Chevron's Record Shareholder Returns and Production Growth in 2024
Saturday, Feb 1, 2025 2:23 am ET
CVX --
Chevron Corporation (NYSE: CVX) reported impressive results for the fourth quarter of 2024, with record shareholder returns and production growth. The company's strong financial performance was driven by robust earnings and cash flow, as well as strategic asset sales and divestments. Chevron's lower carbon strategy also contributed to its success, with investments in lower carbon projects and growth in its new energies business.
Chevron's record shareholder returns in 2024 were $27 billion, including $15.2 billion in share repurchases and $11.8 billion in dividends. This performance was driven by strong earnings and cash flow, as well as asset sales and divestments. The company's adjusted return on capital employed (ROCE) was 10.5% for the year, demonstrating its ability to generate attractive returns on invested capital.
Chevron's record production in 2024 was driven by several key factors, both globally and in the United States. The company's Permian Basin operations contributed significantly to its overall growth, with production increasing by nearly 18% from last year. This was driven by advances in drilling techniques and increased takeaway capacity, which helped reduce the carbon intensity of the region's production. Chevron's deepwater growth projects in the Gulf of Mexico are also expected to contribute to the company's production growth in the coming years. The full integration of PDC Energy expanded Chevron's position in the DJ Basin, and the completion of the Wellhead Pressure Management Project and the start-up of the Future Growth Project at Tengizchevroil (TCO) in Kazakhstan are expected to contribute to the company's global production growth in the coming years.
Chevron's lower carbon strategy has had a positive impact on its financial performance and is expected to bring long-term benefits. The company has been investing in projects to lower the carbon intensity of its operations, with around $1.5 billion of capex dedicated to these initiatives in 2024. Chevron's Permian Basin operations have a carbon intensity nearly one-third lower than the global industry average, and the company is working to further reduce this through various initiatives. The company's new energies business, which includes renewable fuels, carbon capture and offsets, hydrogen, and other emerging technologies, has been growing, with over 20 million barrels of bio-based diesel sold in 2024 and projects designed to abate over 700 thousand tons of CO2 emissions annually.
Chevron's lower carbon strategy is expected to bring long-term financial benefits, including cost savings, improved reputation, and new revenue streams. The company's commitment to this strategy is also reflected in its strong financial results and shareholder value. Chevron has grown its dividend faster than the S&P 500 and nearly double the rate of its closest peer over the past five years. It has also maintained a strong balance sheet and returned significant cash to shareholders.
In conclusion, Chevron's record shareholder returns and production growth in 2024 were driven by strong financial performance, strategic asset sales and divestments, and a commitment to lower carbon initiatives. The company's lower carbon strategy is expected to bring long-term benefits, including cost savings, improved reputation, and new revenue streams. Chevron's strong financial results and shareholder value reflect its commitment to this strategy and its ability to generate attractive returns on invested capital.