Chevron Reaffirms 2017 Production Target, Highlights Future Growth
- Upstream major capital projects remain on track, active exploration program continues
- Downstream completes three-year restructuring plan, focus turns to targeted growth in petrochemicals and lubricants
- Financial strength supports investment program and shareholder distributions
NEW YORK, N.Y., March 12, 2013 – Chevron Corporation (NYSE: CVX) executives said today at the company's annual security analyst meeting in New York that the company is continuing to deliver industry-leading operational and financial results and progressing key development projects.
"We had another outstanding year in 2012. We continue to lead the industry in total shareholder returns and most other safety and financial performance metrics," said John Watson, Chevron's chairman and CEO. Watson added, "Our key development projects remain on track, and we are well positioned to deliver our 2017 target of 3.3 million barrels of oil-equivalent production first announced three years ago. In addition, our project queue is gaining momentum to deliver growth beyond 2017."
George Kirkland, vice chairman and executive vice president, Upstream, highlighted Chevron's industry-leading upstream results, which include top rankings on earnings per barrel, cash margin per barrel and return on capital employed. The company also highlighted the strong performance of Chevron's current producing base, where a consistent focus on reliability, operating efficiency and targeted investments has reduced natural field decline rates. He also noted ample investment opportunities and the ability to expand shale and tight reservoir operations, particularly in North America's Permian and Marcellus basins.
Kirkland reviewed progress on key growth projects under construction. "We are advancing our project queue as planned. Construction on our Australian LNG projects, Gorgon and Wheatstone, is progressing very well, with first LNG for Gorgon targeted for early 2015. Construction continues on the Jack/St. Malo and Big Foot deepwater projects in the U.S. Gulf of Mexico, both of which are scheduled for start-up in 2014." He highlighted encouraging results from recent, new technology applications designed to improve recoveries and reduce costs for deepwater developments. Finally, Kirkland commented on favorable project returns, noting, "The projects we are bringing on line over the next five years have very sound economics and potential to increase our cash margins."
As part of the upstream discussion, Jay Johnson, president, Chevron Europe, Eurasia and Middle East Exploration and Production, focused on Chevron's queue of projects and exploration opportunities aimed to deliver additional long-term production growth. "Our growth opportunities include multiple frontier exploration plays and developing existing resources, most notably Tengiz operations in Kazakhstan, Wafra steamflood operations in the Partitioned Zone, and Australian and Canadian LNG. We're well positioned for growth beyond 2017," Johnson said.
Mike Wirth, executive vice president, Downstream and Chemicals, summarized the results of Chevron's multiyear plan to improve earnings in refining and marketing. "Our restructuring efforts are complete. We've sold under-performing or non-strategic assets, simplified our operations and reduced costs. Returns have increased 10 percent as a direct function of the improvements we've captured." Wirth added, "We will maintain a focused and competitive portfolio, and selectively pursue growth in petrochemicals and lubricants."
Pat Yarrington, vice president and chief financial officer, highlighted Chevron's financial performance and consistent financial priorities. Yarrington noted the company's history of investing for growth while significantly increasing the dividend, repurchasing shares and strengthening the balance sheet. "Over the next five years, operating cash flows should grow significantly, as new production comes online. We intend to continue our cash distribution policies," Yarrington said.
Presentations delivered by Watson, Kirkland, Wirth, Yarrington and Johnson are available on the Investor Relations website at www.chevron.com.
Chevron is one of the world's leading integrated energy companies, with subsidiaries that conduct business worldwide. The company is involved in virtually every facet of the energy industry. Chevron explores for, produces and transports crude oil and natural gas; refines, markets and distributes transportation fuels and lubricants; 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 and growth targets 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," "forecasts," "projects," "believes," "seeks," "schedules," "estimates," "budgets,""outlook" 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, many 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 presentation. 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 startup of planned projects; the potential disruption or interruption of the company's 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 required by 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 28 through 30 of the company's 2012 Annual Report on Form 10-K. In addition, such results could be affected by general domestic and international economic and political conditions. Other unpredictable or unknown factors not discussed in this presentation could also have material adverse effects on forward-looking statements.
Published: March 2013