2026 05 01 Earnings CVX Q1 Fy2026

Summary

Chevron Q1 2026: adjusted EPS $1.41 (down from Q4 due to ~$3B timing effects from commodity price run-up); production over 2M BOE/day; guidance unchanged. Load-bearing chains for wiki: (1) CVX in exclusive Microsoft discussions for West Texas gas-to-power datacenter project — FID expected 2026, directly relevant to energy-AI-datacenter intersection; (2) Middle East conflict (Iranian strikes/Strait of Hormuz closures) is creating integration value for CVX's diversified portfolio — equity crude >40% of Asia refinery throughput; (3) Eastern Med (Leviathan expansion FID January 2026) is a gas supply diversification beneficiary. CVX's consistent "capital discipline through cycles" posture is relevant to the ai-capex-to-power-and-materials-cascade mechanism.

Transcript

Michael K. Wirth (Chairman and CEO): All right. Thanks, Janine, and welcome to your new role. This quarter, Chevron delivered solid performance driven by disciplined execution and a resilient portfolio. Despite market volatility and heightened geopolitical tensions, our people remain focused on safely delivering the reliable energy the world needs. Our approach remains consistent. Maintain capital and cost discipline, generate strong cash flow, and deliver superior shareholder returns. Chevron's fundamentals are strong.

We have a world-class portfolio of upstream assets with peer-leading cash margins, and we are carrying strong momentum into the second quarter with U.S. production over 2 million barrels of oil equivalent per day, Gorgon and Wheatstone LNG running at full rates, 1 million barrels of oil equivalent per day, and U.S. refineries operating at record crude throughput. The unique combination of Chevron's industry-leading refining complexity and our diverse waterborne equity crudes from TCO, Guyana, Permian, Venezuela, and Argentina creates opportunities for value capture through integration.

In the second quarter, we expect global equity crude throughput to more than double year over year to 40%. In Asia, we anticipate over 80% refinery utilization.

Moving to Venezuela, we continue to leverage our deep expertise and long-standing position to create an option for the future. Two weeks ago, we announced an asset swap with PDVSA. The agreement increases our position in the Orinoco. Current operations are running smoothly. We are still in debt recovery mode and expect Venezuela to continue to represent 1% to 2% of cash flow from operations.

Eimear P. Bonner (Chief Financial Officer): For the first quarter, Chevron reported earnings of $2.2 billion or $1.11 per share. Adjusted earnings were $2.8 billion or $1.41 per share. Included in the quarter was a $360 million charge related to a legal reserve. Foreign currency effects decreased earnings by $223 million.

Organic CapEx was $3.9 billion in the quarter, consistent with historical CapEx trends of lighter spending in the first half of the year.

Adjusted first quarter earnings were $440 million lower than last quarter. Adjusted Downstream earnings decreased primarily due to unfavorable timing effects, which were partly offset by higher refining margins. Unfavorable timing effects totaled around $3 billion for the quarter, reflecting a steep rise in commodity prices in March. We anticipate approximately $1 billion of the paper positions to unwind in the second quarter, with the majority of related cargoes delivered in April.

Chevron generated cash flow from operations, excluding working capital, of $7.1 billion in the quarter. Adjusted free cash flow was $4.1 billion for the quarter.

Share repurchases were $2.5 billion, in line with guidance. First quarter 2026 oil equivalent production increased by approximately 500 thousand barrels per day compared to 2025. This reflects the integration of legacy Hess assets in addition to continued organic growth across the portfolio.

Let me close by reinforcing that despite changes in the external environment, we are executing our plan with discipline. Chevron's business is strong, and our 2026 guidance is unchanged. Capital spending and production outlooks are consistent with previous guidance, and we are on track to deliver our $3 billion to $4 billion structural cost reduction target by year end. These are not aspirational goals. They are grounded in assets that are operating today, a more efficient organizational model, and continued capital discipline.

Q&A — Steve Richardson (Evercore) on Microsoft power project:

Stephen Richardson: Michael, I was wondering if you could talk a little bit about the exclusivity agreement with Microsoft on the power projects.

Michael Wirth: It has been reported, and we have confirmed, that we are in exclusive discussions with Microsoft right now. We are very pleased to be in those discussions with such a high-quality customer. It is a company we know well. They have been a partner of ours for a long time. They are our primary cloud provider and a key technology provider for many years. We have a deep and very good relationship with Microsoft.

The project we are advancing in West Texas is progressing well. We have submitted an air permit. We have secured not only the large turbines we talked about before, but also small-block generation that is useful in early scale-up and for reliability. We have selected an EPC who is doing engineering work. We have agreed with a water provider. We are advancing the project with pace and are beginning to take delivery on turbines this year.

Subject to definitive agreements, which we are in negotiations for, we will move towards FID later this year and deliver a project with speed, scale, and differentiation. We will remain disciplined on returns. The negotiations thus far look like we can find a place to meet where Microsoft's expectations on power prices and our expectations on return on investment can both be satisfied. We will likely have more to say about this on the next call. Stay tuned.

Q&A — Neil Mehta (Goldman Sachs) on Middle East conflict and pricing:

Michael Wirth: This is clearly a very significant disruption to the global energy system. It is a scenario that we have thought about and included in some of our planning exercises for many years. It is early to have firm conclusions about how the energy system will change in the long term. I do think there will be changes, but we have to see how things play out.

One thing you can expect from us is consistency. You will see capital and cost discipline no matter what. You will see us invest in highly competitive assets with scale and longevity—assets that are low on the cost curve. We have great visibility through 2030. The things that Eimear talked about—consistency, discipline, and the strength of our portfolio operating today—will underpin our strategy going forward.

Q&A — Arun Jayaram (JPMorgan) on integration value:

Michael Wirth: As part of the organizational changes we made last year, we set up a global enterprise optimization team. They have the remit across all of the upstream and downstream to be sure that we are getting maximum value out of the entire set of assets.

Our portfolio provides options to move things around in times like this. Our refineries in Asia are all in various types of ventures. We expect those to run over 40% Chevron equity crude in the second quarter — much higher than under normal market conditions. In the U.S., we are operating over 50% equity crude throughput—some refineries much, much higher than that. We have used the Jones Act waiver to move crudes from the Gulf Coast around to the West Coast.

In a world that is getting very tight on products, we will keep our assets very full and be able to provide a significant supply into markets that dearly need it. We are not going to quantify the value we are capturing, but I think you will see it flow through in the numbers. It is meaningful and is continuing already into the second quarter and likely beyond.

Q&A — James West (Melius) on Eastern Mediterranean:

Michael Wirth: We have liked these assets from the start. That is why we are investing in expanding production at both Tamar and Leviathan, making good progress on those projects with ramp-up this year of another 600 million cubic feet per day of production on a 100% basis, and a longer-term expansion of Leviathan underway. We took FID on that in January and are excited about it. We have begun FEED work at Aphrodite. This is high-quality, clean biogenic gas. Demand for gas in the region continues to grow. Supply reliability everywhere is a priority.

Q&A — Devin McDermott (Morgan Stanley) on capital discipline:

Eimear Bonner: It comes back to staying consistent with our four financial priorities and being really disciplined through volatility. That is why today we are not changing any of our capital allocation framework. To recap: first and foremost, growing the dividend — this year we have grown it for the thirty-ninth consecutive year. Second, investing in the business in the most capital-efficient way. Our budget is $18 billion to $19 billion for the year, and we are on track with that budget. With only eight weeks into the conflict, it is too early to have a different view on the fundamental outlook around price. When it comes to capital allocation, we are comfortable with where we are, and we are staying consistent and disciplined.