Chevron's Q1 2025: Key Contradictions in Permian Production, Hess Merger, and Strategic Outlook

Permian Basin production and investment strategy, Permian production and plateau, Tengizchevroil Field concession extension and production curtailment risks, Hess merger and strategic opportunities are the key contradictions discussed in Chevron's latest 2025Q1 earnings call.



Production and Project Start-ups:
- Chevron's oil equivalent production remained flat at 1 million barrels per day compared to the previous quarter, despite new project start-ups.
- The flat production reflects recent asset sales and offsets from new projects like the Future Growth Project in Kazakhstan, which reached nameplate capacity within 30 days of startup.

Financial Performance and Shareholder Returns:
- Chevron returned $6.9 billion to shareholders through dividends and buybacks in Q1, with a 12th consecutive quarter of over $5 billion in returns.
- This was supported by strong earnings and cash flow, with adjusted earnings of $3.8 billion, reflecting cost discipline and operational efficiency.

Cost Management and Financial Strategy:
- Chevron reduced its 2025 CapEx budget by $2 billion from the previous year and aimed for $2 billion to $3 billion in structural cost savings by the end of next year.
- These measures are part of Chevron's strategy to manage through macro uncertainty, maintaining financial strength, and focusing on execution.

Permian Basin Activity:
- Production in the Permian Basin is expected to increase towards a sustained rate of 1 million barrels of oil equivalent per day by resuming higher frac activity in Q2.
- This reflects improvements in well performance and cost efficiencies within the Permian, particularly in the Delaware Basin.