Corporate overview. Mike Wirth Chairman and Chief Executive Officer Chevron Corporation

Transcription

1 Corporate overview Mike Wirth Chairman and Chief Executive Officer

2 Positioned to win in any environment Advantaged portfolio delivers strong cash flow Unmatched balance sheet and low breakeven Disciplined, returns-driven capital allocation Superior cash returns to shareholders Chevron repositioned to deliver long-term value 2

3 Leading operational excellence Oil spills to land or water Thousands of barrels Industry leading workforce safety CVX ranking relative to competitors Competitors: BP, RDS, XOM Process safety improvement Days away from work rate Loss of containment events Industry leading spill performance CVX ranking relative to competitors Competitors: BP, RDS, XOM Tier 1 Tier 2 3

4 Growing demand for our products Global energy demand MMBOED 125 Global liquids demand MMBD ~ $ 10 trillion Supply gap 88MMBD Renewables & hydro Nuclear 25 Existing supply Decline with no investment Coal 200 Global petchem demand Million tonnes 100 ~54% of demand Natural gas Liquids ~53% of demand ~3.5% CAGR Source: IEA New Policies Scenario, World Energy Outlook Aromatics Olefins Source: IEA New Policies Scenario, World Energy Outlook 2018 Source: Nexant, Inc. Medium Oil Scenario; Olefin demand data as of April / May 2018; Aromatics data as of Sep / Oct

5 Advantaged portfolio a key differentiator Upstream Downstream & Chemicals Leading adjusted EPB $ % production growth Unit production cost ~ $ 10.50/BOE Leading adjusted EPB $ 2.66 Highest complexity refinery system (NCI: 12.7) Growing petchem position with advantaged feedstock (>80% ethane) See Appendix: reconciliation of non-gaap measures and slide notes for definitions, source information, calculations, and other. Nelson Complexity Index (NCI) source: Oil and Gas Journal 5

6 Upside leverage and downside resilience High price environment Grow production & sustain margins Returns-driven capital allocation Low price environment Competitive dividend growth Disciplined C&E Lower our cost structure Competitive dividend growth Flexible C&E Surplus cash returned to shareholders Liquids weighted portfolio Get more out of assets High-grade portfolio Balance sheet supports cash returns Low cost of supply Shareholder returns through the price cycle 6

7 Strong reserves replacement Five-year reserve replacement ratio Reserves to production ratio Years 150% Reserves replacement through the price cycle % 14 50% Prudent and stable reserves to production % Competitors: BP, RDS, TOT, XOM Competitors: BP, RDS, TOT, XOM 7

8 Permian value has more than doubled Permian resource BBOE Permian unconventional portfolio value Resource 16.2 BBOE up from 9.3 BBOE +6.9 >2X Value drivers Land optimization Well performance Technology

9 Immature Mature Portfolio high-grading continues Upstream assets Divestment criteria Strategic alignment Denmark San Joaquin Valley Resource potential Azerbaijan U.K. Central North Sea Nigeria Kazakhstan Relative economics Attractive value Frade Deepwater Gulf of Mexico Permian asset sale target ~ $ 5- $ 10B Non-core Core Australia ~ $ 2B proceeds in 2018 Key assets Assets being marketed (in public domain) Source: Wood Mackenzie 9

10 Best positioned for price uncertainty CV X 13.5% Net debt ratio 2018 Industry-leading balance sheet CV X ~ $ cash flow breakeven $/bbl Brent XO M Lowest breakeven TO T TO T BP RD S 150 Brent volatility $/bbl RD S 100 BP 50 XO M 10% 20% 30% Competitors: BP, RDS, TOT, XOM Jan-08 Jan-10 Jan-12 Jan-14 Jan-16 Jan Competitors: BP, RDS, TOT, XOM Source: Wood Mackenzie 10

11 Disciplined and ratable C&E Total capital & exploratory expenditures $ billions Ratable $ 20 $ 20 $ 18- $ 20 $ 19- $ 22 Short-cycle, high return Low execution risk budget 2020 guidance guidance ~70% of 2019 spend delivers cash flow within 2 years 11

12 Efficient capital deployment generates superior returns Cash capex over CFFO Average % CFFO ROCE at $60/bbl % % Low capital intensity Margin Portfolio, cost & other Price upside 50% Improving returns 14 Volume 12 25% Competitors: BP, RDS, TOT, XOM Source: Third party analyst reports 12

13 Growing upstream cash generation Net production at $ 60/bbl MMBOED Production growth Upstream cash margin at $ 60/bbl $/BOE year: 3-4% CAGR Sustained cash margins est % CAGR reflects Includes the effect of expected asset sales in the public domain. Range factors: PZ and Venezuela, asset sales, other 13

14 2019 cash generation covers all financial priorities Sources and uses of cash in 2019 at $ 60/bbl $ billions 30 Cash framework balanced at < $ 60/bbl 20 TCO financing Cover cash capex and dividends at ~ $ 52/bbl 10 Cash capex $ 4B share repurchases Sources of cash Capital program Dividends Buybacks Balance sheet 14

15 Returning more cash to shareholders d 50% 5-year average shareholder distributions as % of CFFO and asset sales % 40% 35% 30% 25% 20% Avg. Brent ~ $ 95 Avg. Brent ~ $ 64 Avg. Brent $ Returning higher percentage of cash flow to shareholders 15

16 Chevron offers a winning value proposition Disciplined financial priorities Competitive advantage Shareholder returns Maintain and grow dividend Fund capital program Strong balance sheet Strong free cash flow Disciplined C&E Advantaged portfolio Low execution risk Unmatched balance sheet Lowest breakeven >6% dividend increase in 1Q 2019 $ 4B share buybacks in 2019 Return surplus cash Total shareholder yield of ~6% in