First quarter 2023 compared to first quarter 2022
Key Financial Results
Earnings by Business Segment
Three Months Ended
March 31
2023 2022
(Millions of dollars)
Upstream
United States $ 1,781 $ 3,238
International 3,380 3,696
Total Upstream 5,161 6,934
Downstream
United States 977 486
International 823 (155)
Total Downstream 1,800 331
Total Segment Earnings 6,961 7,265
All Other (387) (1,006)
Net income (loss) attributable to
$ 6,259 (1) Includes foreign currency effects.$ (40) $ (218)
(2) Income (loss) net of taxes; also referred to as “income” in the following discussions.
Net income attributable toChevron Corporation for first quarter 2023 was$6.6 billion ($3.46 per share - diluted), compared with$6.3 billion ($3.22 per share - diluted) in the first quarter of 2022.
Upstream earnings in the first quarter of 2023 were
Downstream earnings in first quarter 2023 were$1.8 billion compared with$331 million in the corresponding 2022 period. The increase was mainly due to higher margins on refined product sales, partially offset by higher operating expenses and lower earnings from the 50 percent-ownedChevron Phillips Chemical Company (CPChem). Refer to "Results of Operations" for additional discussion of results by business segment and "All Other" activities for the first quarter of 2023 versus the same periods in 2022.
Business environment and prospects
Chevron Corporation * is a global energy company with substantial business activities in the following countries:Angola ,Argentina ,Australia ,Bangladesh ,Brazil ,Canada ,China ,Egypt ,Equatorial Guinea ,Israel ,Kazakhstan ,Mexico ,Nigeria , thePartitioned Zone betweenSaudi Arabia andKuwait ,the Philippines ,Republic of Congo ,Singapore ,South Korea ,Thailand , theUnited Kingdom ,the United States , andVenezuela . The company's objective is to safely deliver higher returns, lower carbon and superior shareholder value in any business environment. Earnings of the company depend mostly on the profitability of its upstream business segment. The most significant factor affecting the results of operations for the upstream segment is the price of crude oil, which is determined in global markets outside of the company's control. In the company's downstream business, crude oil is the largest cost component of refined products. Periods of sustained lower commodity prices could result in the impairment or write-off of specific assets in future periods and cause the company to adjust operating expenses, including employee reductions, and capital expenditures, along with other measures intended to improve financial performance.
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* Incorporated inDelaware in 1926 asStandard Oil Company of California , the company adopted the nameChevron Corporation in 1984 andChevronTexaco Corporation in 2001. In 2005,ChevronTexaco Corporation changed its name toChevron Corporation . As used in this report, the term "Chevron" and such terms as "the company," "the corporation," "our," "we," "us" and "its" may refer toChevron Corporation , one or more of its consolidated subsidiaries, or all of them taken as a whole, but unless stated otherwise they do not include "affiliates" ofChevron - i.e., those companies generally owned 50 percent or less. All of these terms are used for convenience only and are not intended as a precise description of any of the separate companies, each of which manages its own affairs. 21
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Governments, companies, communities, and other stakeholders are increasingly supporting efforts to address climate change. International initiatives and national, regional and state legislation and regulations that aim to directly or indirectly reduce GHG emissions are in various stages of design, adoption, and implementation. These policies and programs, some of which support the global net zero emissions ambitions of the Paris Agreement, can change the amount of energy consumed, the rate of energy-demand growth, the energy mix, and the relative economics of one fuel versus another. Implementation of jurisdiction-specific policies and programs can be dependent on, and can affect the pace of, technological advancements, the granting of necessary permits by governing authorities, the availability of cost-effective, verifiable carbon credits, the availability of suppliers that can meet sustainability and other standards, evolving regulatory or other requirements affecting ESG standards or other disclosures, and evolving standards for tracking and reporting on emissions and emission reductions and removals. Significant uncertainty remains as to the pace and extent to which the transition to a lower carbon future will progress, which is dependent, in part, on further advancements and changes in policy, technology, and customer and consumer preferences. The level of expenditure required to comply with new or potential climate change-related laws and regulations and the amount of additional investments needed in new or existing technology or facilities, such as carbon capture and storage, is difficult to predict with certainty and is expected to vary depending on the actual laws and regulations enacted, available technology options, customer and consumer preferences, the company's activities, and market conditions. Although the future is uncertain, many published outlooks conclude that fossil fuels will remain a significant part of an energy system that increasingly incorporates lower carbon sources of supply for many years to come.Chevron supports the Paris Agreement's global approach to governments addressing climate change and continues to take actions to help lower the carbon intensity of its operations while continuing to meet the demand for energy.Chevron believes that broad, market-based mechanisms are the most efficient approach to addressing GHG emission reductions.Chevron integrates climate change-related issues and the regulatory and other responses to these issues into its strategy and planning, capital investment reviews, and risk management tools and processes, where it believes they are applicable. They are also factored into the company's long-range supply, demand, and energy price forecasts. These forecasts reflect estimates of long-range effects from climate change-related policy actions, such as electric vehicle and renewable fuel penetration, energy efficiency standards, and demand response to oil and natural gas prices. The company will continue to develop oil and gas resources to meet customers' and consumers' demand for energy. At the same time,Chevron believes that the future of energy is lower carbon. The company will continue to maintain flexibility in its portfolio to be responsive to changes in policy, technology, and customer and consumer preferences.Chevron aims to grow its traditional oil and gas business, lower the carbon intensity of its operations and grow lower carbon businesses in renewable fuels, hydrogen, carbon capture, offsets, and other emerging technologies. To grow its lower carbon businesses,Chevron plans to target sectors of the economy where emissions are harder to abate or that cannot be easily electrified, while leveraging the company's capabilities, assets and customer relationships. The company's traditional oil and gas business may increase or decrease depending upon regulatory or market forces, among other factors.
Income Taxes The effective tax rate for the company can change substantially during periods of significant earnings volatility. This is due to the mix effects that are impacted by both the absolute level of earnings or losses and whether they arise in higher or lower tax rate jurisdictions. As a result, a decline or increase in the effective income tax rate in one period may not be indicative of expected results in future periods. Additional information related to the company's effective income tax rate is included in Note 9
Income Tax in the Consolidated Financial Statements.
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Supply Chain and Inflation Impacts The company is actively managing its contracting, procurement, and supply chain activities to effectively manage costs and facilitate supply chain resiliency and continuity in support of the company's operational goals. Third party costs for capital and operating expenses can be subject to external factors beyond the company's control including, but not limited to: severe weather or civil unrest, delays in construction, global and local supply chain distribution issues, inflation, tariffs or other taxes imposed on goods or services, and market-based prices charged by the industry's material and service providers.Chevron utilizes contracts with various pricing mechanisms, which may result in a lag before the company's costs reflect changes in market trends. Inflation continued to be a key factor, although costs are rising at a lower rate than last year. For key oil and gas industry inputs (e.g., rigs, well services, etc.), markets are likely to remain tight. Contracts for labor intensive operations also face a risk of upward pricing pressure due to a shortage of skilled workers. In contrast, inflationary pressures have started to reduce for non-oil and gas specific goods and services as a result of a slowdown in economic activity.Chevron believes it is well positioned to manage its costs effectively, in large part due to indexed contracts and secured supplies for critical inputs.
Other Impacts The Company continually evaluates opportunities to dispose of assets not expected to provide sufficient long-term value and to acquire assets or operations complementary to its asset base to help increase financial performance and value growth of the company Asset disposals and restructurings may result in material gains or losses in future periods.
The company closely monitors developments in the financial and credit markets, the level of worldwide economic activity, and the implications for the company of movements in commodity prices and downstream margins. Management takes these developments into account in the conduct of daily operations and for business planning.
The comments related to the profit trends of the main business areas of the company are as follows:
Upstream Earnings for the upstream segment are closely aligned with industry prices for crude oil and natural gas. Crude oil and natural gas prices are subject to external factors over which the company has no control, including product demand connected with global economic conditions, industry production and inventory levels, technology advancements, production quotas or other actions imposed by OPEC+ countries, actions of regulators, weather-related damage and disruptions, competing fuel prices, natural and human causes beyond the company's control such as the COVID-19 pandemic, and regional supply interruptions or fears thereof that may be caused by military conflicts, civil unrest or political uncertainty. Any of these factors could also inhibit the company's production capacity in an affected region. The company closely monitors developments in the countries in which it operates and holds investments and seeks to manage risks in operating its facilities and businesses. The longer-term trend in earnings for the upstream segment is also a function of other factors, including the company's ability to find or acquire and efficiently produce crude oil and natural gas, changes in fiscal terms of contracts, the pace and extent of the energy transition, and changes in tax, environmental and other applicable laws and regulations.Chevron has interests in Venezuelan assets operated by independent affiliates.Chevron has been conducting limited activities inVenezuela consistent with the authorization provided pursuant to general licenses issued bythe United States government. In fourth quarter 2022,Chevron received License 41 fromthe United States government, enabling the company to resume activity inVenezuela subject to certain limitations. The financial results forChevron's business inVenezuela are being recorded as non-equity investments since 2020, where income is only recognized when cash is received and production and reserves are not included in the company's results. Crude oil liftings inVenezuela started in first quarter 2023, which has and could continue to result in a positive contribution to the company's results. Governments (includingRussia ) have imposed and may impose additional sanctions and other trade laws, restrictions and regulations that could lead to disruption in our ability to produce, transport and/or export crude in the region aroundRussia . An adverse effect onCaspian Pipeline Consortium (CPC) operations could have a negative impact on the Tengiz field inKazakhstan and the company's results of operations and 23
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financial position. The financial impacts of these risks, including the penalties currently imposed, are not currently significant to the company; however, it is not yet known how long these conditions can last or how severe they can become.
[[Image Removed: beo chart.jpg]] The chart above shows the trend in benchmark prices for Brent crude oil, West Texas Intermediate (WTI) crude oil, andU.S. Henry Hub natural gas. The Brent price averaged$101 per barrel for the full-year 2022. During the first quarter of 2023, Brent averaged$81 per barrel and ended April at about$82 . The WTI price averaged$95 per barrel for the full-year 2022. During the first quarter of 2023, WTI averaged$76 per barrel and ended April at about$77 . The majority of the company's equity crude production is priced based on the Brent and WTI benchmarks. Crude prices decreased inMarch 2023 relative to first two months of 2023 due to concerns over the possible economic impacts associated with banking failures in theU.S. andEurope and potential impacts of future rate increases by theU.S. Federal Reserve Bank . Crude prices briefly increased in earlyApril 2023 following the announcement of OPEC+ production cuts and have subsequently declined. (See page 30 for the company's averageU.S. and international crude oil sales prices.) In contrast to price movements in the global market for crude oil, price changes for natural gas are also impacted by seasonal supply, demand and infrastructure conditions in regional and local markets. In theU.S. , prices at Henry Hub averaged$2.79 per thousand cubic feet (MCF) for the first three months of 2023, compared with$4.53 during the first three months of 2022. Robust domestic production and lower demand due to milder weather and liquefaction capacity outages have resulted in lower prices at Henry Hub this year. At the end ofApril 2023 , the Henry Hub spot price was$2.17 per MCF. Outside theU.S. , price changes for natural gas also depend on a wide range of supply, demand and regulatory circumstances. The company's long-term contract prices for liquefied natural gas (LNG) are typically linked to crude oil prices. Most of the equity LNG offtake from the operated Australian LNG assets is committed under binding long-term contracts, with some sold in the spot LNG market. International natural gas realizations averaged$9.00 per MCF during the first three months of 2023, compared with$8.87 per MCF in the same period last year. (See page 30 for the company's average natural gas sales prices for theU.S. and international regions.) Production The company's worldwide net oil-equivalent production in the first three months of 2023 averaged 2.98 million barrels per day, a decrease of 3 percent from the first three months of 2022 primarily due to the end of the Erawan concession inThailand . About 28 percent of the company's net oil-equivalent production in the first three months of 2023 occurred in the OPEC+ member countries ofAngola ,Equatorial Guinea ,Kazakhstan ,Nigeria , thePartitioned Zone betweenSaudi Arabia andKuwait andRepublic of Congo .
See “Results of Operations” on page 26 for more information on the Company’s upstream business.
Downstream Earnings for the downstream segment are closely tied to margins on
the refining, manufacturing and marketing of products that include gasoline,
diesel, jet fuel, lubricants, fuel oil, fuel and lubricant
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additives, petrochemicals and renewable fuels. Industry margins are sometimes volatile and can be affected by the global and regional supply-and-demand balance for refined products and petrochemicals, and by changes in the price of crude oil, other refinery and petrochemical feedstocks, and natural gas. Industry margins can also be influenced by inventory levels, geopolitical events, costs of materials and services, refinery or chemical plant capacity utilization, maintenance programs, and disruptions at refineries or chemical plants resulting from unplanned outages due to severe weather, fires or other operational events. Other factors affecting profitability for downstream operations include the reliability and efficiency of the company's refining, marketing and petrochemical assets, the effectiveness of its crude oil and product supply functions, and the volatility of tanker-charter rates for the company's shipping operations, which are driven by the industry's demand for crude oil and product tankers. Other factors beyond the company's control include the general level of inflation and energy costs to operate the company's refining, marketing and petrochemical assets, and changes in tax, environmental, and other applicable laws and regulations.
The company’s most important marketing areas are the
of
California Senate Bill SBx1-2, signed into law onMarch 28, 2023 , authorizes theCalifornia Energy Commission (CEC) to establish a "maximum gross gasoline refining margin" with respect to certain of the company's downstream activities inCalifornia , as well as establish fees for refiners for exceeding this margin. The law further expands on existing reporting requirements for refiners to the CEC. It is uncertain whether, or when, the CEC will establish a maximum gross gasoline refining margin and impose associated fees. We will evaluate the impact that SBx1-2 and any associated forthcoming CEC regulations may have on our current or anticipated future operations inCalifornia and results of operations when the regulations have been promulgated.
See the “Results of Operations” section beginning on page 27 for further information on the Company’s subsequent operations.
All Other consists of worldwide cash management and debt financing activities, corporate administrative functions, insurance operations, real estate activities and technology companies. Refer to "Cautionary Statements Relevant to Forward-Looking Information" on page 2 and to "Risk Factors" on pages 20 through 26 of the company's 2022 Annual Report on Form 10-K for a discussion of some of the inherent risks that could materially impact the company's results of operations or financial condition.
Remarkable developments
Some notable developments in recent months include the following:
•United States - Announced an agreement to install new technologies on the company's LNG vessels that are intended to reduce the carbon intensity of its LNG fleet operations. •United States - Announced an expansion of the Bayou Bend carbon capture and sequestration project in theU.S. Gulf Coast through an acquisition of nearly 100,000 acres of pore space, positioning Bayou Bend to become one of the largest carbon storage projects in theU.S. •United States - Announced commercial collaboration to purchase next generation renewable feedstocks that are intended to benefit farmers and increase supplies to meet a growing demand for lower carbon renewable fuels.
•United States: Winning bids submitted in 75 exploration blocks a
• United States – Got the first oil in the Mad Dog 2 project in the
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Results of Operations
Business Segments The following section presents the results of operations and
variances on an after-tax basis for the company's business segments - Upstream
and Downstream - as well as for "All Other." (Refer to Note 7 Operating
Segments and Geographic Data for a discussion of the company's "reportable
segments," as defined under the accounting standards for segment reporting.)
Upstream
Three Months Ended
March 31
2023 2022
(Millions of dollars)
U.S. Upstream Earnings $ 1,781 $ 3,238 U.S. upstream reported earnings of $1.8 billion in first quarter 2023, compared
with $3.2 billion from a year earlier. The decrease was primarily due to lower
realizations of $1.2 billion .
The average realization per barrel for U.S. crude oil and natural gas liquids in
first quarter 2023 was $59 , compared with $77 a year earlier. The average
natural gas realization in first quarter 2023 was $2.58 per thousand cubic feet,
compared with $4.10 in the 2022 period.
Net oil-equivalent production of 1.17 million barrels per day in first quarter
2023 was down 17,000 barrels per day, or 1 percent, from a year earlier. The
decrease was primarily due to the sale of Eagle Ford assets. The net liquids
component of oil-equivalent production of 877,000 barrels per day in first
quarter 2023 was flat from the corresponding 2022 period. Net natural gas
production of 1.74 billion cubic feet per day in first quarter 2023 decreased 5
percent from the 2022 period.
Three Months Ended
March 31
2023 2022
(Millions of dollars)
International Earnings*
* Includes foreign currency effects
International upstream operations earned$3.4 billion in first quarter 2023, compared with$3.7 billion a year ago. The decrease in earnings was primarily due to lower realizations of$400 million , higher tax charges related to changes in the energy profits levy in theUnited Kingdom of$130 million , lower sales volumes of$80 million , partially offset by lower operating expenses of$260 million . Foreign currency effects had a favorable impact on earnings of$88 million between periods. The average sales price for crude oil and natural gas liquids in first quarter 2023 was$69 per barrel, down from$93 a year earlier. The average sales price of natural gas was$9.00 per thousand cubic feet in first quarter 2023, compared with$8.87 in the 2022 period. Net oil-equivalent production of 1.81 million barrels per day in first quarter 2023 was down 64,000 barrels per day from first quarter 2022. The decrease was primarily due to lower production following expiration of the Erawan concession inThailand . The net liquids component of oil-equivalent production of 849,000 barrels per day in first quarter 2023 decreased 1 percent from the 2022 period. Net natural gas production of 5.78 billion cubic feet per day in first quarter 2023 decreased 6 percent from the 2022 period. 26
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Downstream
Three Months Ended
March 31
2023 2022
(Millions of dollars)
U.S. Downstream Earnings $ 977 $ 486 U.S. downstream reported earnings of $977 million in first quarter 2023,
compared with $486 million a year earlier. The increase was mainly due to higher
margins on refined product sales of $860 million , partially offset by higher
operating expenses of $170 million and lower earnings from the 50 percent-owned
CPChem of $160 million .
Refinery crude oil input in first quarter 2023 decreased 3 percent to 890,000
barrels per day from first quarter of 2022. The decrease was primarily due to
planned turnarounds at the El Segundo, California refinery .
Refined product sales in first quarter 2023 were up 3 percent to 1.25 million
barrels per day. The increase was mainly due to higher jet fuel demand and
higher renewable fuel sales following the Renewable Energy Group, Inc.
acquisition.
Three Months Ended
March 31
2023 2022
(Millions of dollars)
International Downstream Earnings* $ 823 $ (155)
* Includes foreign currency effects $ 18 $ 23
The internationally reported earnings of
Refinery crude input of 628,000 barrels per day in the first quarter of 2023 was up 1% from the year-ago period due to increased refinery operations in response to higher demand.
Total refined product sales in first quarter 2023 increased 10 percent to 1.46
million barrels per day from the corresponding 2022 period. The increase was
mainly due to higher jet fuel demand as travel restrictions associated with the
COVID-19 pandemic continue to ease.
All Other
Three Months Ended
March 31
2023 2022
(Millions of dollars)
Earnings/(Charges)* $ (387) $ (1,006)
* Includes foreign currency effects
All Other consists of worldwide cash management and debt financing activities, corporate administrative functions, insurance operations, real estate activities and technology companies. Net charges in first quarter 2023 were$387 million , compared to$1.0 billion a year earlier. The decrease in net charges between periods was mainly due to lower stock-based employee benefit costs and lower pension settlement costs. Foreign currency effects decreased net charges by$95 million between periods. 27
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Consolidated income statement
Explanations of period-to-period variations for selected income statement categories are provided below:
Three Months Ended
March 31
2023 2022
(Millions of dollars)
Sales and other operating income
Sales and other operating revenues decreased for the first quarter mainly due to
lower commodity prices.
Three Months Ended
March 31
2023 2022
(Millions of dollars)
Income from equity investments
Income from equity affiliates in the first quarter decreased mainly due to lower upstream-related earnings from TCO inKazakhstan and Angola LNG and lower downstream-related earnings from CPChem, partially offset by higher earnings fromGS Caltex inSouth Korea . Three Months Ended March 31 2023 2022 (Millions of dollars) Other income (loss)$ 363 $ (26) Other income for the first quarter increased due to a favorable swing in foreign currency effects and higher interest income, partially offset by lower gains on asset sales. Three Months Ended March 31 2023 2022 (Millions of dollars)
Purchase of crude oil and products
Purchased crude oil and products decreased for the first quarter primarily due
to lower crude oil prices.
Three Months Ended
March 31
2023 2022
(Millions of dollars)
Operating, selling, general and administrative expenses
Operating, selling, general and administrative expenses in the first quarter
increased primarily due to higher transportation expenses and higher services
and fees, partially offset by lower employee benefit expenses.
Three Months Ended
March 31
2023 2022
(Millions of dollars)
Exploration expenses $ 190 $ 209
Exploration expenses in the first quarter decreased primarily due to lower
charges for well write-offs.
Three Months Ended
March 31
2023 2022
(Millions of dollars)
Amortization, depletion and amortization
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Depreciation, depletion and amortization expense in the first quarter decreased primarily due to lower production and lower rates.
Three Months Ended
March 31
2023 2022
(Millions of dollars)
Taxes other than on income $ 1,096 $ 1,240
Non-taxes in the first quarter results decreased primarily due to lower production taxes and excise duties.
Three Months Ended
March 31
2023 2022
(Millions of dollars)
Interest and debt expense $ 115 $ 136
Interest and debt expenses for the first quarter decreased mainly due to lower
debt balances, partially offset by higher interest rates on variable rate bonds.
Three Months Ended
March 31
2023 2022
(Millions of dollars)
Other components of net periodic benefit costs $ 38
Other components of net periodic benefit costs in the first quarter decreased primarily due to lower pension settlement costs as fewer single pension distributions were made during the current year.
Three Months Ended
March 31
2023 2022
(Millions of dollars)
Income tax expense/(benefit) $ 2,914 $ 2,777
The increase in income tax expense for first quarter 2023 of $137 million is due
to the increase in total income before tax for the company of $465 million . The
increase in income before taxes for the company is primarily the result of
higher downstream margins partially offset by lower upstream realizations.
U.S. income before tax decreased from $3.7 billion in first quarter 2022 to $3.1
billion in first quarter 2023. This $655 million decrease in income was
primarily driven by lower upstream realizations partially offset by higher
downstream margins and had a direct impact on the company's U.S. income tax,
resulting in a decrease in tax expense of $161 million between year-over-year
periods, from $900 million in 2022 to $739 million in 2023.
International income before tax increased from $5.3 billion in first quarter
2022 to $6.4 billion in first quarter 2023. This $1.1 billion increase in income
was primarily driven by higher downstream margins partially offset by lower
upstream realizations. The increase in income primarily drove the $298 million
increase in international income tax expense between year-over-year periods,
from $1.9 billion in 2022 to $2.2 billion in 2023.
Additional information related to the Company’s effective income tax rate is included in Note 9 Income Taxes to the Consolidated Financial Statements.
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Table of Contents Selected Operating Data
The following table presents a comparison of selected operational data:
Selected Operating Data (1) (2)
Three Months Ended
March 31
2023 2022
U.S. Upstream
Net crude oil and natural gas liquids production (MBPD) 877 880
Net natural gas production (MMCFPD)(3) 1,742 1,828
Net oil-equivalent production (MBOEPD) 1,167 1,184
Sales of natural gas (MMCFPD) 4,096 4,441
Sales of natural gas liquids (MBPD) 298 269
Revenue from net production
Liquids ($/Bbl) $ 59.06 $ 76.60
Natural gas ($/MCF) $ 2.58 $ 4.10
International Upstream
Net crude oil and natural gas liquids production (MBPD)(4) 849 856
Net natural gas production (MMCFPD)(3) 5,775 6,119
Net oil-equivalent production (MBOEPD)(4) 1,812 1,876
Sales of natural gas (MMCFPD) 5,785 4,872
Sales of natural gas liquids (MBPD) 91 97
Revenue from liftings
Liquids ($/Bbl) $ 68.89 $ 93.31
Natural gas ($/MCF) $ 9.00 $ 8.87 U.S. and International Upstream
Total net oil-equivalent production (MBOEPD)(4) 2,979 3,060
U.S. Downstream
Gasoline sales (MBPD)(5) 609 644
Other refined product sales (MBPD) 643 573
Total refined product sales (MBPD) 1,252 1,217
Sales of natural gas (MMCFPD) 31 20
Sales of natural gas liquids (MBPD) 20 31
Refinery crude oil input (MBPD) 890 915
International Downstream
Gasoline sales (MBPD)(5) 297 281
Other refined product sales (MBPD) 780 693
Share of affiliate sales (MBPD) 383 353
Total refined product sales (MBPD) 1,460 1,327
Sales of natural gas (MMCFPD) 3 3
Sales of natural gas liquids (MBPD) 137 120
Refinery crude oil input (MBPD) 628 619
(1) Includes company share of equity affiliates.
(2) MBPD - thousands of barrels per day; MMCFPD - millions of cubic feet per day; Bbl - Barrel; MCF -
thousands of cubic feet; oil-equivalent gas conversion ratio is 6,000 cubic feet of natural gas = 1
barrel of crude oil; MBOEPD - thousands of barrels of oil-equivalent per day.
(3) Includes natural gas consumed in operations (MMCFPD):
United States 48 57
International 531 551
(4) Includes net production of synthetic oil:
Canada 51 39
(5) Includes branded and unbranded petrol.
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Liquidity and capital resources
Cash, cash equivalents and marketable securities totaled$15.8 billion atMarch 31, 2023 and$17.9 billion at year-end 2022. The company holds its cash with a diverse group of major financial institutions and has processes and safeguards in place to manage its cash balances and mitigate the risk of loss. Cash provided by operating activities in the first three months of 2023 was$7.2 billion , compared with$8.1 billion in the year-ago period. Capital expenditures totaled$3.0 billion in the first three months of 2023, up$1.1 billion from the year-ago period. Proceeds and deposits related to asset sales and returns of investment totaled$131 million and$88 million , respectively, in the first three months of 2023, compared to$747 million and$536 million , respectively, in the year-ago period. Cash provided by financing activities includes proceeds from shares issued for stock option exercises of$146 million in the first three months of 2023, compared with$4.6 billion in the year-ago period.
Dividends The company paid dividends of
Debt i
The company's debt and finance lease liabilities due within one year, consisting primarily of the current portion of long-term debt and redeemable long-term obligations, totaled$6.9 billion atMarch 31, 2023 , and$6.0 billion atDecember 31, 2022 . Of these amounts,$4.0 billion was reclassified to long-term atMarch 31, 2023 , and$4.1 billion was reclassified to long-term atDecember 31, 2022 . AtMarch 31, 2023 , settlement of these obligations was not expected to require the use of working capital within one year, as the company had the intent and the ability, as evidenced by committed credit facilities, to refinance them on a long-term basis.
The company has access to a commercial paper program as a source of financing for working capital or other short-term needs. The company had no commercial paper outstanding at the time
AtMarch 31, 2023 , the company had$8.5 billion in 364-day committed credit facilities with various major banks that enable the refinancing of short-term obligations on a long-term basis. The credit facilities allow the company to convert any amounts outstanding into a term loan for a period of up to one year. This supports commercial paper borrowing and can also be used for general corporate purposes. The company's practice has been to continually replace expiring commitments with new commitments on substantially the same terms, maintaining levels management believes appropriate. Any borrowings under the facilities would be unsecured indebtedness at interest rates based on the Secured Overnight Financing Rate (SOFR), or an average of base lending rates published by specified banks and on terms reflecting the company's strong credit rating. No borrowings were outstanding under these facilities atMarch 31, 2023 . In addition, the company has an automatic shelf registration statement that expires inAugust 2023 for an unspecified amount of nonconvertible debt securities issued byChevron Corporation or CUSA. The major debt rating agencies routinely evaluate the company's debt, and the company's cost of borrowing can increase or decrease depending on these debt ratings. The company has outstanding bonds issued byChevron Corporation , CUSA,Texaco Capital Inc. andNoble Energy, Inc. Most of these securities are the obligations of, or guaranteed by,Chevron Corporation and are rated AA- by Standard and Poor's Corporation (S&P) and Aa2 byMoody's Investors Service (Moody's). The company'sU.S. commercial paper is rated A-1+ by S&P and P-1 by Moody's. All of these ratings denote high-quality, investment-grade securities. The company's future debt level is dependent primarily on results of operations, cash that may be generated from asset dispositions, the capital program, lending commitments to affiliates, and shareholder distributions. Based on its high-quality debt ratings, the company believes that it has substantial borrowing capacity to meet unanticipated cash requirements. During extended periods of low prices for crude oil and natural gas and narrow margins for refined products and commodity chemicals, the company has the flexibility to modify capital spending plans, discontinue or curtail the stock repurchase program, sell assets, and increase borrowings to continue paying the common stock dividend. The company remains committed to retaining high-quality debt ratings. 31
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Summarized Financial Information for Guarantee of Securities of Subsidiaries CUSA issued bonds that are fully and unconditionally guaranteed on an unsecured basis byChevron Corporation (together, the "Obligor Group "). The tables below contain summary financial information forChevron Corporation , as Guarantor, excluding its consolidated subsidiaries, and CUSA, as the issuer, excluding its consolidated subsidiaries. The summary financial information of theObligor Group is presented on a combined basis, and transactions between the combined entities have been eliminated. Financial information for non-guarantor entities has been excluded. Three Months Ended Year Ended December March 31, 2023 31, 2022 (Millions of dollars) (unaudited) Sales and other operating revenues $ 25,553$ 126,911 Sales and other operating revenues - related party 10,887 50,082 Total costs and other deductions 24,863 121,757 Total costs and other deductions - related party 9,321 43,042 Net income (loss) $ 5,570 $ 15,043 At March 31, At December 31, 2023 2022 (Millions of dollars) (unaudited) Current assets $ 23,714 $ 28,781 Current assets - related party 11,315 12,326 Other assets 51,277 50,505 Current liabilities 21,285 22,663 Current liabilities - related party 116,682 118,277 Other liabilities 26,344 27,353 Total net equity (deficit)$ (78,005) $ (76,681) Common Stock Repurchase Program The Board of Directors authorized a stock repurchase program in 2019 with a maximum dollar limit of$25 billion and no set term limits (the "2019 Program"). In the first quarter of 2023, the company repurchased 22.4 million shares for$3.75 billion . In the aggregate, the company repurchased 153.8 million shares for$21.8 billion under the 2019 Program, which terminated onMarch 31, 2023 after completion of the company's repurchases in first quarter 2023. OnJanuary 25, 2023 , the Board of Directors authorized the repurchase of the company's shares of common stock in an aggregate amount of$75 billion (the "2023 Program"). The 2023 Program took effect onApril 1, 2023 , and does not have a fixed expiration date. The company currently expects to repurchase$4.375 billion of its common stock during the second quarter of 2023 under the 2023 Program. Repurchases may be made from time to time in the open market, by block purchases, in privately negotiated transactions or in such other manner as determined by the company. The timing of the repurchases and the actual amount repurchased will depend on a variety of factors, including the market price of the company's shares, general market and economic conditions, and other factors. The stock repurchase program and any forward guidance as to expected repurchases do not obligate the company to acquire any particular amount of common stock, and the program may be discontinued or resumed at any time. Noncontrolling Interests The company had noncontrolling interests of$985 million atMarch 31, 2023 and$960 million atDecember 31, 2022 . Included within noncontrolling interests is$145 million atMarch 31, 2023 and$142 million atDecember 31, 2022 of redeemable noncontrolling interest. 32
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Table of Contents Financial Ratios and Metrics
At March 31, At December 31,
2023 2022
Current Ratio (1) 1.4 1.5
Debt Ratio 12.7 % 12.8 %
Net Debt Ratio (2) 4.4 % 3.3 %
(1) At
(2) Net Debt Ratio forMarch 31, 2023 is calculated as short-term debt of$2.9 billion plus long-term debt of$20.3 billion (together, "total debt") less cash and cash equivalents of$15.7 billion and marketable securities of$130 million as a percentage of total debt less cash and cash equivalents and marketable securities, plusChevron Corporation Stockholders' Equity of$159.4 billion . For theDecember 31, 2022 calculation, please refer to page 49 ofChevron's 2022 Annual Report on Form 10-K. Three Months EndedMarch 31 2023 2022 (Millions of dollars)
Net cash provided by operating activities
Less: Capital expenditures
(3,038) (1,960)
Free Cash Flow $ 4,167 $ 6,095
Pension obligations Information related to contributions to pension plans is included in Note 7 Employee benefits to the consolidated financial statements.
Capital Expenditures The company's capital expenditures (capex) primarily includes additions to fixed assets or investments for the company's consolidated subsidiaries and is disclosed in the Consolidated Statement of Cash Flows. Capex was$3.0 billion in the first three months of 2023, compared with$2.0 billion in the corresponding 2022 period due to higher spend inthe United States . Affiliate Capital Expenditures The company's affiliate capital expenditures (affiliate capex) primarily includes additions to fixed assets or investments in the equity affiliate's financial statements and does not require cash outlays by the company. Affiliate capex was$869 million in the first three months of 2023, compared with$725 million in the corresponding 2022 period.
Capex and Affiliate Capex by Business Segment
Three Months Ended
March 31
2023 2022
Capex (Millions of dollars)
United States
Upstream $ 1,918 $ 1,287
Downstream 331 123
All Other 31 42
Total United States 2,280 1,452
International
Upstream 722 480
Downstream 30 27
All Other 6 1
Total International 758 508
Capex $ 3,038 $ 1,960
Affiliate Capex
Upstream $ 639 $ 577
Downstream 230 148
Affiliate Capex $ 869 $ 725
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Significant contingencies and litigation
Ecuador Information related to
Litigation under the heading “
Climate Change Information related to matters related to climate change is included in Note 1 0 Litigation under the heading “Climate Change”.
Louisiana Information related to
Income Tax Information related to income tax contingencies is included
Note 9 Corporate Tax and Note 1 1 Other contingencies and commitments under the heading “Corporate Tax”.
Guarantees Information related to the company’s guarantees is included
Note 1 1 Other contingencies and commitments under the heading “Guarantees”.
Compensation Information related to compensation is included
Note 1 1 Other contingencies and commitments under the heading “Indemnities”.
Unconditional long-term purchase obligations and commitments, including performance and payment agreements Information related to the Company’s long-term unconditional purchase obligations and commitments is included in
Note 1 1 Other contingencies and commitments under the heading “Unconditional long-term purchase obligations and commitments, including performance and Take-or-Pay agreements”.
Environmental Information related to environmental issues is included in Note 1 1 Other contingencies and commitments under the heading “Environmental”.
Other Contingencies Information related to the company's other contingencies is included in Note 1 1 Other Contingencies and Commitments under the heading "Other Contingencies."
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