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Chevron
ended 2023 on a high note, producing more oil and gas than ever, sending a record haul back to shareholders, and potentially quieting concerns that its operations had begun to falter.
Earnings in the fourth quarter were higher than expected and management raised the dividend by 8%. The stock rose 2% to $150.84.
The second-largest U.S. oil company behind
Exxon Mobil
posted total earnings of $2.3 billion, or $3.45 a share on an adjusted basis. Analysts were looking for a profit of $3.19 a share.
Chevron spent a record $26 billion on buybacks and dividends last year. After Friday’s dividend increase, the company’s dividend yield is 4.3%, ahead of Exxon’s 3.7%.
The release should allay worries about Chevron’s performance. Disappointing news about drilling projects in New Mexico and Kazakhstan had caused the stock to drop 17% in 2023.
Near the end of the year, CFO Pierre Breber sent an email to employees urging them to “do better,” Bloomberg reported. The company said that the internal communication showed “we recognize that we have not been performing to our potential.”
On Friday, Chevron said its Kazakhstan production was its highest in four years. It expects to hit its goal of pumping the equivalent of 1 million barrels a day of oil a day in the Permian Basin by 2025, up from 867,000 in the fourth quarter.
Investors have also been worried that Chevron’s decision in October to buy
Hess
in an all-stock deal will dilute shareholders’ positions and result in a decline in the growth of dividends and buybacks. The Hess deal is receiving scrutiny from the Federal Trade Commission, which has asked twice for information about the transaction.
Analysts don’t expect the FTC to challenge the deal, but it is possible. Hess stock was trading about 7% below the value of Chevron’s offer as of Thursday, a sign that investors may be concerned about whether the purchases will be completed.
“We’re confident we’re going to close the Hess transaction,” Breber said in an interview with Barron’s. “We expect it to close around the middle of the year. We’re right now in the process of working to respond to the FTC’s second request. It’s very broad. We don’t think there are competitive concerns, but we’re gonna go through that process.”
Write to Avi Salzman at [email protected]
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