Chevron Corporation (NYSE:CVX) has reported record earnings and cash flow for its 2022 financial year while increasing investments and growing US production to a company record.
The oil major reported fourth-quarter earnings of $6.4 billion, up from $5.1 billion in 4Q 2021. That took full-year 2022 earnings to $35.5 billion compared with $15.6 billion in 2021. Cash flow from operations reached $49.6 billion, with free cash flow of $37.6 billion.
Despite the strong growth in earnings from both its upstream and downstream businesses, 4Q earnings per share of $4.09 fell below consensus estimates from Refinitiv, sending its shares lower and reversing gains made on Thursday after it raised its quarterly dividend by 6% to $1.51 per share and announced plans to triple its budget for share buybacks to $75 billion.
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The company noted that investments last year increased by more than 75% from 2021, and annual US production rose to 1.2 million barrels of oil equivalent per day, led by 16% growth in Permian Basin unconventional production.
“Again in 2022, we delivered on our financial priorities: returning cash to shareholders, investing capital efficiently, and paying down debt,” Chevron’s chairman and CEO Mike Wirth said in a statement. “We’re also investing to grow both traditional and new energy supplies to meet increasing demand for affordable, reliable, and ever-cleaner energy.”
Chevron’s financial highlights in 2022 include:
- Increased quarterly dividend per share by 6% from prior year, paying out $11 billion to shareholders;
- Achieved return on capital employed of more than 20%, the highest since 2011;
- Strengthened its industry-leading balance sheet further with debt ratio of 12.8% and net debt ratio of 3.3%; and
- Returned an additional $11.25 billion to shareholders, repurchasing nearly 70 million shares, ending the year at an annual repurchase rate of $15 billion.
Other significant business highlights in 2022 include:
- Advanced the Future Growth Project in Kazakhstan, with construction largely complete at the company’s 50%-owned affiliate, Tengizchevroil LLP;
- Reached final investment decision on major integrated polymer projects in Texas and Qatar at the company’s 50%-owned affiliate, Chevron Phillips Chemical Company LLC;
- Approved the Ballymore project in the deepwater US Gulf of Mexico with design capacity of 75,000 barrels of crude oil per day;
- Approved a project to expand the Tamar gas facility in offshore Israel;
- Commenced a project to increase light crude oil processing capacity by 15% at the Pasadena, Texas refinery;
- Announced a significant new gas discovery at the Nargis block offshore Egypt in the eastern Mediterranean Sea;
- Acquired Renewable Energy Group Inc, becoming the second largest producer of bio-based diesels in the US;
- Formed a joint venture with Bunge North America Inc to develop renewable fuel feedstocks; and
- Advanced multiple carbon capture opportunities, including the Bayou Bend carbon storage project in the US Gulf Coast, and received permits to assess carbon storage offshore Australia.
Chevron’s shares traded 4.2% lower at $179.976 in late Friday morning trade in New York.
Contact the author at stephen.gunnion@proactiveinvestors.com