Chevron Corporation (NYSE:CVX) is one of the stocks that was on Jim Cramer’s radar recently. A caller asked if they should take profits or wait for the stock to go up more. Cramer replied: I think it can go up a lot. I think that Chevron has the 3.85 yield. They’ve always been a big believer in that, in making that dividend big. Mike Wirth’s doing really well. I would hold on to that. Photo by Luis Ramirez on Unsplash Chevron Corporation (NYSE:CVX) is an integrated energy company that explores, produc ...

Core Viewpoint - Iraq's West Qurna 2 oilfield is set to nearly double its output to 800,000 barrels per day (bpd) as Chevron enters exclusive negotiations to take over operations from Lukoil, enhancing Iraq's oil production capacity and aligning it more closely with Western energy interests [1]. Group 1: Chevron's Involvement - Chevron has secured one-year exclusive rights to negotiate the takeover of West Qurna 2, which could increase output to between 750,000 and 800,000 bpd [1]. - The deal would significantly expand Chevron's operations in Iraq, giving it control of one of the world's largest oilfields, which contributes nearly 10% of Iraq's production and about 0.5% of global supply [1]. Group 2: Iraq's Oil Production Goals - Iraq aims to boost its oil production capacity to over 6 million bpd by 2029, having frequently produced above its OPEC+ targets [1]. - The agreement with Chevron is part of a broader strategy to attract international oil majors, following similar agreements with Exxon, BP, and TotalEnergies, by offering more favorable terms [1]. Group 3: Geopolitical Implications - The Chevron deal may strengthen relations between Baghdad and Washington, especially as it replaces a sanctioned Russian firm, Lukoil, amid ongoing geopolitical tensions related to the war in Ukraine [1]. - Iraq's previous operator, Lukoil, faced sanctions that led to its removal from the West Qurna 2 project, with the field temporarily managed by the state-run Basra Oil Company [1].

Core Viewpoint - The current market dynamics suggest a strong economic recovery theme, with significant spending expected in the hyperscaler sector, amounting to $650 billion this year, indicating ongoing competition among major companies [1][3]. Group 1: Sector Preferences - There is a favorable outlook on industrials, utilities, and financials, with a belief that these sectors present good investment opportunities due to their current valuations not being overly priced [5]. - The financial sector is particularly highlighted, with regional banks performing well, driven by factors such as tax refunds and deregulation [6][8]. - A preference for consumer staples over consumer discretionary is noted, reflecting a cautious market sentiment, although the overall stance on staples is unfavorable [10][11]. Group 2: Economic Trends and Risks - The economic recovery theme is expected to be well entrenched, suggesting that the market has not fully recognized the potential for stronger growth this year [3]. - Concerns about job losses due to AI and potential economic recession are deemed overblown, with a belief that the market's fears are exaggerated [10][12]. - The recent decline in financial stocks is viewed as a reset rather than a sign of deeper trouble, maintaining a positive outlook on the sector [7][8].

Financial Data and Key Metrics Changes - In Q4 2025, the company reported an Adjusted EBITDA of $385 million and free cash flow of $321 million, with a year-on-year increase in Adjusted EBITDA of nearly 20% to $1.37 billion and free cash flow rising to $626 million [4][5] - The company retired approximately $1.3 billion in debt during the year, reducing annual interest expense by nearly $90 million and enhancing financial flexibility [5][6] - Total liquidity at the end of Q4 was approximately $1.5 billion, including $620 million in unrestricted cash and cash equivalents [16] Business Line Data and Key Metrics Changes - The company achieved record uptime performance just shy of 98% across its fleet, with zero operational integrity events and zero lost time incidents [6] - The company executed five major planned out-of-service projects on time and on budget, and recycled six rigs in 2025 [6] Market Data and Key Metrics Changes - The outlook for deepwater offshore drilling is strengthening, with expectations for deepwater utilization to exceed 90% through 2027 [10] - In the US Gulf, long-term demand remains robust, driven by new lease awards and improved fiscal terms [10] - The rig count in Africa is expected to increase from roughly 15 to at least 20 over the next couple of years, with significant multi-year program awards anticipated [11] Company Strategy and Development Direction - The company aims to optimize the value of its differentiated assets and generate industry-leading free cash flow, with a backlog of approximately $6 billion [7][8] - The recent acquisition of Valaris is seen as transformational, expected to create cost synergies exceeding $200 million and enhance shareholder returns [8][9] - The company is focused on establishing a stronger capital structure to weather business cycles and improve operational efficiencies [8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the upcoming inflection point for offshore drilling, supported by customer conversations and increasing tender activity [33][34] - The company anticipates a pivot back towards traditional hydrocarbon sources among producers, indicating a shift in focus from renewables to offshore drilling [74][75] Other Important Information - The company has identified opportunities for rig movements to capitalize on demand in various regions, including Africa and Asia [42][46] - The guidance for 2026 reflects some idle time on specific rigs, but management expects free cash flow to be in line with or better than 2025 levels [18][67] Q&A Session Summary Question: Impact of Valaris acquisition on chartering strategy - Management indicated that the acquisition allows for cost efficiencies and improved service provision to customers, enhancing project execution reliability [22][24] Question: Confidence in offshore drilling inflection timing - Management cited customer conversations and increasing tender activity as key indicators of confidence in the timing of the market inflection [33][34] Question: Petrobras blend-and-extend negotiations - Management stated that the guidance reflects their best estimates and does not include significant upside from these negotiations [38] Question: Fleet placement and rig movements - Management noted that opportunities are developing in Africa and Asia, and rigs can be moved to meet demand in various regions [42][46] Question: Customer feedback on Valaris acquisition - Management reported overwhelmingly positive feedback from customers regarding the acquisition and its potential benefits [53][55]

Financial Data and Key Metrics Changes - For Q4 2025, the company reported adjusted EBITDA of $232 million and free cash flow of $35 million, with full-year adjusted EBITDA slightly above the $1.1 billion midpoint of original guidance [4][24] - Total revenue for the full year 2025 was $3.3 billion, with an adjusted EBITDA margin of 30% for Q4 [24][25] - The company maintained a return of capital program, returning an additional $80 million to shareholders through a $0.50 per share quarterly dividend in Q4 [4] Business Line Data and Key Metrics Changes - The backlog increased to $7.5 billion, with significant contracts awarded including a 3-year contract with Aker BP valued at $473 million and a 2-year contract with Exxon in Nigeria valued at $292 million [5][7] - The company expects capital expenditures of approximately $160 million for the reactivation of the Noble GreatWhite rig [6] Market Data and Key Metrics Changes - The contracted UDW rig count increased to 105, up from a low of 97 early last year, with a contracted utilization rate of 95% [11] - Day rates for Tier 1 drillships have settled around $400,000 per day, with lower-spec units capturing low to high $300,000 per day [13] - The average Brent crude price of $68 per barrel in 2025 was down by 15% compared to 2024, yet the company achieved a 30% year-over-year backlog growth [20] Company Strategy and Development Direction - The company is focusing on high-end deepwater and CJ70 jackup markets, having sold five jackups to Borr Drilling for $360 million to unlock capital for fleet reinvestment [22][23] - The company aims to maintain robust shareholder capital returns and anticipates a meaningful step-up in free cash flow next year [21][31] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the demand for deepwater rigs, citing a robust pipeline of open demand and a potential tightening market by 2027 [34][80] - The company noted that while there are macro uncertainties, the backlog progress has formed a strong foundation for rising utilization, EBITDA, and free cash flow [20][31] Other Important Information - The company completed the sale of five jackups and expects to close the sale of the Noble Resolve for $64 million in Q3 [22][30] - The company is committed to the CJ70 market in Norway and the North Sea, with early indications of strong utilization outlook [23] Q&A Session Summary Question: Thoughts on industry consolidation - Management acknowledged that consolidation is a path for the industry and expressed hope that it will make the industry more efficient [39][40] Question: Scale and opportunities in the floater market - Management believes they have sufficient scale and will continue to evaluate opportunities that align with their strategy [41][42] Question: Strength in the sixth-generation market - Management indicated that the recent contracts are project-specific and not driven by value decisions from customers [46][50] Question: Conditions for upward momentum in rates - Management noted that both crude prices and additional rig contracts are necessary for a tighter market, expressing optimism for 2027 [52][53] Question: Day rate expectations for 2027 - Management sees potential for day rates to improve but stops short of making it a base case, indicating a 50/50 chance [58] Question: Negotiations with Petrobras - Management is hopeful for news in the coming months regarding ongoing negotiations with Petrobras [59][60] Question: Norwegian market outlook - Management expressed cautious optimism about the Norwegian market, noting contracts and ongoing conversations with multiple customers [66][68] Question: Future of the Globetrotter and Apex rigs - Management is pursuing niche drilling applications for the Globetrotter and is evaluating opportunities for the Apex rig [70]

Financial Data and Key Metrics Changes - For Q4 2025, the company reported adjusted EBITDA of $232 million and free cash flow of $35 million, with full-year adjusted EBITDA slightly above the $1.1 billion midpoint of original guidance [4][24] - Total revenue for 2025 was $3.3 billion, with an adjusted EBITDA margin of 30% [24] - The total backlog as of February 11 stands at $7.5 billion, with approximately $2.3 billion scheduled for revenue conversion during the remainder of 2026 [25] Business Line Data and Key Metrics Changes - The company has seen strong booking levels across its fleet, with significant contracts awarded, including a 3-year contract with Aker BP valued at $473 million and a 2-year contract with Exxon in Nigeria valued at $292 million [5][7] - The company anticipates capital expenditures of approximately $160 million for the reactivation of the Noble GreatWhite rig [6] Market Data and Key Metrics Changes - The contracted UDW rig count has increased to 105, up from a low of 97 early last year, with a contracted utilization rate of 95% [11] - Day rates for Tier 1 drillships have settled around $400,000 per day, with lower-spec units capturing low to high $300,000 per day [13] - The average Brent crude price of $68 per barrel in 2025 was down by 15% compared to 2024, yet the company achieved a 30% year-over-year backlog growth [20] Company Strategy and Development Direction - The company is focusing on high-end deepwater and CJ70 jackup markets, having completed the sale of five jackups to Borr Drilling for $360 million [22][23] - The company aims to maintain robust shareholder capital returns while investing strategically in fleet upgrades and reactivations [21][23] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, anticipating a meaningful step-up in free cash flow next year, even in a flat market [21][31] - The company expects to see an upward bias in day rates due to improving utilization across the global fleet and encouraging leading indicators on forward demand [36] Other Important Information - The company has made significant strategic investments to support its offshore strategy, including modifications to the GreatWhite rig to enhance its capabilities [33] - The company is optimistic about the Norwegian market, with contracts secured for its CJ70 rigs and ongoing discussions with multiple customers [69] Q&A Session Summary Question: Thoughts on industry consolidation - Management acknowledged that consolidation is a path for the industry and expressed hope that it will make the industry more efficient [39][40] Question: Scale and opportunities in the floater market - Management believes they have sufficient scale and will continue to evaluate opportunities that align with their strategic focus [41][42] Question: Recent strength in the sixth-generation market - Management noted that the demand for sixth-generation rigs is project-specific and sustainable, not driven by value decisions from customers [46][50] Question: Conditions for upward momentum in rates - Management indicated that both crude prices and additional rig contracts are necessary for a tighter market, expressing optimism for 2027 [52][54] Question: Day rate expectations for 2027 - Management sees a possibility for day rates to improve into the mid-$400,000s range, depending on market conditions [58] Question: Negotiations with Petrobras - Management is hopeful for news in the coming months regarding ongoing negotiations with Petrobras, which are complex due to multiple dynamics [60][61] Question: Outlook for the Norwegian market and jackup fleet - Management expressed cautious optimism about the Norwegian market, noting contracts secured and potential for incremental demand [68][69] Question: Future of specific rigs in the fleet - Management is exploring opportunities for the Globetrotter and Apex rigs, with a focus on intervention and niche drilling applications [70][71] Question: Potential for more spot work in the U.S. Gulf - Management is optimistic about securing more opportunities for the BlackRhino rig in 2027, both domestically and internationally [77][78] Question: Concerns about project delays - Management acknowledged the risk of project delays but expressed confidence in the current backlog and market conditions for 2027 [80][81]

Hello and welcome to Asking for a Trend. I'm Josh Lipton and for the next half hour, we are breaking down the trends of today that'll move stocks tomorrow. There's a lot to keep track of, so we're focusing on what you need to know to get ahead of the curve.Here are some of the trends we're going to be diving into. The Trump administration is looking to take on China when it comes to critical minerals. We've got the details on the new partnership that was announced Wednesday.And another commodity we're watch ...

The companies themselves are cautious. Exxon Chief Executive Officer Darren Woods called Venezuela “uninvestable” in its current state. Here's what to know https://t.co/xhTLkADcpT ...

The challenge as we as I talked with the president about at the White House with respect to Venezuela is just uh the the damage that the the dictator that was recently removed and his predecessor did uh to to the economy and and to the industry. And the point that I was making at the White House is those are significant challenges that have to be addressed if uh we're going to achieve the priorities that the White House has. And those priorities, you know, start with one, stabilizing the country.Uh, second ...

Core Viewpoint - Shares are reaching record highs despite analysts reducing profit forecasts, which increases pressure on Exxon to demonstrate its ability to achieve long-term growth [1] Group 1 - Analysts are trimming profit forecasts for Exxon, indicating potential concerns about future earnings [1] - The current high share prices create expectations for the company to provide a clear strategy for sustainable growth [1]