Chevron Corp. hit record oil and gas production in the Permian Basin during the second quarter — and blew past some analysts’ expectations — according to preliminary results the U.S. supermajor released prior to its July 28 earnings report.
Chevron’s Permian Basin production of 772,000 boe/d set a new quarterly record—11% higher than the same quarter a year ago, the company disclosed in a surprise filing on July 23.
The company’s Permian oil and gas output increased by about 55,000 boe/d quarter-over-quarter, crushing some predictions. TD Cowen’s second-quarter forecast Chevron production growth was around 12,000 boe/d, the firm wrote in a July 24 report.
Early 2023 well performance from Chevron’s operated assets in the Permian indicate the company is on track to meet its full-year guidance. Full-year Permian production is forecast at about 770,000 boe/d, up from about 707,000 boe/d in 2022, Chevron CEO Mike Wirth said on the company’s first-quarter earnings call.
Between 2023 and 2027, Chevron expects to add 650,000 boe/d of incremental production; about 450,000 boe/d of that total will come from the Permian Basin.
The company’s drilling inventory and royalty position in the Permian “is expected to deliver strong cash flow through 2040,” Chevron said.
Chevron is also adding meaningful scale outside of the prolific Permian, the top oil-producing region in the Lower 48. The supermajor is adding complementary assets in the Denver-Julesburg (D-J) through its $6.3 billion acquisition of PDC Energy Inc.
The PDC deal—which also includes PDC’s smaller position in the Permian’s Delaware basin—is expected to close in August.
Chevron’s net oil and gas production was approximately 2.96 MMboe/d during the second quarter, down slightly from 2.98 MMboe/d during the first quarter.
RELATED: Chevron to Acquire PDC Energy for $6.3 Billion
Earnings snapshot
The company reported adjusted earnings of $3.08 per share for the second quarter—beating earnings expectations by analysts at TD Cowen, Tudor, Pickering, Holt & Co. (TPH & Co) and Jeffries.
Chevron’s earnings beat was driven largely by its upstream segment, which brought in earnings of $4.94 billion during the second quarter—surpassing TPH & Co.'s estimate of $4.5 billion for the quarter.
The company’s quarterly shareholder distributions of $7.2 billion also set a new record. Quarterly distributions included $2.8 billion of dividends and $4.4 billion in share buybacks.
Chevron has repurchased nearly 50 million of its outstanding shares so far this year, including 27 shares repurchased during the second quarter.
Chevron, as well as fellow U.S. supermajor Exxon Mobil Corp., are both slated to report second-quarter earnings on July 28.
RELATED: Chevron’s Unconventional Answers to Success
Recommended Reading
Hess Midstream Subsidiary to Buy Back $100MM of Class B Units
2024-03-13 - Hess Midstream subsidiary Hess Midstream Operations will repurchase approximately 2 million Class B units equal to 1.2% of the company.
Plains All American Names Michelle Podavin Midstream Canada President
2024-03-05 - Michelle Podavin, who currently serves as senior vice president of NGL commercial assets for Plains Midstream Canada, will become president of the business unit in June.
Matador Completes NatGas Connections in Delaware Basin
2024-03-25 - Matador Resources completed natural gas pipeline connections between Pronto Midstream to San Mateo Midstream and to Matador’s acreage in the Delaware Basin.
Targa Resources Ups Quarterly Dividend by 50% YoY
2024-04-12 - Targa Resource’s board of directors increased the first-quarter 2024 dividend by 50% compared to the same quarter a year ago.
Pembina Declares Series of Quarterly Dividends
2024-04-10 - Pembina Pipeline Corp’s board of directors declared quarterly dividends for series 1, 3, 5, 7, 9, 15, 17, 19, 21, 22 and 25.