Please provide more details on Venezuela, including asset conditions, resource running room, and the self-funding model.

Operations in Venezuela have continued uninterrupted, with production growing by over 200,000 bbl/d since 2022 to 250,000 bbl/d gross. Potential for 50% additional growth exists over 18-24 months, funded by venture cash. The resource potential is large, but future expansion depends on country stability, fiscal regime, and regulatory predictability, needing to compete with other global opportunities. “The activity on the ground right now is entirely funded through the cash within those ventures.”

Can you discuss the early results of the new operating model implemented last fall, both on cost and operations, including any surprises or lessons learned?

The new operating model, live since October, has contributed to $1.5 billion in cost savings in 2025 and a $2 billion annual run rate. Management is confident in reaching the $3-4 billion target by end of 2026. Examples of efficiencies include optimizing production chemicals in the shale portfolio and leveraging AI in supply chain negotiations. The organizational changes are driving improvements across all teams. “Every team as part of this program has been benchmarking, has been looking for areas of improvement.”

Given the improving well productivity and capital efficiency in the Permian, how does this impact your decision-making process and overall Permian strategy?

The Permian strategy remains focused on holding production at 1 million bbl/d and optimizing cash generation, not production growth. Capital efficiency has improved, with CapEx at $3.5 billion, driven by doubled drilling efficiency since 2022. These efficiencies are now being extended across the entire shale and tight portfolio (Bakken, DJ, Argentina), improving returns without changing the overall strategy. “We're focused on growing cash flow, not growing production and the capital efficiency enables that.”

CVX

Chevron (CVX) Q4 FY25 earnings call: guidance and Q&A

Earnings call· Dec 2025 (Q4 FY25)· Energy· Jan 30, 2026

Source: earnings call transcript

Executive summary

Chevron Q4 FY25 — Record Production and Shareholder Returns Drive Strong Cash Flow Growth

Chevron delivered a strong Q4 FY25, marked by record production and robust free cash flow generation, enabling continued record shareholder returns. The company is entering 2026 from a position of strength, driven by project ramp-ups, the Hess acquisition, and an expanded cost reduction program. Management remains focused on capital discipline and cash flow growth across its diversified portfolio, with strategic investments in key regions like the Eastern Mediterranean and Venezuela.

Highlights

Production reached record levels globally and in the U.S., including 1 million boe/d in the Permian, contributing to a 7% to 10% increase year-over-year in 2026.
Adjusted free cash flow was up over 35% year-over-year, excluding asset sales, despite a nearly 15% decline in oil prices.
Returned record cash to shareholders for the fourth consecutive year, with over $100 billion in dividends and buybacks over the last 4 years.
Achieved $1.5 billion in structural cost reductions in 2025, with an annual run rate of $2 billion, exceeding expectations.
Increased quarterly dividend by 4%, aligning with top financial priority.

Concerns

Adjusted earnings were lower by roughly $600 million compared to last quarter, primarily due to lower liquids prices and reduced chemicals earnings/refining volumes.
TCO experienced a temporary power distribution system issue, causing production suspension, though early production has resumed.
CPC loading berth was impacted by a submarine drone in December, reducing loading capacity to one berth, now restored to two.

Guidance & targets

Category	Target	Timeline	Confidence
TCO Chevron share free cash flow	$6 billion high materiality	Full-year 2026 · FY26	High
Venezuelan production growth	up to 50% increase medium materiality	Next 18 to 24 months	Medium
Leviathan gross production capacity	2.1 billion cubic feet per day medium materiality	End of the decade · FY29	High
Tamar gross capacity increase	500 million cubic feet a day medium materiality	Later this year · FY26	High
Leviathan gross capacity increase (near-term)	200 million cubic feet a day medium materiality	Later this year · FY26	High
Offshore production increase	approximately 200,000 barrels of oil equivalent per day high materiality	Full-year 2026 · FY26	High
TCO production growth	30,000 barrels of oil equivalent per day medium materiality	Full-year 2026 · FY26	High
Total production increase (excluding asset sales)	7% to 10% high materiality	Full-year 2026 · FY26	High
Structural cost reduction target	$3 billion to $4 billion high materiality	By the end of 2026 · FY26	High
Bakken long lateral development	90% of wells low materiality	2027 · FY27	High
Bakken production target	around 200,000 barrels a day, plus or minus medium materiality	Ongoing	High

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Adjusted Upstream Adjusted upstream earnings decreased primarily due to lower liquids prices.	—	—	—	Decreased
Adjusted Downstream Adjusted downstream earnings were lower largely due to lower chemicals earnings and refining volumes.	—	—	—	Lower

CVX operating KPIs by quarter

CVX operating KPIs stated on its earnings calls, by fiscal quarter
KPI	Jun 2025 Q2 FY25	Jun 2026 Q2 FY26	Change vs prior quarter
Production Permian	1M boe/d+ In the Permian, production averaged more than 1 million barrels of oil equivalent per day, a target we introduced over 5 years ago and achieved right on schedule. Source: earnings call transcript	1M boe/d And as you know, we've got multiple large assets in there, 1 million barrels a day in the Permian, 400 in the DJ, 200 in the Bakken. Source: earnings call transcript	—

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Orderbook & backlog

Share repurchase authorization $3 billion Q4 FY25

Repurchased shares at the high end of the Q4 guidance range.

Deals & partnerships

Hess Corporation acquisition

Acquisition of Hess, contributing to a stronger upstream portfolio.

Libyan National Oil Corporation partnership

Recently signed an MOU in Libya to explore opportunities in the country.

Capital programs

Tengiz Future Growth Project (FGP) completed

Benefit:260,000 barrels of oil per day

Completion of the Future Growth Project at Tengiz, adding significant production capacity.

Leviathan Expansion underway

Benefit:2.1 billion cubic feet per day gross capacity

Leviathan recently reached Final Investment Decision (FID) to further expand production capacity.

Tamar Optimization Project underway

Benefit:1.6 billion cubic feet per day gross capacity

The Tamar optimization project start-up is in progress, increasing gross capacity.

Aphrodite Development underway

Aphrodite has now entered FEED (Front-End Engineering Design), working towards developing a competitive investment in Cyprus.

Risks & headwinds

TCO power distribution system issue Early January 2026

Temporary production suspension

Mitigation:Team proactively suspended production, identified root cause, and implemented solutions; early production resumed, full capacity expected within February.

CPC loading berth damage December 2025

Reduced loading capacity to 1 berth

Mitigation:One of the three offshore single-point moorings was hit by a submarine drone; 2 loading berths are now back in service.

Lower liquids prices Q4 FY25

Adjusted upstream earnings decreased

Mitigation:Focus on cost savings, capital discipline, and high-margin production growth to manage through cycles.

Geopolitical and regulatory uncertainty in Venezuela Ongoing

Potential for 50% production growth contingent on U.S. government authorizations; new hydrocarbon law under review.

Mitigation:Working with U.S. and Venezuelan governments to create circumstances for expansion; monitoring stability, fiscal regime, and regulatory predictability.

Sub-optimal energy policymaking in California Decades

Made it more difficult to invest, leading to higher fuel prices and refinery closures.

Mitigation:Leveraging strong downstream position with scale, complexity, flexible crude sourcing, and advanced logistics to remain competitive.

Q&A highlights

Can you elaborate on the TCO volumes for 2026, including optimized maintenance, and discuss the power distribution issue and debottlenecking activities?

Management explained the proactive suspension of TCO production due to a power system issue, with early production resuming and full capacity expected in February. The 2026 full-year guidance for TCO FCF is unchanged. Optimized maintenance and ongoing debottlenecking efforts, including a column retray, are expected to support production near original expectations and potentially increase capacity beyond nameplate.

“Production has been resumed at the Korolev field. A number of the assets or power distribution assets have been taken out of service have been brought back into service.”

asked by Arun Jayaram · answered by Michael Wirth

2 min read 6 chapters

Detailed narrative

Strategic Portfolio Strengthening and Project Execution

Chevron executed on its strategy in 2025, achieving record global and U.S. production, including 1 million boe/d in the Permian. Key project milestones included the completion of the Tengiz Future Growth Project, adding 260,000 bbl/d, and start-ups at Ballymore, Whale, and Anchor in the Gulf of America.

The Hess acquisition further strengthened the upstream portfolio, contributing to industry-leading cash margins. In downstream, the company delivered its highest U.S. refinery throughput in two decades, reflecting recent expansion projects and improved efficiency.

Venezuela Operations and Future Potential

Chevron has maintained uninterrupted operations in Venezuela, working with partners to increase production in its joint ventures by over 200,000 bbl/d since 2022, reaching approximately 250,000 bbl/d gross. The company sees potential for an additional 50% production growth over the next 18-24 months, contingent on U.S. government authorizations.

Current activities are venture-funded, recovering outstanding debt and covering operational costs. While the resource potential is large, future expansion depends on stability, fiscal regime clarity, and competitive terms.

Eastern Mediterranean Gas Development

The Eastern Mediterranean region is a significant growth area for Chevron, with over 40 Tcf of gross resource across its core assets. The Leviathan field recently reached FID for further expansion, aiming for 2.1 Bcf/d gross capacity by the end of the decade.

The Tamar optimization project is in progress, increasing gross capacity to 1.6 Bcf/d. The Aphrodite project has entered FEED, working towards a competitive development in Cyprus. These projects are expected to double earnings and free cash flow from the region by 2030.

Structural Cost Reduction Program Success

Chevron's structural cost reduction program exceeded expectations, delivering $1.5 billion in savings in 2025 and achieving an annual run rate of $2 billion. The company has expanded its target to $3 billion to $4 billion by the end of 2026, with over 60% of savings expected from durable efficiency gains.

This was driven by a broad, organization-wide effort to operate more efficiently, streamline processes, integrate advanced technology like AI, and leverage scale across the supply chain, including optimizing production chemicals and supply chain negotiations.

Permian and Shale Portfolio Capital Efficiency

The Permian asset has maintained production at 1 million bbl/d for three quarters, with a focus on cash generation rather than production growth. Capital efficiency has improved, with CapEx at $3.5 billion, driven by a more than doubling of drilling efficiency since 2022.

The integration of the shale and tight portfolio (Permian, Bakken, DJ, Argentina) into one business is extending these efficiencies across all assets. The strategy emphasizes improving returns through operational excellence and technology application.

Refining Portfolio and Market Dynamics

Chevron's refining portfolio, particularly in California, benefits from scale, complexity, flexible crude sourcing, and strong logistics. The company can process up to 100,000 bbl/d of Venezuelan crude in its system, in addition to the 50,000 bbl/d currently processed at Pascagoula.

The California market is geographically and logistically isolated, leading to higher fuel prices, which management attributes to past energy policymaking that has made investment more challenging.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.