 billion stock buyback, bringing buybacks to a total of $10 billion within the last three years.
"2006 was an excellent year for Chevron in many ways," Robertson said. "We set another new record for safety performance. We are closing in on our goal to be the industry leader in safety performance."
Robertson also provided an overview of Chevron's plans in 2007 to invest $19.6 billion in capital and exploratory expenditures, an 18 percent increase over 2006. About 75 is percent budgeted for worldwide crude oil and natural gas exploration and production projects, with another 20 percent planned for Chevron's global refining, marketing and transportation business.
George Kirkland, executive vice president, Upstream and Gas, discussed the strength of the company's positions worldwide and the competitive advantage Chevron gains from its diversified and balanced upstream portfolio. He also stressed that production and reserves growth are progressing according to plan. He said the company is on track to grow production by an average of more than three percent a year between 2005 and 2010.
"Over the past five years, our exploration program achieved an industry-leading success rate of 45 percent," Kirkland said. "In 2006, 42 successful exploration and appraisal wells added over 1 billion barrels of oil-equivalent resources, continuing the average of 1 billion barrels per year over the five-year period. We have also had great success in our base business initiatives to minimize production declines from existing fields and continue to effectively advance our world-class queue of major capital projects to ensure long-term production growth."
Mike Wirth, executive vice president, Downstream, presented stockholders with examples of how the company is positioned to meet increased global product demand. He said Chevron is capitalizing on increased product demand by offering established brands, maintaining a strong presence in key markets and expanding refining capacity in the United States and Asia.
Wirth also stated that "2006 was a year of bests" for Chevron's downstream organization, achieving milestones in safety, refinery utilization, energy efficiency and earnings. "Downstream produced great results in 2006. With our focus on operational excellence and pursuit of selected growth opportunities, we are confident we will sustain this progress in 2007 and create long-term value for our stockholders," Wirth added.
Nine proposals were voted on by Chevron stockholders, and the preliminary report of the Inspector of Election is as follows:
Item 1: More than 1.7 billion shares, or approximately 97 percent of the votes cast, were voted for the 14 nominees for election to the Board of Directors.
Item 2: More than 1.7 billion shares, or approximately 98 percent of the votes cast, were voted to ratify the appointment of PricewaterhouseCoopers LLP as the independent registered public accounting firm.
Item 3: Approximately 80 percent of the outstanding shares were voted for the Board's proposal to amend Chevron's restated Certificate of Incorporation to repeal the supermajority vote provisions.
Item 4: Approximately 72 percent of the votes cast were voted against the stockholder proposal to report on human rights.
Item 5: Approximately 91 percent of the votes cast were voted against the stockholder proposal to report on greenhouse gas emissions.
Item 6: Approximately 92 percent of the votes cast were voted against the stockholder proposal to adopt an animal welfare policy.
Item 7: Approximately 63 percent of the votes cast were voted against the stockholder proposal to recommend amendment to the company bylaws to separate the CEO/Chairman positions.
Item 8: Approximately 10 percent of the outstanding shares were voted for the stockholder proposal to amend the company's bylaws relating to the Stockholder Rights Plan Policy. (An amendment to the company's bylaws requires a vote of more than 50 percent of the outstanding shares to be adopted.)
Item 9: Approximately 91 percent of the votes cast were voted against the stockholder proposal to report on host country environmental laws.
Final voting results will be reported in Chevron's second quarter 2007 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 in the "Notice of the 2007 Annual Meeting and the 2007 Proxy Statement."
Chevron Corporation is one of the world's leading energy companies. With approximately 56,000 employees, Chevron subsidiaries conduct business in approximately 180 countries around the world, producing and transporting crude oil and natural gas, and refining, marketing and distributing fuels and other energy products. Chevron is based in San Ramon, Calif. More information on 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 start-up 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 31 of the company's 2006 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 presentation 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: April 2007