The Chevron Corp. combined its mergers with the Hess Corp. and PDC Energy with its start-up of the Anchor Project 140 miles off the Louisiana Coast in the Gulf of Mexico to increase its worldwide production by 7 percent from 2023 and set a third-quarter record.
Chairman-Chief Executive Officer Michael K. Wirth said beginning water injection to boost production at the Jack-St. Malo and Tahiti fields there will join additional project start-ups through 2025 and grow Gulf of Mexico production to 300,000 barrels per day by 2026.
The company is moving its headquarters from San Ramon, Calif., to Houston by the end of the year.
“We expanded our CO2 storage portfolio, adding over 2 million acres offshore from Western Australia, and we recently announced several asset sales as part of our ongoing portfolio optimization efforts,” Wirth said. “This quarter marked the one-year anniversary of the PDC Energy acquisition.
“We have successfully combined PDC and Hess, taking best practices from both companies and applying them across our shale and tight portfolio. We’ve exceeded our guidance of $500 million in combined capital and cost synergies by more than 30 percent and have delivered more than $1 billion in incremental free cash flow since acquiring PDC.”
Wirth said Chevron’s well performance is 40 percent better than the DJ Basin average and it continues to optimize development plans.
“We have advantaged inventory with around 75 percent locations at a break-even below $50 per barrel,” he said. “We expect to hold production at a plateau around 400,000 barrels of oil equivalent per day through the end of the decade.”
The DJ Basin is in northeastern Colorado and southeastern Wyoming.
Eimear Bonner, Chevron’s chief financial officer, said the company had third quarter earnings of $4.5 billion or $2.48 per share.
“Adjusted earnings were $4.5 billion or $2.51 per share,” Bonner said. “The organic capital expenditures were $4 billion for the quarter in line with our budget.
“Our balance sheet remains one of the strongest in the industry, ending the quarter with a net debt ratio under 12 percent. Cash flow in the third quarter was the highest for the year despite lower oil prices.”
Bonner said Chevron’s working capital decreased by $1.4 billion on lower inventory levels and its share repurchases were a record $4.7 billion at the top end of its quarterly guidance range.
“Our financial priorities are unchanged and we plan to use our strong balance sheet to reward shareholders consistently through commodity cycles,” he said. “Compared with last quarter, adjusted earnings were down about $150 million.
“Adjusted upstream earnings were down mainly due to lower liquids realizations and high depreciation, depletion and amortization at Tengizchevroil and partly offset by higher listings. Adjusted downstream earnings increased primarily due to favorable timing effects and higher U.S. volumes partially offset by lower U.S. refining margins.”
Tengizchevroil is a project that Chevron owns 50 percent of in Kazakhstan.
Bonner said the company’s adjusted third-quarter earnings were down $1.2 billion versus the same quarter last year.
