Chevron Reaffirms Strategies, Financial Priorities and Growth Outlook
- Long-term market fundamentals remain attractive
- Positioned for peer-leading 20 percent production growth to 2017
- Signals lower capital spend, aggressive cost management
NEW YORK, N.Y., March 10, 2015 – Chevron Corporation (NYSE: CVX) executives, at the company's annual security analyst meeting in New York, expressed confidence in the long-term energy business and highlighted its growth outlook through 2017. At the same time, company executives outlined near-term actions to address the recent decline in commodity prices.
"The fundamentals of the oil and gas business remain attractive for our company and investors, as our products are vital to a growing world economy," said John Watson, Chevron's chairman and CEO. Watson added, "We are well-positioned to manage through the recent drop in commodity prices and are taking several responsive actions, including curtailing capital spending and lowering costs."
"Over the next few years, we expect to deliver significant cash flow growth as projects currently under construction come online. Our intention is to demonstrate performance that will allow our 27-year history of successive increases in our annual dividend payout to continue," Watson added.
George Kirkland, vice chairman and executive vice president, upstream, reviewed Chevron's upstream portfolio, strategies, and historical performance, including the company's consistent exploration and resource capture success over the past decade. He also highlighted the upstream segment's superior financial performance relative to industry peers, as well as its leading competitive cost structure.
"This was the fifth consecutive year we have led the integrated peer group on earnings per barrel," Kirkland said. "Our base business is performing exceptionally well and is profitable, even in a lower-price environment. Our large, diverse resource base allows us to be very responsive to market conditions, with flexibility to select only the most attractive opportunities to move forward."
Jay Johnson, senior vice president, upstream, provided an overview of the specific actions being taken to manage capital outlays, lower costs and improve operating efficiencies, all of which will contribute to improving upstream cash flow. He also provided a comprehensive update on Chevron's deep queue of projects and other future investment opportunities, emphasizing their strong cash and value generation potential.
"We continue to make steady progress on our LNG and deepwater developments, and will continue to ramp-up production from our shale and tight assets, particularly from our very attractive Permian Basin acreage position," Johnson said. "We expect to achieve 20 percent production growth by 2017, a rate which is simply unmatched by our industry peers. More importantly, our new production is expected to have considerably higher margins than in our existing portfolio."
Pat Yarrington, vice president and chief financial officer, and Mike Wirth, executive vice president, Downstream and Chemicals, also participated during the question and answer session of the meeting, following the main presentations. Presentations and a full transcript of the meeting are available on the Investor Relations website at www.chevron.com.
CAUTIONARY STATEMENTS RELEVANT TO FORWARD-LOOKING INFORMATION FOR THE PURPOSE OF "SAFE HARBOR" PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
This press release 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," "forecasts," "projects," "believes," "seeks," "may," "could," "schedules," "estimates," "budgets," "outlook," "on schedule," "on track" 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 chemicals 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 production or manufacturing facilities or delivery/transportation networks due to war, accidents, political events, civil unrest, severe weather, other natural or human factors, 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 22 through 24 of the company's 2014 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 2015