Chevron Corp. reported better-than-expected earnings as production in the Permian Basin soared to a record and the oil giant said it waived the mandatory retirement age for Chairman and CEO Mike Wirth.
While adjusted earnings of $3.08 per share were above the Bloomberg consensus, net income fell to $6 billion, according to a statement on Sunday. It is the fourth consecutive quarter of lower results for Chevron, which have fallen to almost half the level of a year earlier, when oil prices rose after Russia invaded Ukraine.
The second-quarter earnings, which were initially released on July 28, come as Chevron looks for a record return for shareholders this year. Other management changes in the surprise announcement include the retirement next year of CFO Pierre Breber.
Wirth, 62, said in an interview that the board asked him to stay past the usual retirement age of 65 during a “turbulent time” in the markets. There’s “more I want to do,” Wirth said, adding that he’s “excited to keep going.”
Chevron maintained its high share buyback despite lower commodity prices, overcoming the first real payment challenge, which has increased several times over the past 18 months on the back of record earnings. At a rate of $17.5 billion a year, Chevron’s buyback equals that of Exxon Mobil Corp., which has a 40 percent larger market value.
Still, Chevron’s shares have rallied this year, down 12 percent through Friday compared with a 4 percent drop in the S&P 500 energy index. Wirth has struggled to persuade investors that Chevron has enough fossil fuel projects in its closet to sustain annual output growth rates of about 3 percent. In addition, the company was forced to redesign its drilling plan in the Permian Basin earlier this year as wells failed to meet expectations. By contrast, rival Exxon has plenty of room for growth.
Wirth sought to ease some of those concerns by agreeing to buy Colorado-based PDC Energy Inc. for $6.3 billion in stock in May. The goal is to expand Chevron’s operations in the DJ Basin, which Wirth believes can offer high returns with low risk.
Breber will retire on March 1, 2024, and will be succeeded as CFO by Eimear Bonner, currently vice president and chief technology officer, the company said.
Chevron said it produced the equivalent of 772,000 barrels of oil per day in the second quarter in the Permian Basin of West Texas and New Mexico, setting a new quarterly record for the company in the world’s busiest shale zone.
