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

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Transcription:

Corporate overview Mike Wirth Chairman and Chief Executive Officer

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

Leading operational excellence Oil spills to land or water Thousands of barrels Industry leading workforce safety 40 30 20 10 1 1 2015 2016 2017 2018 1 CVX ranking relative to competitors Competitors: BP, RDS, XOM Process safety improvement Days away from work rate Loss of containment events 0.10 0.05 1 1 1 Industry leading spill performance 100 50 2015 2016 2017 2018 CVX ranking relative to competitors Competitors: BP, RDS, XOM 2015 2016 2017 2018 Tier 1 Tier 2 3

Growing demand for our products Global energy demand MMBOED 125 Global liquids demand MMBD 400 100 75 ~ $ 10 trillion Supply gap 88MMBD 50 300 Renewables & hydro Nuclear 25 Existing supply Decline with no investment 2017 2020 2025 2030 2035 2040 Coal 200 Global petchem demand Million tonnes 100 ~54% of demand Natural gas Liquids ~53% of demand 600 400 200 ~3.5% CAGR 2017 2020 2025 2030 2035 2040 Source: IEA New Policies Scenario, World Energy Outlook 2018 2017 2020 2025 2030 2035 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 2018 4

Advantaged portfolio a key differentiator Upstream Downstream & Chemicals Leading adjusted EPB $ 14.45 7.4% 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

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

Strong reserves replacement Five-year reserve replacement ratio 2013-2017 Reserves to production ratio Years 150% Reserves replacement through the price cycle 18 16 100% 14 50% Prudent and stable reserves to production 12 10 0% 8 2013 2014 2015 2016 2017 2018 Competitors: BP, RDS, TOT, XOM Competitors: BP, RDS, TOT, XOM 7

Permian value has more than doubled Permian resource BBOE Permian unconventional portfolio value 20 15 10 5 Resource 16.2 BBOE up from 9.3 BBOE +6.9 >2X Value drivers Land optimization Well performance Technology 2017 2019 2017 2019 8

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 2018-2020 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

Best positioned for price uncertainty CV X 13.5% Net debt ratio 2018 Industry-leading balance sheet CV X ~ $ 51 2019 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-18 40 55 70 Competitors: BP, RDS, TOT, XOM Source: Wood Mackenzie 10

Disciplined and ratable C&E Total capital & exploratory expenditures $ billions Ratable $ 20 $ 20 $ 18- $ 20 $ 19- $ 22 Short-cycle, high return Low execution risk 2018 2019 budget 2020 guidance 2021-2023 guidance ~70% of 2019 spend delivers cash flow within 2 years 11

Efficient capital deployment generates superior returns Cash capex over CFFO Average % 2018-2021 CFFO ROCE at $60/bbl % 2017-2023 75% Low capital intensity 18 16 Margin Portfolio, cost & other Price upside 50% Improving returns 14 Volume 12 25% 10 2017 2018 2023 Competitors: BP, RDS, TOT, XOM Source: Third party analyst reports 12

Growing upstream cash generation Net production at $ 60/bbl MMBOED Production growth Upstream cash margin at $ 60/bbl $/BOE 4.0 5-year: 3-4% CAGR 25 3.5 Sustained cash margins 20 15 3.0 10 2.5 5 2.0 2018 2021 2023 2018 est 2021 2023 3-4% CAGR reflects 2018-2023. Includes the effect of expected asset sales in the public domain. Range factors: PZ and Venezuela, asset sales, other 13

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

Returning more cash to shareholders d 50% 5-year average shareholder distributions as % of CFFO and asset sales 2009-2023 45% 40% 35% 30% 25% 20% Avg. Brent ~ $ 95 Avg. Brent ~ $ 64 Avg. Brent $ 60 2009-2013 2014-2018 2019-2023 Returning higher percentage of cash flow to shareholders 15

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 2019 16