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Chevron Q3 Earnings Decrease Amid Strategic Acquisitions And Increased Shareholder Return

Published 2023-10-27, 10:56 a/m
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CVX
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Chevron Corporation (NYSE: NYSE:CVX) reported a decrease in its Q3 2023 earnings to $6.5 billion from Q3 2022's $11.2 billion, with adjusted earnings falling to $5.7 billion from the previous year's $10.8 billion. The drop in earnings is largely attributed to lower upstream realizations and refined product sales margins. However, the company has returned a record $20 billion in cash to shareholders year-to-date, marking a 27% increase from the same period last year.

Sales and other operating revenues for Q3 2023 totaled $51.9 billion, down from $63.5 billion in Q3 2022 due to lower commodity prices. Despite this, worldwide net oil-equivalent production increased by 4% from the year-ago quarter, primarily due to the acquisition of PDC Energy (NASDAQ:PDCE), Inc., which also contributed to net production increases in the Permian Basin.

The company's capital expenditure (capex) in Q3 2023 saw an over 50% increase from Q3 2022, largely due to the acquisition of ACES Delta, LLC. This acquisition marks Chevron's strategic entry into green hydrogen production and storage, making it a majority stakeholder in the largest lower-carbon-intensity green hydrogen hub in the United States.

Chevron's shareholder distributions during the quarter were $6.2 billion, including dividends of $2.9 billion and share repurchases of $3.4 billion. The share repurchases were lower due to restrictions related to the PDC Energy acquisition. The company declared a quarterly dividend of $1.51 per share payable on December 11, 2023.

The corporation has been expanding its presence in the DJ and Permian Basins through its acquisition of PDC Energy, Inc., which added 179,000 oil-equivalent barrels per day during the quarter. This acquisition has led to a 20% increase in U.S. net oil-equivalent production from Q3 2022.

Chevron also announced an agreement to acquire Hess Corporation (NYSE:HES), known for its world-class assets, and started operations on a solar power project in New Mexico with a joint venture partner. The company converted the diesel hydrotreater at its El Segundo refinery to process renewable or traditional feedstocks.

U.S. upstream earnings were lower than a year ago due to lower realizations but were offset by earnings from PDC Energy. International upstream earnings were also lower due to decreased realizations and sales volumes but were partially offset by a one-time tax benefit of $560 million in Nigeria and pension settlement costs. Refinery product sales increased by 4% from the year-ago period, primarily due to increased demand for jet fuel.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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