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CVX posts 4Q22 results—capping record-high year in profits and cash flow…
PR:
https://www.chevron.com/-/media/chevron/stories/documents/4Q22-earnings-press-release.pdf
CC slides (with interspersed prepared remarks):
https://chevroncorp.gcs-web.com/static-files/79dc3c75-8af7-4ead-ad6a-b5bb4d01fcd7
Indeed. As far as I know, only AAPL has had a bigger one.
$75 billion. That's a buyback!
CVX boosts buyback authorization and raises dividend:
https://finance.yahoo.com/news/chevron-increases-quarterly-dividend-announces-213000580.html
A new $75B buyback authorization starts on 4/1/23 and has no expiration date. CVX had a pre-existing buyback authorization of $25B that runs until 3/31/23; hence, the actual increase in the buyback authorization is $50B plus whatever amount CVX repurchases during 1Q23, which may be somewhat less than $75B.
The new annualized dividend of $6.04 (up from $5.68) is a yield of 3.4% at the current share price ($179.08).
California Has a Gas-Price Mystery: Too High, but Why?
5:30 am ET January 20, 2023 Editor's Picks Print
By Jinjoo Lee
Why do California’s drivers pay so much for gas?
California’s retail gas price was $4.32 a gallon in December 2022, while it was $3.09 a gallon on average elsewhere in the U.S. That is a $1.23-per-gallon difference. There are some quantifiable sources of the California premium. Higher state gas taxes are one reason. The state’s clean air policies are another. These include a cap-and-trade program for greenhouse-gas emissions, a low-carbon fuel standard and a fee for the abatement of leaking underground storage. California also mandates a cleaner-burning gasoline, which adds around 10 cents a gallon.
Tally all of those California-specific costs up, though, and it comes out to about $1.09 a gallon, or 80 cents more than what the average state gas tax is elsewhere in the U.S., according to calculations by Prof. Severin Borenstein at the University of California Berkeley’s Haas School of Business, based on the monthly average for December 2022. But that still leaves a 43-cents-per-gallon difference not explained by California-specific tax and air policy-related costs. Mr. Borenstein was a member of a committee that the California Energy Commission assembled in 2014 to better understand fuel-price fluctuations.
explosion occurred The premium surfaced after an explosion occurred at a Torrance, Calif. refinery in February 2015. While a disruption like that could cause a temporary spike, it has lasted long after the refinery restarted in 2016. In all, Mr. Borenstein estimates that what he calls a “mystery gasoline surcharge” has cost California’s drivers almost $50 billion in eight years.
Who is capturing those profits? It doesn’t appear to be refineries–at least not directly. The price differential between California’s spot wholesale gasoline and the dirtier fuel used elsewhere in the U.S. has been fairly consistent before and after the Torrance refinery fire. That means the surcharge shows up between the refineries and consumers’ gas tanks.
One important aspect to consider: There is less competition among California’s retail fuel stations compared to other states. Elsewhere they typically have razor-thin margins on fuel and make up for it by selling things like coffee and lottery tickets. California has twice as many drivers per gas station as the rest of the country, according to an analysis presented by transportation-fuels consulting firm Stillwater Associates to the California Energy Commission in November. While the number of licensed drivers in California grew 14% between 2010 to 2020, the number of stations only grew 5%. True, Californians drive more electric vehicles than any other state but, as of 2021, they accounted for only 1.6% of total vehicle registrations there.
Fuel margins at California’s gas stations were about 79 cents a gallon on average in 2022, 79% higher than the 44 cents-a-gallon nationwide average, according to data from Oil Price Information Service, an energy data firm that is part of Dow Jones & Co., publisher of The Wall Street Journal. In Texas, where the margin was the thinnest, it was 26 cents a gallon. OPIS tracks the difference between the average price retailers charged for gasoline at their station and the price a refiner or distributor charges at the distribution point, known as the rack price.
That isn’t to say all retail gas stations are collecting rich margins. What is unique about California is that a large share of its gas stations are still owned by refiners or have long-term contracts that give refiners significant control over fuel prices, according to Prof. Borenstein. In that so-called dealer system, a branded station with a long-term contract is locked into buying their gasoline from a specific supplier—say, Chevron, Shell or Valero—and can’t shop around if prices look more attractive at the rack. That is to say, some of that big California premium could be going back to those oil companies and refiners, too. Tom Kloza, global head of energy analysis at OPIS, said that while his firm can track prices at the racks, there is little visibility on what price refiners or oil companies charge to fuel stations with which they have long-term contracts.
point toward a faster transition Why wouldn’t fat margins attract more new gas stations? Part of it could be that California’s state-level policies all followed suit point toward a faster transition away from gasoline. Opening a new gas station looks unappetizing, and some cities aren’t even allowing it. Petaluma enacted a ban in March 2021 and a handful of other cities have followed suit. Alessandra Magnasco, a policy manager for the California Fuels & Convenience Alliance, a trade group, says the cost of doing business is simply higher in California, citing higher electricity prices, wages and permitting costs. But those factors existed before the Torrance explosion, making it difficult to tie it to the California premium. Prof. Borenstein notes that there needs to be an investigation into how much cost these regulations impose and how many gas stations have been forced to shut down because of them.
Gov. Gavin Newsom has proposed a “price-gouging penalty” on what he says are oil companies’ excess profits. Politicians blaming high pump prices, but not low ones, on “Big Oil” is nothing unique. But California’s leaders may be right in this case. They also should look in the mirror and consider the burden of regulation. Oil companies and retail gas stations may well be taking large profits, but the blame can’t be entirely on the companies if policies deter competition. Mr. Newsom’s other proposal–expanding California agencies’ ability to investigate the cause of pricing irregularities–seems like an important step if it helps the state identify exactly where California’s gas premium goes and why.
Ironically, California’s gas price premium illustrates that, far from punishing the fossil fuel industry, a rapid shift can be a bonanza for gas stations and refiners that stick around. As Mr. Kloza puts it, “it’s a sunset industry, but it’s going to be a beautiful sunset.”
jinjoo.lee@wsj.com Write to Jinjoo Lee at jinjoo.lee@wsj.com
CVX 2023 capex budget=$16.9B—$14.0B direct*+$2.9B indirect†:
https://finance.yahoo.com/news/chevron-announces-2023-capital-expenditure-221000438.html
The $14B* figure includes $11.5B for upstream operations ($8.0B US; $3.5B ex-US), of which $4B is for the Permian and $2B is for other US shale.
The $2.9B† figure includes about $1.5B for Tengiz and about $1.0B for the CVX/PSX chemicals venture.
*Includes all subsidiaries that CVX consolidates (majority owned).
†Amount paid by CVX toward its unconsolidated JVs.
Chevron Corp. Stock Falls Friday, Underperforms Market
4:52 pm ET December 2, 2022 (MarketWatch)
Print
This article was automatically generated by MarketWatch using technology from Automated Insights.
Shares of Chevron Corp. (CVX) shed 0.80% to $181.03 Friday, on what proved to be an all-around mixed trading session for the stock market, with the Dow Jones Industrial Average rising 0.10% to 34,429.88 and the S&P 500 Index falling 0.12% to 4,071.70. This was the stock's second consecutive day of losses. Chevron Corp. closed $8.65 below its 52-week high ($189.68), which the company reached on November 14th.
Trading volume (6.8 M) remained 1.4 million below its 50-day average volume of 8.2 M.
Data source: Dow Jones Market Data, FactSet. Data compiled December 2, 2022.
(END) Dow Jones Newswires
December 02, 2022 16:52 ET (21:52 GMT)
Copyright (c) 2022 Dow Jones & Company, Inc.
The Biden administration should allow oil companies to pump oil in USA. Chevron and other large oil producers have the best, cleanest, and most environmentally safe pumping and refining operations in the USA. +++++ it would create 1000's of high paying jobs.
US okays CVX Venezuela production—for now:
https://www.wsj.com/articles/chevron-gets-new-u-s-license-to-pump-oil-in-venezuela-again-11669487483
The U.S. said it would allow Chevron Corp. to resume pumping oil from its Venezuelan oil fields after President Nicolás Maduro’s government and an opposition coalition agreed to implement a humanitarian program and continue dialogue in Mexico City on efforts to hold free and fair elections.
Following the agreement, the Biden administration granted Chevron a license that would allow the California-based oil company to return to its Venezuelan oil fields in joint ventures with Venezuela’s national oil company Petróleos de Venezuela SA.
…Biden administration officials said the license prohibits PdVSA from receiving profits from Chevron’s oil sales. The officials said the U.S. is prepared to revoke or amend the license, which will be in effect for six months, at any time if Venezuela doesn’t negotiate in good faith.
CVX CEO sold ~$17M worth of stock:
https://www.sec.gov/Archives/edgar/data/93410/000112760222025148/xslF345X03/form4.xml
The share price is just a hair below the all-time high.
Cranking like I said 180 break by XMAS
Diesel fuel shortage > Mansfield Energy issued the alert Friday stating there was a developing diesel fuel shortage in the southeastern region of the United States. The company speculated that the shortage could be generated from "poor pipeline shipping economies" and a historically low supply of diesel reserves.
"Poor pipeline shipping economics and historically low diesel inventories are combining to cause shortages in various markets throughout the Southeast," the company said. "These have been occurring sporadically, with areas like Tennessee seeing particularly acute challenges."
CVX 3Q22 results…
PR:
https://chevroncorp.gcs-web.com/static-files/397bd430-54bc-435e-b926-c53b61886c19
CC slides (with inline prepared remarks):
https://chevroncorp.gcs-web.com/static-files/63f9973d-32bc-416d-9d41-3394eadb3a0f
How about a record all-time high today! Let's go CVX !
Diesel fuel storage in USA is geting lower. Pricing going to rise soon. All our grocery, produce, and general store items are mostly transported by diesel run tractor trailers. Chevron needs to max out crude oil production in Alaska. Also, ramp up their use of the Alaska Pipeline.
Biden has created a mess. Now he wants the Strategic Oil Reserves to be drained. He wants to lower fuel prices at Chevron gas stations before election day. Plus all other branded fuels as well. As far as Venezuela, their crude oil is "sour " crude , which is more expensive to refine than sweet crude oil.
( crude oil in USA is sweet crude )
Biden administration digs in on Venezuelan oil deal:
https://finance.yahoo.com/news/2-washington-plays-hardball-chevrons-234140574.html
U.S. officials have made clear that allowing oil major Chevron to expand in Venezuela depends on a grand gesture: the Venezuelan government and opposition returning to election talks in Mexico at least for a first round, three people close to the matter said this week.
160 now 180+ by Xmas
CVX’s CEO tells it like it is:
https://www.ft.com/content/83d93bdd-659a-47b3-96bf-40884ef46a09?shareType=nongift
Mike Wirth, Chevron’s chief executive, said a premature effort to transition from fossil fuels had resulted in “unintended consequences”, including energy supply insecurity from crisis-hit Europe to California.
…Wirth said the source of the energy crunch predated Russia’s invasion and followed years of under-investment in new oil supply. Annual capital spending on oil and gas projects was now about half the rate seen in years before the pandemic, he said, even though demand for the energy has continued to rise.
Meanwhile, spending on alternatives to oil and gas was “woefully short, trillions of dollars short”, Wirth said. The mismatch “illustrates the risk in moving from a system that keeps the world functioning today aggressively to another system, and shutting down nuclear, shutting down coal, discouraging oil and gas”, he added.
Chevron refinery production in Venezuela translates into revenues. Although this is a gamble in dealing with a dictator socialist regime. Retooling and start-up costs for a refinery runs into multimillion dollars.
Good point. Still, any increase in global crude production should exert some downward pressure on prices.
p.s. I'm more interested in what this means for CVX, specifically, than in what it means for US gasoline prices.
Venezuela sour crudes are heavy in sulfur content, requiring additional refining that typically needs natural gas, which has doubled in price this year. If the crude is not used, it could end up being stored in oil tanks or exported away and may not have the intended effect of reducing gasoline prices.
Comments from anyone on the post I'm replying to?
The EVP who sold $14M worth of stock @$164/sh looks pretty smart (#msg-169819515), but the Venezuela deal (if it goes through) could get the share price back to that level.
CVX could soon be exporting Venezuelan oil:
https://www.wsj.com/articles/u-s-plans-to-ease-venezuela-sanctions-enabling-chevron-to-pump-oil-11665005719
The Biden administration is preparing to scale down sanctions on Venezuela’s authoritarian regime to allow Chevron Corp. to resume pumping oil there, paving the way for a potential reopening of U.S. and European markets to oil exports from Venezuela, according to people familiar with the proposal.
In exchange for the significant sanctions relief, the government of Venezuelan President Nicolás Maduro would resume long-suspended talks with the country’s opposition to discuss conditions needed to hold free and fair presidential elections in 2024, the people said. The U.S., Venezuela’s government and some Venezuelan opposition figures have also worked out a deal that would free up hundreds of millions of dollars in Venezuelan state funds frozen in American banks to pay for imports of food, medicine and equipment for the country’s battered electricity grid and municipal water systems.
…Ali Moshiri, a former Chevron executive who oversaw the expansion of the company’s operations in Latin America and worked closely with Venezuelan officials, said the Biden administration’s shift appears to reflect political pressure that has come with rising energy prices and tight global supplies [duh].
…Mr. Moshiri…estimates the country could reach 1.5 million barrels a day of output in two years if Chevron and other companies can work freely.
…The U.S. Treasury Department’s Office of Foreign Assets Control, which administers sanctions against Venezuela, is preparing to issue one or more licenses for Chevron to run its four existing joint-venture oil projects with the state oil company, Petróleos de Venezuela SA, or PdVSA.
…With Chevron in charge of all aspects of the projects, and the U.S. providing clearance to export oil, Venezuela could regain the relevance in the oil market that it enjoyed during the early 2000s, when it was one of the main exporters of crude to the U.S. The country is now exporting about 450,000 barrels a day and could double that figure in a matter of months, say people who are familiar with Venezuela’s oil industry and are bullish about its prospects.
CVX EVP sold $14M(!) of stock last week:
https://www.sec.gov/Archives/edgar/data/0000093410/000112760222021724/xslF345X03/form4.xml
This is the second CVX insider to make a large open-market sale recently.
CVX CFO exercised and sold $7.2M of stock in two recent transactions:
https://www.sec.gov/Archives/edgar/data/0000093410/000112760222021603/xslF345X03/form4.xml
https://www.sec.gov/Archives/edgar/data/0000093410/000112760222020953/xslF345X03/form4.xml
CVX +9% on blowout upstream-and-downstream 2Q22 results:
https://finance.yahoo.com/news/chevron-announces-second-quarter-2022-101500254.html
https://finance.yahoo.com/news/wrapup-3-u-majors-exxon-120230673.html
CVX generated $10.6B of free cash flow during 2Q22, and it increased guidance for 2022 share buybacks to $5-15B (from old guidance of $5-10B).
I agree 1000% with your analogy !!!
More from Bernstein webcast:
https://seekingalpha.com/article/4515739-chevron-corporations-cvx-ceo-mike-wirth-presents-bernsteins-38th-annual-strategic-decisions
“There hasn’t been a refinery built in this country [the US] since the 1970s. I personally don’t believe there will be a new petroleum refinery ever built in this country again..”
CVX Bernstein webcast:
https://seekingalpha.com/article/4515739-chevron-corporations-cvx-ceo-mike-wirth-presents-bernsteins-38th-annual-strategic-decisions
“…the narrative you hear that the industry is not growing production is not true. We are growing production and our industry is growing production… We raised our Permian production growth outlook to 15% this year.”
this market is so !@#$%
Berkshire upped CVX stake in 1Q22:
https://www.wsj.com/articles/warren-buffett-says-markets-have-become-a-gambling-parlor-11651340230
Berkshire’s stake in the company was worth $25.9 billion as of March 31, up from $4.5 billion at the end of 2021, according to the company’s filing. That makes Chevron one of Berkshire’s four biggest stockholdings…
4x earnings beat and it sells off as Diesel goes up another .30 in 24 hours. How can anyone make any sense of this market and most other oil stocks fall as oil goes up and Russia gets ready to shut off Germany. So TSLA is going to supply the world with energy overnight? Morons...
Agreed!
We need more storage.
I'm one who believes flaring off this gas is a complete waste. I wonder where they are putting this gas if indeed they aren't flaring it off.
Not enough ships just yet to transport it to Europe.
Bottom line ??
I most certainly am.
Are you aware of what is going on at the Permian basin with flaring? Heard they are saving a much bigger percentage as of late. Apparently this gas will go overseas to Europe,imo.
But the war and the reduction of energy exports from Russia has turned Europe into a rather desperate buyer of LNG. Valery Chow of Wood Mackenzie told Reuters “In contrast [to Asia], European LNG demand is expected to spike up by at least 20% in 2022, reflecting reduced Russian pipeline flows and the need to replenish depleted European gas storage levels.”
Prices for both natural gas and electricity have hit all-time highs in Europe, which led the European Union to roll out plans to cut dependency on Russian gas by two-thirds this year, and to end its reliance on Russian supplies of the fuel by the end of the decade.
Europe’s largest economy, Germany, vowed to all but wean itself off Russian gas by mid-2024. And it’s easy to see why.
The latest problem involves Russia now demanding payment for its gas in rubles. So, Germany and Austria have put plans in place to possibly to ration supplies of natural gas if supply is cut off.
Europe, which relies on Russia for 45% of its gas supplies—155 billion cubic meters—will need LNG from a number of sources, including the United States.
And indeed, the U.S. is finalizing a plan to supply the EU with up to an additional 15 billion cubic meters (cm) of liquefied natural gas by the end of 2022. This number could rise to 50 billion cubic meters within a few years.
Just hang on fir the ride and keep your eyes glued to CNBC and Bloomberg for breaking news, good, or bad.
My favs are CVX, BNO (Brent crude North Sea oil fund) and DVN.
Bullish AF!!!!!
https://www.zerohedge.com/markets/energy-stocks-have-huge-upside-they-catch-oil
Energy Stocks Have Huge Upside As They Catch Up With Oil
"The analysts add that as WTI oil soars above $125 and stays there, it creates further room for catchup for the likes of Exxon and Chevron. They conclude that if prices hold above $100/bbl in 2022, there is 35% potential upside to consensus Ebitda estimates for exploration & production firms."
I bought pre market today. Loving it! Are we going to double here at $170 or are we going higher?
CVX made the list for Top Gainers today
https://money.cnn.com/data/hotstocks/
CVX has no assets in Ukraine and minimal assets (one pipeline) in Russia.
CVX acquires REGI at 40% premium to Friday’s close:
https://chevroncorp.gcs-web.com/news-releases/news-release-details/chevron-announces-agreement-acquire-renewable-energy-group
The acquisition combines REG’s growing renewable fuels production and leading feedstock capabilities with Chevron’s large manufacturing, distribution and commercial marketing position.
… The transaction is expected to accelerate progress toward Chevron’s goal to grow renewable fuels production capacity to 100,000 barrels per day by 2030 and brings additional feedstock supplies and pre-treatment facilities. After closing of the acquisition, Chevron’s renewable fuels business, Renewable Fuels - REG, will be headquartered in Ames, Iowa. In addition, CJ Warner is expected to join Chevron’s Board of Directors.
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