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September 2017 Investor Presentation – Chevron Corp

Chevron Corp · Sep 22, 2017 · 51 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. September 2017 Investor Presentation – Chevron Corp – slide 1
    Chevron 2017 Investor presentation September 2017 2017 Chevron Corporation
  2. September 2017 Investor Presentation – Chevron Corp – slide 2
    Key messages Cash flow after dividends1 (including asset sales) billions 1.0 Growing free cash flow (3.1) Focused on (4.8) improving returns (7.8) Realizing value from (8.8) advantaged portfolio 1H15 2H15 1H16 2H16…
  3. September 2017 Investor Presentation – Chevron Corp – slide 3
    Operational excellence Days away from work rate Indexed Tier 1 and Tier 2 Loss of Containment Basis: 2012 = 100 0.10 100 80 0.05 Industry 60 leading 40 1 1 1 performance 20 1 1 2012 2013 2014 2015 2016 2012 2013…
  4. September 2017 Investor Presentation – Chevron Corp – slide 4
    2Q17 YTD financial highlights Earnings 4.1 billion Earnings excluding special items and FX* 4.0 billion Cash flow from operations / excluding working capital 8.9 billion / 10.1 billion Debt ratio (as of 6/30/2017) 22.7%…
  5. September 2017 Investor Presentation – Chevron Corp – slide 5
    Cash margin per barrel Upstream cash margin per barrel1 Downstream cash margin per barrel2 per BOE per BBL 50 6 1 40 1 1 4 30 2 4 1 20 1 2 5 10 2013 2014 2015 2016 2013 2014 2015 2016 CVX ranking relative to…
  6. September 2017 Investor Presentation – Chevron Corp – slide 6
    Financial priorities remain unchanged Maintain and 29 consecutive years of annual dividend payout growth grow dividend 10-year compound annual growth rate at 8% Fund capital program Expected C&E range of 17-22 billion for future…
  7. September 2017 Investor Presentation – Chevron Corp – slide 7
    2017 cash flow balancing Cash flow after dividends1 (including asset sales) billions 5 Price Higher upstream 2017 upside 50/bbl margins and volumes 0 Asset sales / other Absence of TCO loan Absence of TCO Loan Lower and…
  8. September 2017 Investor Presentation – Chevron Corp – slide 8
    Free cash flow going forward Cash flow after dividends1 (including asset sales) billions 14 12 10 Free cash flow 70/bbl range increase at 50/bbl 8 6 Asset sales 60/bbl Peer leading FCF range 4 growth oil price…
  9. September 2017 Investor Presentation – Chevron Corp – slide 9
    Production outlook1 Projected net production MMBOED 4-9% production growth in 2017 without asset sales2 Growth Major capital projects 3.0 Shale and tight Uncertainties / timing Divestments Price effects 2.59 Status of PZ…
  10. September 2017 Investor Presentation – Chevron Corp – slide 10
    Worldwide net oil & gas production MBOED 4-9% Current estimated impact of Y-O-Y growth without 2017 asset sales 2017 asset sales in 2017 guidance range* 2575 MBOED 2,800 No impact on 2Q YTD production due to 2017 asset sales…
  11. September 2017 Investor Presentation – Chevron Corp – slide 11
    Growing upstream operating cash margin Projected operating cash margin* per BOE 30 New barrels 70/bbl accretive 60/bbl Divestment of 20 lower margin barrels 50/bbl Continuous 50/bbl 50/bbl improvement in 10 cost structure…
  12. September 2017 Investor Presentation – Chevron Corp – slide 12
    C&E program Total capital & exploratory billions 45 40 35 Sustained low spend 30 through 2020 25 17-22 19.8 20 15 At flat 50/bbl, spend 10 near bottom of range 5 2014 2015 2016 2017 20182020 budget guidance…
  13. September 2017 Investor Presentation – Chevron Corp – slide 13
    C&E reprioritization & optimization Percentage of total capital & exploratory 100 Exploration / other 75% of 2017 spend TCO FGP / WPMP 75 generates cash Gorgon / Wheatstone within two years CPChem cracker 50 Other 2017 / 2018…
  14. September 2017 Investor Presentation – Chevron Corp – slide 14
    Spend reductions Total capital & exploratory OPEX and SG&A Quarterly 2Q 2017 YTD C&E Quarterly billions 56% below 2014 average billions 12 Total C&E 8.9B 8 Cash C&E 6.8B 10 7 2017 full year forecast C&E 19B 8 6 6 2Q 2017 YTD…
  15. September 2017 Investor Presentation – Chevron Corp – slide 15
    Asset sales program Proceeds billions (before-tax) 2Q 2017: 0.4 billion Target 5-10 10 In public domain Bangladesh* Within 20162017 Canada downstream* target range South Africa* South Natuna* Trinidad and Tobago* 5…
  16. September 2017 Investor Presentation – Chevron Corp – slide 16
    Balance sheet strength Debt ratio Percent 55 50 45 Differentiated strong 2016 40 competitor balance sheet 35 average1 32.0% 30 25 24.1% Expected 20 20%-25% range 15 10 through 20202 5 1980 1984 1988 1992 1996 2000…
  17. September 2017 Investor Presentation – Chevron Corp – slide 17
    Appendix 2017 Chevron Corporation 18
  18. September 2017 Investor Presentation – Chevron Corp – slide 18
    Appendix: reconciliation of non-GAAP measures Reported earnings to earnings excluding special items and FX 2Q16 3Q16 4Q16 1Q17 2Q17 Reported earnings (MM) Upstream (2,462) 454 930 1,517 853 Downstream 1,278 1,065 357 926 1,195 All…
  19. September 2017 Investor Presentation – Chevron Corp – slide 19
    Appendix: reconciliation of non-GAAP measures Cash flow after dividends including asset sales1 MM 4Q14 1Q15 2Q15 3Q15 4Q15 Full Year 1Q16 2Q16 3Q16 4Q16 Full Year 1Q17 2Q17 2015 2016 Cash and cash equivalents 12,785 12,675 12,156…
  20. September 2017 Investor Presentation – Chevron Corp – slide 20
    Supply and demand Changes to liquids supply & demand 2015-2025 Million barrels per day Short-term oil markets New OPEC or non-OPEC supply on path to rebalancing sources required to offset decline and meet demand growth with new…
  21. September 2017 Investor Presentation – Chevron Corp – slide 21
    Oil & gas remain key energy sources Global energy demand 50% of 0.7% Million barrels of oil equivalent per day global energy growth rate Oil & gas Oil demand 350 consumption to 2035 2015-2035 300 Growth rate Asia-Pacific of 2.0%…
  22. September 2017 Investor Presentation – Chevron Corp – slide 22
    Pre-FID and US L48 future drilling production by breakeven in 2025 Source: Wood Mackenzie Oil Supply Tool, point forward breakevens weighted by 2025 liquids production, 15% discount rate. H1 2017 dataset 2017 Chevron Corporation…
  23. September 2017 Investor Presentation – Chevron Corp – slide 23
    Lower 48 onshore oil outlook Source: Wood Mackenzie 2017 Chevron Corporation 24
  24. September 2017 Investor Presentation – Chevron Corp – slide 24
    Upstream 2017 Chevron Corporation
  25. September 2017 Investor Presentation – Chevron Corp – slide 25
    Focusing on returns Expanding cash and earnings margins Effectively allocating capital High-grading the portfolio Image: Sonam platforms 2017 Chevron Corporation 26
  26. September 2017 Investor Presentation – Chevron Corp – slide 26
    Improving upstream performance Increasing cash inflows Decreasing cash outflows Net production Upstream capital & exploratory MMBOED billions 4-9% growth Increasing 40 production with 30 20 2.6 higher cash 10 2016 2017 2018…
  27. September 2017 Investor Presentation – Chevron Corp – slide 27
    Resources to production Resources1 Execution 10-year resource replenishment: 171% Increasing engineering maturity at FID BBOE 80 26.1 67.8 Strengthening design assurance 61.0 40 (9.6) (9.7) Optimizing contracting strategy…
  28. September 2017 Investor Presentation – Chevron Corp – slide 28
    Diverse portfolio Maturity Resources New infrastructure Base business Geography Asset class 68 BBOE of 6P resource1 TCO LNG Heavy oil Permian Deepwater Shale & tight Gorgon Conventional Wheatstone Legacy…
  29. September 2017 Investor Presentation – Chevron Corp – slide 29
    Gorgon1 Strong performance (100% share) Focus areas moving forward 2Q 2017 average production 333 MBOED Building reliability Current production 430 MBOED Fine tuning the process All LNG trains have achieved or exceeded…
  30. September 2017 Investor Presentation – Chevron Corp – slide 30
    Wheatstone1 Train 1 Train 2 Platform operational Construction on plan Trunkline fully pressurized Start-up 68 months after Train 1 Early well results encouraging Plant starting-up 1 As of July 28, 2017 2017 Chevron…
  31. September 2017 Investor Presentation – Chevron Corp – slide 31
    Australian gas position Carnarvon Basin Long-term cash generator North West Shelf Project Optimization and debottlenecking Gorgon of our 15.8 MMTPA capacity Project Wheatstone Project Monetize 50 TCF* resource through…
  32. September 2017 Investor Presentation – Chevron Corp – slide 32
    Tengiz Base business FGP / WPMP1,2 Record production in 2016 Module fabrication in progress Outstanding reliability Dredging essentially complete Strong earnings and cash generation Port on track for operation Exceptional…
  33. September 2017 Investor Presentation – Chevron Corp – slide 33
    Quality Permian acreage position Chevron acreage Chevron operated development Chevron non-operated development Updated acreage by NPV* (as of 2Q 2017) 50k / acre…
  34. September 2017 Investor Presentation – Chevron Corp – slide 34
    Strategy of capital efficiency Delaware Basin 2nd Bone Spring1 Improving performance Average 6 month cumulative production (BOE/ft) 40 BOE/ft6months through technology 30 20 Seismic attribute assessment 10 0…
  35. September 2017 Investor Presentation – Chevron Corp – slide 35
    Permian unconventional financial performance Projected CVX unconventional Permian Competitive development and direct lease financial metrics operating costs1 /BOE /BOE 25 DD&A Lease operating expense 20 1H172 2020 1H172 2020…
  36. September 2017 Investor Presentation – Chevron Corp – slide 36
    Active portfolio management to further unlock value Midland and Delaware Basin transaction activity1 Thousand acres 120 Identified 150,000200,000 acres 100 to transact in 2017 / 2018 80 60 Closed 7 deals 2Q 2017 YTD 40 20…
  37. September 2017 Investor Presentation – Chevron Corp – slide 37
    Permian support R O O S E VE LT Cushing CH AV ES COCHRAN HOCKLEY LUBBOCK CROSBY DICKENS Supply Chain YOAKUM TERRY LY N N GARZA KENT EDDY LEA Leveraging global scale Midland D AW S ON BORD EN SCU RRY Staggered…
  38. September 2017 Investor Presentation – Chevron Corp – slide 38
    Permian production Midland and Delaware Basin1 Net MBOED 500 450 Exceeding expectations 400 20-35% CAGR 350 300 33% annual production growth2 250 200 150 13 company operated rigs3 100 50 0 7 JV net rigs3 2015 2016 2017…
  39. September 2017 Investor Presentation – Chevron Corp – slide 39
    Portfolio strength underpinned by base assets 2017 base plus shale declines 2% 2020 base* plus shale grows 1% Lower risk, short-cycle investments Diverse opportunities with new base assets Image: Kern River Field *Includes…
  40. September 2017 Investor Presentation – Chevron Corp – slide 40
    Resources for the future Norway Barents Liard/ Horn River AOSP Low holding cost Tengiz Marcellus Partitioned Midland & GOM DW Zone Options across Delaware Basins Mexico DW Venezuela Thailand geographies and five Nigeria…
  41. September 2017 Investor Presentation – Chevron Corp – slide 41
    Downstream & Chemicals 2017 Chevron Corporation
  42. September 2017 Investor Presentation – Chevron Corp – slide 42
    Downstream portfolio Fuels refining & marketing Lubricants & additives Petrochemicals Integrated value chains Globally positioned Advantaged feed and scale Steady growth, strong margins Low capital, high return Consistent cash…
  43. September 2017 Investor Presentation – Chevron Corp – slide 43
    Strategy focused on leading returns Grow earnings across the value chain and make targeted investments to lead the industry in returns World-class operational excellence Drive earnings across the feedstock-to-customer value…
  44. September 2017 Investor Presentation – Chevron Corp – slide 44
    Fuels supply and demand Global products demand growth Refinery net capacity additions Compound annual growth rate MMBD 6 Compound annual growth rate LPG/Naphtha 1.0% 0.8% 4 Distillate Gasoline 2 Fuel Oil -3% 0% 3%…
  45. September 2017 Investor Presentation – Chevron Corp – slide 45
    Value chains US West Coast US Gulf Coast Asia Pacific Anchor markets: Anchor markets: Anchor markets: 1 brand share in Western U.S Strong Gulf Coast / SE market position Asia growth markets Latin America integration Leading brand in…
  46. September 2017 Investor Presentation – Chevron Corp – slide 46
    Investing to strengthen the fuels value chain Richmond Refinery Singapore Refining Co. Salt Lake Refinery Modernization Clean Mogas & Cogeneration Alkylation Retrofit Improves safety, efficiency, Increases capability to produce…
  47. September 2017 Investor Presentation – Chevron Corp – slide 47
    Chevron Phillips Chemical USGC petrochemicals project1 Overview 1,500 kMTA ethylene, Cedar Bayou, Texas 1,000 kMTA polyethylene, Old Ocean, Texas 500 kMTA HDPE, 500 kMTA LLDPE Advanced proprietary technology Progress…
  48. September 2017 Investor Presentation – Chevron Corp – slide 48
    LNG outlook 2017 Chevron Corporation
  49. September 2017 Investor Presentation – Chevron Corp – slide 49
    Global LNG outlook Supply and demand MTPA 500 Emerging market demand growth continues 400 Supply opportunity Intl. Under Construction Europe to provide swing 300 U.S. Under Pacific Basin Construction demand due to market…
  50. September 2017 Investor Presentation – Chevron Corp – slide 50
    Global LNG supply LNG supply MTPA 500 Australia leads current wave of supply growth 400 300 U.S. underpins next wave 200 Competition for 100 supply opportunities will emerge Existing supply 20172018 20192022 20232025…
  51. September 2017 Investor Presentation – Chevron Corp – slide 51
    Gorgon & Wheatstone LNG customers Term LNG contract portfolio Long term oil-linked Spot contracts Increase in portfolio volumes provides flexibility Term contract Shipping provides access to total LNG value chain Source:…

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