Chevron(CVX) - 2024 Q3 - Quarterly Report

Financial Performance - Net income attributable to Chevron Corporation for Q3 2024 was $4.5 billion ($2.48 per share — diluted), compared to $6.5 billion ($3.48 per share — diluted) in Q3 2023[59] - Sales and other operating revenues decreased by $2.996 billion in Q3 2024, primarily due to lower refined product and crude oil prices[86] - Income from equity affiliates decreased by$52 million in Q3 2024, mainly due to lower earnings from GS Caltex and TCO, partially offset by higher earnings from CPChem[87] - Purchased crude oil and products decreased by $1.878 billion in Q3 2024, primarily due to lower refined product and crude oil prices[89] - Operating, selling, general, and administrative expenses increased by$424 million in Q3 2024, driven by higher environmental reserve and transportation costs[90] - Exploration expenses decreased by $147 million in Q3 2024, primarily due to lower charges for well write-offs[91] - Income tax expense decreased by$190 million in Q3 2024 compared to Q3 2023, primarily due to a $2.2 billion decrease in total income before tax[97] - U.S. income before tax decreased by$1.6 billion in Q3 2024, driven by lower downstream margins and upstream realizations, resulting in a $498 million decrease in U.S. income tax expense[97] - International income before tax decreased by$616 million in Q3 2024, primarily due to unfavorable foreign currency effects and higher operating expenses, leading to a $308 million increase in international income tax expense[98] - Sales and other operating revenues for the nine months ended September 30, 2024, were$72.362 billion, compared to $100.405 billion for the year ended December 31, 2023[106] - Net income for the nine months ended September 30, 2024, was$45.620 billion, a significant increase from $12.190 billion for the year ended December 31, 2023[106] - Current assets as of September 30, 2024, were$16.467 billion, down from $19.006 billion as of December 31, 2023[107] - Net cash provided by operating activities for the nine months ended September 30, 2024, was$22.797 billion, slightly down from $23.175 billion for the same period in 2023[111] - Free cash flow for the nine months ended September 30, 2024, was$10.687 billion, compared to $11.707 billion for the same period in 2023[111] - Capital expenditures (capex) for the nine months ended September 30, 2024, were$12.110 billion, up from $11.468 billion for the same period in 2023[111] - The company's net debt ratio as of September 30, 2024, was 11.9$4.6 billion, down from $5.8 billion in Q3 2023, primarily due to unfavorable foreign currency and tax effects, and lower realizations[59] - Chevron's upstream earnings are closely tied to crude oil and natural gas prices, which are influenced by global economic conditions, OPEC+ actions, and regional supply disruptions[65] - Tengizchevroil LLP (TCO) achieved start-up of the Wellhead Pressure Management Project (WPMP) in April 2024, with all four pressure boost facility compressors online by September 2024 and 14 metering stations converted to low pressure[67] - Chevron's worldwide net oil-equivalent production averaged 3.33 million barrels per day in the first nine months of 2024, a 10$83 per barrel in the first nine months of 2024, compared to $82 per barrel in the same period in 2023, while WTI crude oil averaged$78 per barrel, up from $77 per barrel in 2023[68] - U.S. Henry Hub natural gas prices averaged$2.20 per MCF in the first nine months of 2024, down from $2.49 per MCF in 2023, with third-quarter 2024 prices averaging$2.12 per MCF[68] - Chevron's U.S. upstream earnings increased by $687 million in the first nine months of 2024, driven by higher sales volumes of$2.2 billion, partially offset by higher depreciation, depletion, and amortization of $1.1 billion[75] - International upstream earnings decreased by$2.2 billion in the first nine months of 2024, primarily due to an unfavorable swing in tax effects of $800 million and lower sales volumes of$560 million[77] - U.S. net oil-equivalent production increased to 1,605 MBOED in Q3 2024, up from 1,407 MBOED in Q3 2023[101] - International net oil-equivalent production remained stable at 1,759 MBOED in Q3 2024 compared to 1,739 MBOED in Q3 2023[101] Downstream Operations - Downstream earnings in Q3 2024 were $595 million, a significant decrease from$1.7 billion in Q3 2023, mainly due to lower margins on refined product sales[59] - U.S. downstream earnings decreased by $1.2 billion in Q3 2024 due to lower margins on refined product sales, partially offset by$180 million higher earnings from CPChem[78] - Refinery crude unit inputs increased by 15,000 barrels per day (2%) in Q3 2024, driven by the absence of planned turnaround at the Richmond refinery[78] - Refined product sales increased by 9,000 barrels per day (1%) in Q3 2024[78] - International downstream earnings increased by $142 million in Q3 2024, driven by higher margins on refined product sales, despite unfavorable foreign currency effects of$79 million[81] - Refined product sales in international markets increased by 76,000 barrels per day (5%) in Q3 2024, driven by higher demand for gasoline and jet fuel[81] - Total refined product sales in the U.S. increased to 1,312 MBD in Q3 2024, up from 1,303 MBD in Q3 2023[101] Asset Sales and Portfolio Optimization - Chevron plans to target $10-15 billion in asset sales over the 5-year period ending in 2028[65] - Chevron announced the sale of its 20$6.5 billion before taxes, expected to close in Q4 2024[65] - Chevron aims to achieve $2-3 billion in structural cost reductions by the end of 2026 through portfolio optimization and technology leverage[65] - Chevron announced a$6.5 billion sale of its interest in the Athabasca Oil Sands Project and Duvernay shale assets, expected to close in the fourth quarter of 2024[71] Strategic Initiatives and Investments - Chevron supports the Paris Agreement and is working to lower the carbon intensity of its operations while growing lower carbon businesses in renewable fuels, carbon capture, and hydrogen[61] - The company started production at the Anchor project in the Gulf of Mexico, marking the successful delivery of an industry-first high-pressure deepwater technology[71] - Chevron cleared the Federal Trade Commission antitrust review for its pending merger with Hess Corporation, satisfying a key closing condition for the transaction[71] - Capital expenditures increased by $642 million to$12.1 billion in the first nine months of 2024, driven by higher upstream investments[103] Shareholder Returns and Debt Management - The company paid $8.9 billion in dividends to common stockholders during the first nine months of 2024[103] - The company repurchased 32.2 million shares for$4.7 billion in Q3 2024, with total repurchases under the 2023 Program reaching 141.4 million shares for $21.9 billion[107] - Total debt and finance lease liabilities increased to$25.8 billion at September 30, 2024, up from $20.8 billion at December 31, 2023[103] - Cash, cash equivalents, and marketable securities totaled$4.7 billion at September 30, 2024, down from $8.2 billion at year-end 2023[103] Tax and Regulatory Matters - The company's effective tax rate can fluctuate significantly due to earnings volatility and the mix of higher or lower tax rate jurisdictions[63] - The company will pay$550 million to the City of Richmond over ten years as part of a new tax agreement effective July 1, 2025[68] Supply Chain and Inflation Management - Chevron is actively managing supply chain and inflation impacts through fixed price and index-based contracts, and partnerships with suppliers for demand planning[63]