Chevron Outlines Plan To Deliver Leading Shareholder Returns

• $75 to $80B shareholder distribution capacity over five years
• Adjusted free cash flow per share doubles by 2024
• Return on capital employed exceeds 10% by 2024

At its annual Security Analyst Meeting today, Chevron Corporation announced expectations to deliver leading shareholder returns through disciplined capital spending, improved cost efficiency, and continued cash flow growth over the next five years.

“Chevron has a winning investment proposition,” said Michael Wirth, Chevron’s chairman and CEO. “We believe our advantaged portfolio and capital efficiency enable us to grow cash flows and increase returns without relying on rising oil prices. Through continued execution of our strategy, Chevron has the potential to distribute $75 - $80B in cash to shareholders over the next five years.”

Robust Cash Generation & Improved Returns On Capital
Higher returns are primarily driven by the company’s new $2B target for cost and margin improvements as well as short cycle, capital efficient investments. The company also expects 9 percent compound annual growth in adjusted operating cash flow per share through 2024 while holding annual capital spending in a narrow range of $19 to $22B. The combination is expected to result in the doubling of adjusted free cash flow per share by 2024.

“We remain focused on a returns-driven approach to capital allocation, investing in lower-risk projects that should drive solid earnings and cash flow growth. As a result, we expect return on capital to exceed 10 percent by 2024 at flat $60 Brent nominal prices, an improvement of over 300 basis points,” said Pierre Breber, Chevron’s chief financial officer. “This performance is supported by an unmatched balance sheet and the lowest dividend breakeven among our peers.”

More Cash Returned To Shareholders
Chevron remains committed to delivering on its financial priorities and returning more cash to its shareholders, as demonstrated by an 8 percent dividend increase in 2020 and $5B of expected annual share repurchases. Combined, the company has a total shareholder yield greater than 7 percent.

“Execution of our strategy is positioning Chevron to return more cash to shareholders, today and into the future,” Wirth said. “Even with price volatility, we have the capability to deliver leading dividend growth and sustain our buyback program well into the future.”

Disciplined Investments And Production Growth
Chevron continues to execute its lower-risk and disciplined capital program, highlighted by its world-class Permian Basin position, the major expansion in Kazakhstan, and an attractive queue of deepwater opportunities in the Gulf of Mexico. The company expects compound annual production growth greater than 3 percent from 2019 to 2024, excluding any future unannounced asset sales.

“Our long-term production profile is strong and growing. We have a deep unconventional resource base and expect to see sustained production over 1 million barrels per day in the Permian through 2040 at relatively flat activity levels,” said Jay Johnson, executive vice president, Upstream. “Our experience and technology edge in the deepwater should enable continued development in the Gulf of Mexico, Brazil, and West Africa, and we have long-lived, low-decline assets in Australia and Kazakhstan. On top of this foundation, we have additional organic opportunities already in our portfolio that could attract future capital and deliver upside.”

Approach To Energy Transition
The company continues to invest in the future of energy to meet the world’s need for affordable, reliable and ever-cleaner energy. This includes lowering its carbon intensity cost efficiently, increasing renewables in support of its business, and investing in potential breakthrough technologies such as alternative fueling infrastructure and carbon capture.

“Our approach delivers greenhouse gas reductions in the short term while making investments in potential future breakthrough technologies for the long term,” Wirth added. “Chevron has the scale, capability and balance sheet strength to advance the innovations that will play a significant role in the future of energy.”

Non-GAAP Measures
For purposes of this news release, expected growth in adjusted operating cash flow refers to growth in cash flow from operations (CFFO) less working capital and special items divided by average diluted shares outstanding and assumes $5B per year in share repurchases.

Expected growth in adjusted free cash flow (FCF) refers to growth in CFFO less cash capital expenditures, working capital and special items divided by average diluted shares outstanding and assumes $5B per year in share repurchases. FCF represents the cash available to creditors and investors after investing in the business.

For additional information regarding expected future performance, including adjusted CFFO and adjusted FCF, please refer to the presentations and full transcript of the meeting available on the Investor Relations website at www.chevron.com.

About Chevron Corporation
Chevron Corporation is one of the world's leading integrated energy companies. Through its subsidiaries that conduct business worldwide, the company is involved in virtually every facet of the energy industry. Chevron explores for, produces and transports crude oil and natural gas; refines, markets and distributes transportation fuels and lubricants; manufactures and sells petrochemicals and additives; generates power; and develops and deploys technologies that enhance business value in every aspect of the company's operations. Chevron is based in San Ramon, Calif.