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September 2018 Investor Presentation – Chevron Corp

Chevron Corp · Sep 6, 2018 · 66 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.

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  1. September 2018 Investor Presentation – Chevron Corp – slide 1
    Chevron 2018 Investor Presentation September 2018 2018 Chevron Corporation
  2. September 2018 Investor Presentation – Chevron Corp – slide 2
    Operational excellence leadership Days away from work rate1 Oil spills to land or water3 Thousands of barrels 0.10 40 30 0.05 Industry leading 20 1 1 1 safety and spill 10 1 1 1 2014 2015 2016 2017 performance 2014 2015 2016…
  3. September 2018 Investor Presentation – Chevron Corp – slide 3
    Macro landscape Global crude oil supply & demand1 Million barrels per day 100 Supply gap of 42 mmbd Demand in IEA NPS 80 60 Demand growth and production 40 declines lead to supply gap 20 2020 2030 2040 Global liquid…
  4. September 2018 Investor Presentation – Chevron Corp – slide 4
    2Q 2018 YTD results Cash flow Cash generation in line with guidance Capital Capital & exploratory expenditures at 9B mid-year Total production Trending to upper-end of guidance Permian production Ahead of guidance…
  5. September 2018 Investor Presentation – Chevron Corp – slide 5
    2018 cash flow excluding working capital Cash flow from operations excluding working capital* billions 8 Non-cash receivable write-down 0.3B Delivering 2018 cash Discretionary pension contribution 0.3B generation in line with…
  6. September 2018 Investor Presentation – Chevron Corp – slide 6
    Working capital Historical change in working capital1,2 billions 2 Consistent pattern 0.9 0.4 0 (0.2) (1.2) Mostly transient -2 1Q 2Q 3Q 4Q 1 Average quarterly working capital change for 2010-2017. 2 1Q2017 has…
  7. September 2018 Investor Presentation – Chevron Corp – slide 7
    2018 cash generation 2018 cash flow billions 18 16 14 Cash generation 12 of 14B 10 8 2018 cash flow 6 Dividend breakeven 50/bbl 4 Dividend without asset sales 2 2017 CF CF sensitivity 2018 2018 2018 CF after after…
  8. September 2018 Investor Presentation – Chevron Corp – slide 8
    Winning in any environment What we have What we will do What investors get Grow Be Advantaged production returns-driven Superior total portfolio and cash in capital shareholder return margins allocation Sustainable Free cash…
  9. September 2018 Investor Presentation – Chevron Corp – slide 9
    Profitable downstream & chemicals portfolio Focused portfolio Technology Integrated enabled value chains formulations TCO Advantaged Complex feed, scale and refineries with technology scale Strong brands and leading…
  10. September 2018 Investor Presentation – Chevron Corp – slide 10
    Advantaged upstream portfolio Diverse Opportunities Sustainable to high-grade TCO and long-lived San Joaquin Valley Permian Deepwater Gulf of Mexico Nigeria Gorgon Wheatstone Lower risk Low cost High margin /…
  11. September 2018 Investor Presentation – Chevron Corp – slide 11
    Sustainable portfolio Reserves to production ratio1 Resource to production ratio2,3 Years Years 18 40 Prudent and stable 15 reserves to production 30 20 Long-lived 12 resource base 10 9 2012 2013 2014 2015 2016…
  12. September 2018 Investor Presentation – Chevron Corp – slide 12
    Strong balance sheet Debt ratio1 Percent 60 55 50 45 40 BP 35 TOT 30 RDS 25 20 XOM 15 BBB A AA Credit rating2 Other companies included: APC, COP, DVN, EOG, ENI, HES, MRO, OXY, STO, SU 1 Debt ratio = ((total debt) /…
  13. September 2018 Investor Presentation – Chevron Corp – slide 13
    Disciplined C&E program Total capital & exploratory* 2018 capital & exploratory budget billions billions 45 40 18.3 35 30 25 1820 20 18.8 18.3 75% of spend 15 delivers cash 10 flow within Cash 2 years 5 C&E 12.8 2014 2015…
  14. September 2018 Investor Presentation – Chevron Corp – slide 14
    Cost reductions continue Production costs1 Corporate cost reduction /BOE from 20142 18 Percent -12 16 Cost reductions 14 continue -18 12 Technology enables increased efficiencies 10 8 2014 2015 2016 2017 2020 -24…
  15. September 2018 Investor Presentation – Chevron Corp – slide 15
    Upstream cash margin grows Projected operating Liquid % of total production2 cash margin1 Percent /BOE 28 85 Increase high margin, 75% oil-linked volume CVX oil-linked production3 70/bbl 75 24 65 Divest lower margin barrels…
  16. September 2018 Investor Presentation – Chevron Corp – slide 16
    Worldwide net oil & gas production Net production MBOED 3,000 2Q production 2,826 MBOED 4 - 7% growth* excluding the impact of 2Q production impacts: 2018 asset sales 2,900 Turnarounds (67) MBOED Asset sales (15) MBOED 2,800…
  17. September 2018 Investor Presentation – Chevron Corp – slide 17
    Production growth at low C&E Projected net production at 60/bbl MMBOED Base1 plus shale & tight 23% CAGR through 2022 with 910B capital spend/yr2 4-7% growth 5% growth 2.73 Uncertainties 2.59 Price effects Status of PZ…
  18. September 2018 Investor Presentation – Chevron Corp – slide 18
    Portfolio optimization Asset sale proceeds billions (before tax) Target 10 510 2018 YTD: 0.7 billion* Elk Hills Democratic Republic of the Congo Axis Title Public domain Southern Africa Divestments criteria remain 5…
  19. September 2018 Investor Presentation – Chevron Corp – slide 19
    Improving cash returns CFFO ROCE1 at 60/bbl Free cash flow growth3 20172020 CAGR % 20172020 Percent 40 Price 16 Portfolio upside Expanding cash margins enhancement 30 Cost & other 14 Margin & volume Lower cost structure…
  20. September 2018 Investor Presentation – Chevron Corp – slide 20
    Initiate share repurchase 3Q18 Historical total shareholder distributions billions Maintain and grow dividend 4% increase in 1Q18 9 Fund capital program Disciplined and on track 6 Strong balance sheet Average…
  21. September 2018 Investor Presentation – Chevron Corp – slide 21
    Headlines Guidance through 2020: Shale & tight resource Annual C&E 1820B Increases to 17.5 BBOE Asset sale proceeds 510B Upstream cash margin Permian unconventional: grows 12/bbl Acreage increases to Cash flow sensitivity 450…
  22. September 2018 Investor Presentation – Chevron Corp – slide 22
    Upstream 2018 Chevron Corporation
  23. September 2018 Investor Presentation – Chevron Corp – slide 23
    Advantaged portfolio Unit resource value* /BOE Diverse 5 Sustainable and long-lived 4 Low cost 3 High margin / oil-linked 2 1 Lower risk Opportunities to high-grade Competitors: BP, RDS, TOT, XOM Source: Wood…
  24. September 2018 Investor Presentation – Chevron Corp – slide 24
    Diverse upstream portfolio Geography Asset class Resources New infrastructure 69 BBOE of 6P resource* TCO San Joaquin Heavy oil LNG Valley Deepwater Gulf of Permian Mexico Deepwater Shale & tight Nigeria Gorgon…
  25. September 2018 Investor Presentation – Chevron Corp – slide 25
    Sustainable resources Reserves1 Resources2 5-year reserve replacement: 107% 10-year resource replenishment: 171% BBOE BBOE 24.5 69.0 11.3 5.4 11.7 Replacing reserves while 62.1 growing production (4.8) (0.3) (9.6) 2012…
  26. September 2018 Investor Presentation – Chevron Corp – slide 26
    Sustainable production Base and shale & tight net production1 23% CAGR Short-cycle investments Low execution & subsurface risk 910 billion annual capital spend1 2018 2019 2020 2021 2022 Shale & tight Base excluding MCPs2…
  27. September 2018 Investor Presentation – Chevron Corp – slide 27
    Growing Permian value Quality position Unconventional acreage by NPV3 2.2 million net acres1 80% no or low royalty Increased resource 20% to 11.2 BBOE2 50k /acre 800,000 Portfolio value…
  28. September 2018 Investor Presentation – Chevron Corp – slide 28
    Strong Permian performance Development & production costs1 Well performance2 /BOE Delaware Basin3 Normalized Cum. Prod. (MBOE) 30 Chevron wells Delivering competitive 20 performance Competitor wells 0 2 4 6 8 10 12…
  29. September 2018 Investor Presentation – Chevron Corp – slide 29
    Permian unconventional production Midland and Delaware Basin* Net MBOED 800 700 2Q production 270 MBOED 600 Up 92 MBOED from 2Q 2017 500 400 Operating 19 rigs 300 200 Maintaining disciplined, capital 100 efficient…
  30. September 2018 Investor Presentation – Chevron Corp – slide 30
    Industry leading Permian position Coring up acreage 80% acreage no or low royalty Enhancing value with transactions Improving capital efficiency & focus Increased average lateral length per well by 35% since 2016 2018…
  31. September 2018 Investor Presentation – Chevron Corp – slide 31
    Permian takeaway capacity Midstream business Cumulative firm transport capacity of 100% of operated + non-operated take-in-kind crude production through 2019 50 MBD in excess crude oil takeaway capacity in June Firm dock…
  32. September 2018 Investor Presentation – Chevron Corp – slide 32
    Expanding shale & tight activities Applying learnings across multiple assets Duvernay1 Vaca Muerta (Loma Campana)3 Appalachia4 EUR2 per well increased 40% EUR2 per well increased 100% EUR2 per well projected to Unit development cost…
  33. September 2018 Investor Presentation – Chevron Corp – slide 33
    Gorgon and Wheatstone Five LNG trains in operation Wheatstone Train 2 first LNG June 15 Gorgon Train 2 pit stop completed as planned Gorgon and Wheatstone combined net production: 2Q18: 282 MBOED Wheatstone 2018…
  34. September 2018 Investor Presentation – Chevron Corp – slide 34
    Developing Tengiz Base business FGP / WPMP3 Strong earnings and cash flow On track for first production in 2022 Reliability of 98%1 FGP adds 260 MBOED capacity and increases production to 1 MMBOED4 Net production grew by 17% since…
  35. September 2018 Investor Presentation – Chevron Corp – slide 35
    FGP / WPMP Progressing toward first production in 2022 Overall project 40% complete Pipe-racks and modules in transit from Kazakhstan, Korea, and Italy 6 pipe-rack modules delivered to site 3 drilling rigs in operation…
  36. September 2018 Investor Presentation – Chevron Corp – slide 36
    Active Gulf of Mexico Chevron deepwater assets Leveraging installed infrastructure Jack / St. Malo, Tahiti, Blind Faith Petronius and others Extending tie-back radius through Ballymore Blind technology Tubular Faith Shelf…
  37. September 2018 Investor Presentation – Chevron Corp – slide 37
    Improving deepwater value Efficiencies Technology Standardization Reduced completion time1 40%2 Extending subsea tie-back reach Subsea trees, equipment, Reduced unit operating cost Real-time reservoir management topsides and floating…
  38. September 2018 Investor Presentation – Chevron Corp – slide 38
    Downstream & Chemicals 2018 Chevron Corporation
  39. September 2018 Investor Presentation – Chevron Corp – slide 39
    Profitable downstream & chemicals portfolio Fuels refining & marketing Petrochemicals Lubricants & additives Focused, regional optimization Advantaged feed, scale and technology Strategic positions serving global markets Refinery…
  40. September 2018 Investor Presentation – Chevron Corp – slide 40
    Strategy focused on leading returns World-class operational excellence Grow earnings across the value chain Target investments Lead the industry in returns 2018 Chevron Corporation 41
  41. September 2018 Investor Presentation – Chevron Corp – slide 41
    Downstream financial performance Reported earnings Adjusted earnings per barrel1,3 billions /bbl 10 6 1 5 3 1 2.16 1 1 1 2 2014 2015 2016 2017 1H18 2014 2015 2016 2017 1H18 15.3% 24.8% 13.0% 14.1% 12.7% Adjusted…
  42. September 2018 Investor Presentation – Chevron Corp – slide 42
    Integrated fuels value chains U.S. West Coast U.S. Gulf Coast Asia Pacific 1 brand share in Western U.S. Leading brand in Central America Long-standing partnerships Mexico retail market entry Top net cash margin refinery World-class…
  43. September 2018 Investor Presentation – Chevron Corp – slide 43
    Major capital projects Evaluation / FEED Under construction Commission / start-up GS Caltex Richmond refinery ChevronPhillips Chemical Co. Mixed feed cracker olefins project Modernization USGC petrochemicals project ChevronPhillips…
  44. September 2018 Investor Presentation – Chevron Corp – slide 44
    Fuels marketing activities Mexico retail market entry ExtraMile c-store joint venture Asia marketing position Plan to grow by up to 350 sites JV with Jacksons Food Stores Inc. Plan to grow by up to 300 sites Developing key branded…
  45. September 2018 Investor Presentation – Chevron Corp – slide 45
    Refinery performance1 Utilization Energy efficiency Net cash margin Percent Index Index 90% 120 35 2 1 1 2 5 1 4 2 4 2 2 2 2 2 1 70% 80 2008 2010 2012 2014 2016 2017 2008 2010 2012 2014 2016 2017 2008 2010 2012 2014…
  46. September 2018 Investor Presentation – Chevron Corp – slide 46
    Petrochemicals value chains U.S. Gulf Coast Middle East Asia Advantaged feedstock Strategic partnerships enable access to GS Caltex USGC Petchem above nameplate advantaged feedstock 4th largest aromatics single site capacity…
  47. September 2018 Investor Presentation – Chevron Corp – slide 47
    Advantaged feedstock Ethylene cash costs per metric ton 1,000 Petrochemicals profitability Oil / gas price ratio continues to benefit lighter feedstocks 500 North America ethane maintains advantage over Asia naphtha…
  48. September 2018 Investor Presentation – Chevron Corp – slide 48
    Lubricants and additives Premium base oil Leading producer, global slate Finished lubricants Formulation technology expertise Strong global brands Additives Leading global supplier Premium base oil plant Equity blend plants…
  49. September 2018 Investor Presentation – Chevron Corp – slide 49
    International Maritime Organization (IMO) 2020 Expected IMO 2020 impact on Refining complexity2,3 marine transportation fuel demand1 Stricter sulfur 300 regulations in Average crude capacity mb/d January 2020 CVX XOM TOT…
  50. September 2018 Investor Presentation – Chevron Corp – slide 50
    Midstream outlook 2018 Chevron Corporation
  51. September 2018 Investor Presentation – Chevron Corp – slide 51
    Gas and LNG pricing Regional gas pricing /MMBTU 12 Gas is an increasingly Market range for global commodity 10 oil-linked LNG contract prices 8 Steady demand growth and ample supply 6 capacity Asia LNG Spot 4 2 Henry…
  52. September 2018 Investor Presentation – Chevron Corp – slide 52
    Macro landscape - LNG Global LNG supply & demand MMTPA 600 500 Supply capacity (existing & under construction) Supply Market oversupply 400 opportunity in mid-term 300 200 Pacific basin Supply gap developing next decade 100…
  53. September 2018 Investor Presentation – Chevron Corp – slide 53
    LNG supply curve LNG development costs /MMBTU 15 9/MMBTU or less Abundant lower-cost 10 delivered to Asia LNG supply Debottleneck opportunities in Australia Focus on cost 5 competitive LNG opportunities 0 100 200 300…
  54. September 2018 Investor Presentation – Chevron Corp – slide 54
    energy IQ Environmental, Social and Governance 2018 Chevron. All rights reserved.
  55. September 2018 Investor Presentation – Chevron Corp – slide 55
    Creating value responsibly Enabling Continued engagement human progress Socially and with investors environmentally and stakeholders responsible Strong governance Robust strategy and enterprise risk management Source:…
  56. September 2018 Investor Presentation – Chevron Corp – slide 56
    Oil and gas demand scenarios Oil and natural gas will account for about half of global energy consumption under almost any future market scenario IEAs world total primary energy mix Coal Coal Gas Gas Gas Coal Nuclear Nuclear…
  57. September 2018 Investor Presentation – Chevron Corp – slide 57
    Climate change resilience Actions and investments Renewable energy Our operations Investing in technology Biofuels Energy efficiency Future Energy Solar Flaring reduction Fund Initial Wind Methane management 100M Geothermal…
  58. September 2018 Investor Presentation – Chevron Corp – slide 58
    Chevron Technology Ventures In 1999, Chevron was the first IOC to form a venture capital fund, Chevron Technology Ventures, which champions the innovation, commercialization and integration into Chevron emerging technologies.…
  59. September 2018 Investor Presentation – Chevron Corp – slide 59
    Methane management Upstream methane intensity* 0.18% Founding member of the Subsea Environmental Partnership EPC services Non-engineered equipment 0.12% One of the first IOC to report Professional services voluntarily on…
  60. September 2018 Investor Presentation – Chevron Corp – slide 60
    Highly engaged, diverse board with relevant experience and expertise Board of Directors Balanced Director Tenure Michael K. Wirth Ronald D. Sugar Chairman and Chief Executive Officer Lead Director 0-3 5 Chairman and Chief Executive…
  61. September 2018 Investor Presentation – Chevron Corp – slide 61
    Board and committee risk oversight One of the many duties of the Board is to oversee Chevrons risk management policies and practices to ensure that the appropriate risk management systems are employed throughout the Company Board of…
  62. September 2018 Investor Presentation – Chevron Corp – slide 62
    Executive compensation Our objective is to attract and retain leaders who will deliver long-term stockholder value in any business environment Pay element Metrics/Purpose Majority of compensation is at risk Base Salary Fixed level…
  63. September 2018 Investor Presentation – Chevron Corp – slide 63
    Appendix: reconciliation of non-GAAP measures Cash flow from operations excluding working capital MM 1Q18 2Q18 Net Cash Provided by Operating Activities 5,043 6,855 Net Decrease (Increase) in Operating Working Capital (2,104)…
  64. September 2018 Investor Presentation – Chevron Corp – slide 64
    Appendix: reconciliation of non-GAAP measures Cash flow after capex excluding asset sales MM Full Year 2017 Net Cash Provided by Operating Activities 20,515 Net Cash Used for Investing Activities (note: includes Capital…
  65. September 2018 Investor Presentation – Chevron Corp – slide 65
    Appendix: reconciliation of Chevrons adjusted earnings TOTAL DOWNSTREAM 1H18 2017 2016 2015 2014 Reported Earnings (MM) 1,566 5,214 3,435 7,601 4,336 Adjustment Items: Asset Dispositions -- (675) (490) (1,710) (960) Other…
  66. September 2018 Investor Presentation – Chevron Corp – slide 66
    Appendix: reconciliation of Chevrons adjusted earnings TOTAL DOWNSTREAM, EXCLUDING PETROCHEMICALS 1H18 2017 2016 2015 2014 Earnings (MM) 895 4,671 2,823 6,586 3,176 Adjustment Items: Asset Dispositions -- (675) (490) (1,710)…

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