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Chevron Fourth Quarter, Full Year 2022 Results

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   |    Thursday,March 09,2023

Chevron Corp. reported its fourth quarter and full year 2022 results.

Chevron reported earnings of $6.4 billion ($3.33 per share - diluted) for fourth quarter 2022, compared with $5.1 billion ($2.63 per share - diluted) in fourth quarter 2021. Included in the current quarter were $1.1 billion of international upstream write-off and impairment charges, and pension settlement costs of $17 million. Foreign currency effects decreased earnings by $405 million. Adjusted earnings of $7.9 billion ($4.09 per share - diluted) in fourth quarter 2022 compared to adjusted earnings of $4.9 billion ($2.56 per share - diluted) in fourth quarter 2021.

Chevron reported full-year 2022 earnings of $35.5 billion ($18.28 per share - diluted), compared with $15.6 billion ($8.14 per share - diluted) in 2021. Adjusted earnings of $36.5 billion ($18.83 per share - diluted) in 2022 compared to adjusted earnings of $15.6 billion ($8.13 per share - diluted) in 2021. For a reconciliation of adjusted earnings, see Attachment 6.

Sales and other operating revenues in fourth quarter 2022 were $55 billion, compared to $46 billion in the year-ago period.

CEO Mike Wirth commented: "We delivered record earnings and cash flow in 2022, while increasing investments and growing U.S. production to a company record.  The company's investments increased by more than 75 percent from 2021, and annual U.S. production increased to 1.2 million barrels of oil equivalent per day, led by 16 percent growth in Permian Basin unconventional production.

"Again in 2022, we delivered on our financial priorities: returning cash to shareholders, investing capital efficiently, and paying down debt," Wirth continued.

Highlights:

• Increased quarterly dividend per share by 6 percent from prior year, paying out $11.0 billion to shareholders.
• Achieved return on capital employed of more than 20 percent, the highest since 2011.
• Strengthened its industry-leading balance sheet further with debt ratio of 12.8 percent and net debt ratio of 3.3 percent.
• Returned an additional $11.25 billion to shareholders, repurchasing nearly 70 million shares, ending the year at an annual repurchase rate of $15 billion.

"We're also investing to grow both traditional and new energy supplies to meet increasing demand for affordable, reliable, and ever-cleaner energy," Wirth added.

Other 2022 Highlights:

• Advanced the Future Growth Project in Kazakhstan, with construction largely complete at the company's 50 percent owned affiliate, Tengizchevroil LLP.
• Reached final investment decision on major integrated polymer projects in Texas and Qatar at the company's 50 percent owned affiliate, Chevron Phillips Chemical Company LLC.
• Approved the Ballymore project in the deepwater U.S. Gulf of Mexico with design capacity of 75,000 barrels of crude oil per day.
• Approved a project to expand the Tamar gas facility in offshore Israel.
• Commenced a project to increase light crude oil processing capacity by 15 percent at the Pasadena, Texas refinery.
• Announced a significant new gas discovery at the Nargis block offshore Egypt in the eastern Mediterranean Sea.
• Acquired Renewable Energy Group, Inc., becoming the second largest producer of bio-based diesels in the United States.
• Formed a joint venture with Bunge North America, Inc. to develop renewable fuel feedstocks.
• Advanced multiple carbon capture opportunities, including the Bayou Bend carbon storage project in the U.S. Gulf Coast, and received permits to assess carbon storage offshore Australia.

In 2022, Chevron also added 1.1 billion barrels of net oil-equivalent proved reserves. These additions, which are subject to final reviews, equate to approximately 97 percent of net oil equivalent production for the year. The largest net additions were from assets in the Permian Basin, Israel, Canada and the Gulf of Mexico. The largest net reductions were from assets in Kazakhstan, primarily due to higher prices and their negative effect on reserves. The company will provide additional details relating to 2022 reserves in its Annual Report on Form 10-K scheduled to be filed with the SEC on February 23, 2023.

Earlier this week, the company raised its quarterly dividend per share an additional 6 percent, to $1.51 per share, putting the company on track to increase its annual per share dividend for the 36th straight year. In addition, the company's board also approved a new $75 billion share repurchase program.

"We are well positioned to lead in both traditional and new energy businesses, while delivering higher returns, lower carbon and superior shareholder value," Wirth concluded.

Upstream

Worldwide net oil-equivalent production was 3.01 million barrels per day in fourth quarter 2022 and 3.00 million barrels per day for the full-year 2022. Both quarterly and annual production were down 3 percent compared to their respective 2021 periods. International production decreased 7 percent in 2022 primarily due to the end of concessions in Thailand and Indonesia, while U.S. production increased 4 percent compared to 2021, mainly in the Permian Basin.

U.S. upstream operations earned $2.62 billion in fourth quarter 2022, compared with $2.97 billion a year earlier. The decrease was primarily due to the absence of fourth quarter 2021 asset sale gains, partially offset by higher realizations.

The company's average sales price per barrel of crude oil and natural gas liquids was $66 in fourth quarter 2022, up from $63 a year earlier. The average sales price of natural gas was $4.94 per thousand cubic feet in fourth quarter 2022, up from $4.78 in last year's fourth quarter.

Net oil-equivalent production of 1.19 million barrels per day in fourth quarter 2022 was down slightly from a year earlier as decreases in the Gulf of Mexico were partially offset by increases in the Permian Basin. The net liquids component of oil-equivalent production in fourth quarter 2022 decreased 4 percent to 895,000 barrels per day, and net natural gas production increased 4 percent to 1.79 billion cubic feet per day, compared to last year's fourth quarter.

International upstream operations earned $2.87 billion in fourth quarter 2022, compared with $2.19 billion a year ago. The increase in earnings was primarily due to higher realizations, partially offset by write-off and impairment charges, and an unfavorable foreign exchange impact of $74 million compared to last year's fourth quarter.

The average sales price for crude oil and natural gas liquids in fourth quarter 2022 was $78 per barrel, up from $74 a year earlier. The average sales price of natural gas was $10.35 per thousand cubic feet in the fourth quarter, up from $7.90 in last year's fourth quarter.

Net oil-equivalent production of 1.82 million barrels per day in fourth quarter 2022 was down 82,000 barrels per day from fourth quarter 2021. The decrease was primarily due to the absence of production following expiration of the Erawan concession in Thailand. The net liquids component of oil-equivalent production decreased 5 percent to 852,000 barrels per day in fourth quarter 2022, while net natural gas production decreased 4 percent to 5.80 billion cubic feet per day compared to last year's fourth quarter.

Downstream

U.S. downstream operations reported earnings of $1.18 billion in fourth quarter 2022, compared with earnings of $660 million a year earlier. The increase was mainly due to higher margins on refined product sales, partially offset by lower earnings from the 50 percent-owned Chevron Phillips Chemical Company.

Refinery crude oil input in fourth quarter 2022 increased slightly to 888,000 barrels per day from the year-ago period.

Refined product sales of 1.24 million barrels per day were up 7 percent from the year-ago period, mainly due to higher renewable fuel sales following the Renewable Energy Group, Inc. acquisition and higher jet fuel demand.

International downstream operations reported earnings of $591 million in fourth quarter 2022, compared with $100 million a year earlier. The increase was mainly due to higher margins on refined product sales, partially offset by an unfavorable swing in foreign currency effects of $114 million compared to last year's fourth quarter.

Refinery crude oil input of 653,000 barrels per day in fourth quarter 2022 increased 8 percent from the year-ago period as refinery runs increased due to higher demand.

Refined product sales of 1.44 million barrels per day in fourth quarter 2022 increased 9 percent from the year-ago period, mainly due to higher jet fuel demand as restrictions from the pandemic continue to ease.

All Other consists of worldwide cash management and debt financing activities, corporate administrative functions, insurance operations, real estate activities and technology companies.

Net charges in fourth quarter 2022 were $903 million, compared to $860 million a year earlier. The increase in net charges between periods was mainly due to the absence of fourth quarter 2021 favorable tax items and unfavorable foreign currency effects of $177 million, partially offset by the absence of losses on early retirement of debt in the year-ago period.

Cash Flow

Cash flow from operations in 2022 was $49.6 billion, compared with $29.2 billion in 2021. Excluding working capital effects, cash flow from operations in 2022 was $47.5 billion, compared with $30.5 billion in 2021.

Expenditures

Capital and exploratory expenditures for the company's consolidated entities (C&E) in 2022 were $12.3 billion, compared with $8.6 billion in 2021. Additionally, the company's share of equity affiliate capital and exploratory expenditures (Affiliate C&E) was $3.4 billion in 2022 and $3.2 billion in 2021 and did not require cash outlays by the company. C&E for 2022 includes $1.3 billion of inorganic spend largely associated with the formation of the Bunge joint venture and acquisition of the remaining interest in Beyond6. The acquisition of Renewable Energy Group, Inc. is not included in the company's C&E.

2024 Development Plan

Category	2023	2024 Est. Initial	Updated 2024 Guidance	%Difference (2023 vs 2024)
Total Capital Expenditure($mm)

Production Daily Equivalent(boe/d)

 Click here for More Planned 2024 Activity