Chevron Provides Details On Capex, $75 Billion Buyback At Investor Day

Chevron (CVX) maintained oil and gas production views and raised its CVX share buyback guidance during its investor event on Tuesday. The energy giant also touted efforts to cut carbon emissions. Chevron stock retreated Tuesday.

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At its annual investor meeting Tuesday, Chevron reaffirmed plans to raise total oil and gas production by around 3% above current levels by 2027. The company targets annual capital expenditures of $13 billion to $15 billion. The U.S. energy major also increased its share buyback expectations to $10 billion to $20 billion per year.

CEO Mike Wirth said that with “strong free cash flow, lower carbon operations and new energy solutions” the company “intends to sustain higher returns in a lower carbon future and continue to win investors back to energy.”

“Chevron intends to be a leader in both traditional and new energy businesses,” Wirth said. “We’re growing energy supply, lowering carbon intensity and returning more cash to shareholders.”

While Chevron announced it is maintaining its oil and gas production levels, the company also said it is looking to “reduce the carbon intensity” of its energy production. The company is targeting a carbon reduction of 24 kilograms per barrel of oil equivalent by 2028.

Chevron’s carbon-cutting strategy involves biodiesel investment, carbon capture projects, natural gas and hydrogen.

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Chevron Stock

Chevron stock lost 1.2% to 160.80 on the stock market today. CVX shares have dropped below their 200-day moving average and are down 13% from Jan. 26 highs.

Last month, Chevron announced a $75 billion stock buyback program. That represents 20% of shares outstanding at current price levels.

On Tuesday, CFO Pierre Breber told analysts if the Brent oil prices decrease to $50 per barrel in 2025, then held flat, Chevron would repurchase shares at a rate of $10 billion per year. If Brent prices increased before settling around the estimated $70 per barrel in 2025, Chevron’s buyback program would run at around $20 billion per year.

Chevron executives added that beginning in Q2, the annual CVX share buyback rate will be $17.5 billion.

Brent crude futures increased around 1.6% to above $83 per barrel Tuesday. Meanwhile, West Texas Intermediate crude prices rose less than 2% to more than $77 per barrel. Brent crude oil prices have dropped more than 30% since March, 2022. WTI is down more than 40%.

Chevron also boosted its quarterly dividend by 6%, to $1.51 a share. The $75 billion buyback program will begin on April 1, 2023, and does not have a fixed expiration date. Chevron’s previous stock buyback program of $25 billion began in January 2019 and will end on March 31, 2023.

In 2022, as the U.S. economy recovered from the Covid pandemic, Russia invaded Ukraine in February, sending oil, gasoline and natural gas prices soaring. This resulted in Chevron, Exxon Mobil (XOM) and other energy stocks leading the market, with the companies posting record profits.

Chevron stock rose more than 50% in 2022 even as the broader stock market declined.

Chevron stock ranks 13th in the Oil & Gas-Integrated industry group. CVX shares have a 67 Composite Rating out of 99. The stock has a 48 Relative Strength Rating, an exclusive IBD Stock Checkup gauge for share-price movement. The EPS rating is 76.

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Chevron Reports Record Profits, $75 Billion Buyback; White House Fumes