Chevron Highlights Safety and Performance at Annual Meeting of Stockholders
HOUSTON, May 26, 2010 – A combination of safe, reliable operations and superior execution helped Chevron Corporation (NYSE: CVX) generate value for stockholders, maintain financial strength and advance a leading queue of projects, attendees were told today at the company's 2010 Annual Meeting of Stockholders.
"The world needs energy, and it will need more energy as the global economic recovery takes hold," said John Watson, chairman and CEO. "As our employees work to supply energy to fuel the world's growing economies, our commitment to safe and reliable operations will remain a core value."
Watson discussed Chevron's strong 2009 financial performance, which produced earnings of $10.48 billion. The company increased the quarterly dividend by 4.6 percent in 2009, marking 22 consecutive years of annual dividend increases. During this period, dividends grew at an average annual rate of 7 percent. Continuing the tradition, Chevron announced another quarterly dividend increase in April 2010. Watson said Chevron led its peers in total stockholder returns in the past three- and five-year periods, besting the S&P 500 by more than 10 percentage points over those spans. In Chevron's 2010 first quarter, net income was up sharply from the same period in 2009, and production increased 5 percent.
Watson also reinforced Chevron's long-standing commitment to safe, reliable operations. Chevron is an industry leader in safety and in 2009 achieved the best safety performance in the company's history. Watson also discussed the support that Chevron is lending to efforts in the Gulf of Mexico spill response. This includes participation in industry task forces assessing offshore procedures.
George Kirkland, Chevron's vice chairman and executive vice president, Global Upstream and Gas, noted that future energy demand is going to be strong, especially in developing countries, and Chevron is investing in a world-class queue of projects to meet the world's future energy needs. Chevron plans on investing $21.6 billion in 2010, with 85 percent of that expected to fund upstream activities.
Kirkland noted that in 2009 production grew to 2.7 million barrels per day. Since 2002, Chevron has added more than 9 billion barrels of oil-equivalent resources to its portfolio through exploration efforts. Nine major capital projects started up in 2009, demonstrating Chevron's ability to execute large projects. Production from project startups between 2007 and 2009 has grown to 460,000 barrels per day. These projects, along with new startups, are forecast to deliver more than 800,000 barrels per day by 2012. He also spoke about 10 major capital projects that are expected to begin production during the next three years and have a Chevron investment of more than $1 billion each.
Kirkland stated that the centerpieces of Chevron's future production growth are the Gorgon and Wheatstone natural gas projects in Australia. Chevron's $37 billion Gorgon project reached the final investment decision in 2009, and first liquefied natural gas is expected in 2014. Gorgon is expected to be the largest CO2 injection project in the world, with plans to inject and store up to 4 million metric tons of CO2 annually – more than four times as much as any other project in the world, reducing Gorgon's greenhouse gas emissions by nearly 40 percent. Wheatstone is in front-end engineering and design, with the final investment decision anticipated in 2011.
Kirkland also discussed Chevron's downstream advantages, which include industry-leading refinery utilization and assets in North America and Asia, two of the world's strongest regions for refining and retail sales. Kirkland commented that Chevron's downstream business leaders are taking steps to react to tough market conditions, high-grading the portfolio by exiting some locations and continuing to reduce costs while adhering to stringent safety standards. He noted that by creating a smaller portfolio while retaining volume and scale, Chevron intends to improve focus, efficiency and profitability.
Chevron stockholders voted on nine proposals. As of May 25, 2010, the preliminary report of the Inspector of Election was as follows:
- Item 1: More than 1.2 billion shares, or approximately 94 percent of the votes cast, were voted for the 16 nominees for election to the board of directors.
- Item 2: More than 1.6 billion shares, or approximately 99 percent of the votes cast, were voted to ratify the appointment of PricewaterhouseCoopers LLP as the independent registered public accounting firm.
- Item 3: Approximately 79 percent of the votes cast were voted for the board's proposal to approve amending Chevron's bylaws to reduce the percentage of stockholdings required for stockholders to call for special meetings.
- Item 4: Approximately 26 percent of the votes cast were voted for the stockholder proposal regarding the appointment of an independent director with environmental expertise.
- Item 5: Approximately 26 percent of the votes cast were voted for the stockholder proposal regarding holding equity-based compensation through retirement.
- Item 6: Approximately 7 percent of the votes cast were voted for the stockholder proposal regarding disclosure of payments to host governments.
- Item 7: Approximately 24 percent of the votes cast were voted for the stockholder proposal regarding guidelines for country selection.
- Item 8: Approximately 9 percent of the votes cast were voted for the stockholder proposal regarding financial risks from climate change.
- Item 9: Approximately 7 percent of the votes cast were voted for the stockholder proposal regarding a human rights committee.
Final voting results will be reported on Form 8-K, which will be filed with the Securities and Exchange Commission and available at www.chevron.com. Specific information about the proposals before Chevron stockholders this year may be found in the Investor Relations section of the company's website under Stockholder Services – "Annual Meeting Materials."
Chevron is one of the world's leading integrated energy companies, with subsidiaries that conduct business worldwide. The company's success is driven by the ingenuity and commitment of its employees and their application of the most innovative technologies in the world. Chevron is involved in virtually every facet of the energy industry. The company 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 the energy resources of the future, including biofuels. 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 the company's 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: changing crude-oil and natural-gas prices; changing refining, marketing and chemical margins; actions of competitors or regulators; timing of exploration expenses; timing of crude-oil liftings; 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 the Organization of Petroleum Exporting Countries; the potential liability for remedial actions or assessments 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 other pending or future litigation; the company's future acquisition or disposition of assets and gains and losses from asset dispositions or impairments; government-mandated sales, divestitures, recapitalizations, industry-specific taxes, changes in fiscal terms or restrictions on scope of company operations; foreign-currency movements compared with the U.S. dollar; 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" on pages 30 through 32 in the 2009 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 "natural gas resources," "resources," "potentially 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.
Updated: May 2010