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Date

Friday, May 1, 2026 at 11:00 a.m. ET

Call participants

  • Chairman and Chief Executive Officer — Michael K. Wirth
  • Chief Financial Officer — Eimear P. Bonner
  • Vice President, Investor Relations — Janine Wei

Takeaways

  • Reported Earnings -- $2.2 billion, or $1.11 per share, with a $360 million legal reserve charge and negative $223 million foreign currency effect.
  • Adjusted Earnings -- $2.8 billion, or $1.41 per share, reflecting a $440 million sequential decline and excluding special items.
  • Adjusted Upstream Earnings -- Increased due to higher realizations, lower depreciation, favorable operating expense, and tax benefits.
  • Adjusted Downstream Earnings -- Decreased, primarily due to approximately $3 billion of unfavorable timing effects from rapid commodity price increases, partially offset by higher refining margins.
  • Cash Flow from Operations (excluding working capital) -- $7.1 billion, including approximately $3 billion negative impact from special items and timing effects.
  • Adjusted Free Cash Flow -- $4.1 billion, benefited from a $1 billion loan repayment from Tengizchevroil (TCO).
  • Share Repurchases -- $2.5 billion in the quarter, consistent with prior guidance.
  • Organic Capital Expenditures (CapEx) -- $3.9 billion; inorganic CapEx was approximately $200 million, both on track with full-year capital guidance.
  • Equity Crude Throughput -- Management expects global equity crude throughput in Asia to exceed 40% in the second quarter and more than double year over year, with Asian refinery utilization anticipated above 80%.
  • Oil Equivalent Production -- Increased by approximately 500,000 barrels per day compared to the prior year, driven by Hess (NYSE:HES) asset integration and organic growth.
  • Venezuela Operations -- Asset swap with PDVSA expanded acreage (Ayacucho 8) and increased the Petro Independencia stake to 49%; Venezuela currently represents 1%-2% of cash flow from operations and remains in debt recovery mode.
  • TCO Performance -- Production above 1 million barrels of oil equivalent per day; operational issues from early quarter outages now resolved, and plant operating near full availability.
  • Affiliates’ Cash Distributions -- Guidance raised by more than $2 billion relative to the prior quarter due to operational momentum, with TCO moving to monthly dividends and affiliate distributions expected at about 70% of full-year guidance by end of the second quarter.
  • Structural Cost Reduction Target -- Company remains on track to achieve $3 billion-$4 billion in sustainable cost reduction by year-end 2026.
  • 2026 Guidance -- Management reiterated unchanged production, capital spending, and cost targets, including 7%-10% production growth for the year.
  • Operating Leverage -- Higher utilization at U.S. and Asian refineries enabled margin capture and supply reliability in tight markets by increasing equity crude throughput to record levels.
  • LNG Portfolio -- About 16 million tons per year (mtpa), with 80% under long-term oil-linked contracts, 20% exposed to spot; recent first U.S.-based LNG cargo sold to Europe under spot pricing, and Wheatstone and Gorgon facilities operating at full rates.
  • Petrochemical Margins -- Marked improvement in chain margins from historic lows, particularly in North American ethane-based crackers, but reflected primarily in second-quarter results.
  • Bakken Shale Operations -- Production approaching 200,000 barrels per day plateau, with improved efficiency from rig-count reduction, longer laterals, and application of advanced chemical recovery methods.
  • Exclusive Power Project Discussions -- Confirmed progress on West Texas power project in exclusive negotiations with Microsoft (NASDAQ:MSFT), with turbines secured, air permit submitted, and final investment decision (FID) targeted for later in 2026 pending definitive agreements.
  • Eastern Mediterranean Expansion -- 600 million cubic feet per day combined ramp-up at Tamar and Leviathan expected in 2026, with Aphrodite front-end engineering and design (FEED) underway.
  • Balance Sheet Activity -- Over $5 billion in short-term financing issued for liquidity and business needs; about half was repaid in April, and further reductions are expected through the next quarter.

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Risks

  • Unfavorable timing effects totaled around $3 billion for the quarter, reflecting sharp commodity price increases and were evenly split between inventory valuation and mark-to-market accounting on paper derivative positions.
  • Venezuela continues to represent only 1%-2% of cash flow from operations as Chevron Corporation (CVX 1.45%) remains in debt recovery and faces unresolved fiscal terms and uncertainties around dispute resolution before additional capital deployment.
  • The Bakken encountered production below plateau in the first quarter due to adverse weather, and efficiency efforts are being advanced through rig-count reduction.

Summary

Chevron Corporation (CVX 1.45%) highlighted significant integration benefits across its upstream and downstream portfolios, maximizing supply reliability and margin opportunities in tight markets. Management affirmed full-year capital spending and production guidance, projecting 7%-10% production growth with no change in cost or investment priorities despite heightened volatility. Strategic asset moves—including an expanded stake in Venezuela joint ventures and first U.S. LNG cargo sales into Europe—supported the company's broad geographic and value chain exposure. Leadership emphasized ongoing structural cost reductions, affiliate dividend strength, and disciplined capital allocation, referencing ongoing exclusive power project negotiations with Microsoft (NASDAQ:MSFT) and progress on major Eastern Mediterranean natural gas expansions.

  • Chairman Wirth stated, "The things that Eimear talked about—consistency, discipline, and the strength of our portfolio operating today—will underpin our strategy going forward," stressing their long-term approach through energy cycle disruptions.
  • Chief Financial Officer Bonner reaffirmed that, "we are not changing any of our capital allocation framework. We are not changing any of our ranges, and we are happy with where we are."
  • Chevron Corporation (CVX 1.45%) expects unwinding of approximately $1 billion of paper derivative positions in the second quarter, potentially normalizing part of the prior timing effect volatility noted in the Downstream segment.
  • Asset flexibility measures such as use of Jones Act waivers and cross-regional crude reallocation have been instrumental to U.S. and Asian refinery throughput records during regional supply constraints.
  • Management confirmed the transition at TCO to monthly dividend distributions, improving capital return visibility and supporting increased full-year affiliate distribution guidance.

Industry glossary

  • TCO (Tengizchevroil): Chevron Corporation (CVX 1.45%)'s 50%-owned affiliate operating the Tengiz oil field in Kazakhstan, a major source of production and free cash flow.
  • Equity Crude Throughput: The proportion of crude oil processed in refineries that is sourced from Chevron Corporation (CVX 1.45%)'s equity production rather than purchased from the market.
  • Mark-to-Market Accounting: Financial practice of valuing assets or liabilities based on current market prices, affecting reported earnings during commodity volatility.
  • FEED (Front-End Engineering and Design): The preliminary engineering and planning work conducted before a final investment decision on a major project.
  • Structural Cost Reduction: Long-term, sustainable decrease in operating expenses not tied to cyclical or temporary cost savings measures.

Full Conference Call Transcript

Michael K. Wirth: All right. Thanks, Janine, and welcome to your new role. This quarter, Chevron Corporation delivered solid performance driven by disciplined execution and a resilient portfolio. Despite market volatility and heightened geopolitical tensions, our people remain focused on safely delivering the reliable energy the world needs. Our approach remains consistent. Maintain capital and cost discipline, generate strong cash flow, and deliver superior shareholder returns. Chevron Corporation's fundamentals are strong.

We have a world-class portfolio of upstream assets with peer-leading cash margins, and we are carrying strong momentum into the second quarter with U.S. production over 2 million barrels of oil equivalent per day, Gorgon and Wheatstone LNG running at full rates, 1 million barrels of oil equivalent per day, and U.S. refineries operating at record crude throughput. The unique combination of Chevron Corporation's industry-leading refining complexity and our diverse waterborne equity crudes from TCO, Guyana, Permian, Venezuela, and Argentina creates opportunities for value capture through integration. Our high-quality upstream and downstream portfolios delivered significant integration benefits during the quarter.

We maintained strong supply into tight markets and maximized margins across products, including fuel oil, sulfur, and other secondary products which saw significant price dislocations. We continue to optimize flows across our value chains to maintain high utilization and reliable supply into the market. In the second quarter, we expect global equity crude throughput to more than double year over year to 40%. In Asia, we anticipate over 80% refinery utilization. Moving to Venezuela, we continue to leverage our deep expertise and long-standing position to create an option for the future. Two weeks ago, we announced an asset swap with PDVSA. The agreement increases our position in the Orinoco.

Ayacucho 8 expands our continuous acreage position with Petro PR, offering operating and development synergies along with long-term growth potential and optionality. Petro Independencia is a joint venture we have been in for more than fifteen years where we have increased our equity stake to 49%. Current operations are running smoothly. We are still in debt recovery mode and expect Venezuela to continue to represent 1% to 2% of cash flow from operations. This transaction is expected to improve resource depth and integration upside, supporting potential growth into the future. Now over to Eimear to discuss the financials.

Eimear P. Bonner: Thanks, Michael. For the first quarter, Chevron Corporation reported earnings of $2.2 billion or $1.11 per share. Adjusted earnings were $2.8 billion or $1.41 per share. Included in the quarter was a $360 million charge related to a legal reserve. Foreign currency effects decreased earnings by $223 million. Organic CapEx was $3.9 billion in the quarter, consistent with historical CapEx trends of lighter spending in the first half of the year. Inorganic CapEx was approximately $200 million. We expect to finish within full-year capital guidance. Adjusted first quarter earnings were $440 million lower than last quarter. Adjusted Upstream earnings increased due to higher realizations, lower DD&A, and favorable OpEx and tax impacts.

Adjusted Downstream earnings decreased primarily due to unfavorable timing effects, which were partly offset by higher refining margins. Unfavorable timing effects totaled around $3 billion for the quarter, reflecting a steep rise in commodity prices in March. The effect was evenly split between inventory valuation and mark-to-market accounting on paper derivative positions linked to physical cargoes. We anticipate approximately $1 billion of the paper positions to unwind in the second quarter, with the majority of related cargoes delivered in April. Looking forward, we would expect additional timing effects when prices are rising and further unwinds when prices are falling. Chevron Corporation generated cash flow from operations, excluding working capital, of $7.1 billion in the quarter.

This includes unfavorable impacts from special items and timing effects totaling approximately $3 billion. Adjusted free cash flow was $4.1 billion for the quarter and included a $1 billion loan repayment from TCO. Share repurchases were $2.5 billion, in line with guidance. Working capital was impacted by sharp commodity price increases, as well as a build in inventory. Consistent with historical trends, we expect an increase in working capital in the first half of the year and a release in the second half, the extent of which will be primarily driven by prices. Over the period, more than $5 billion in paper was issued to manage liquidity and general business needs.

About half has already been paid down in April, and we expect these short-term balances to decline further throughout the second quarter. First quarter 2026 oil equivalent production increased by approximately 500 thousand barrels per day compared to 2025. This reflects the integration of legacy Hess assets in addition to continued organic growth across the portfolio. The conflict in the Middle East had a limited impact on production in the quarter, with less than 5% of our portfolio located in the region. In the Partitioned Zone, we are operating at near-minimum rates to manage storage. In the Eastern Mediterranean, both Tamar and Leviathan are operating at full capacity.

During the quarter, we continued to execute key expansion projects, completing the offshore scope for both the Tamar optimization project and the Leviathan third gathering line. Let me close by reinforcing that despite changes in the external environment, we are executing our plan with discipline, consistent with our long-standing financial priorities. This disciplined approach gives us resilience during periods of volatility and the ability to invest and return cash to shareholders through the cycle, all while ensuring we maintain a balance sheet built for the long term. Chevron Corporation’s business is strong, and our 2026 guidance is unchanged.

Capital spending and production outlooks are consistent with previous guidance, and we are on track to deliver our $3 billion to $4 billion structural cost reduction target by year end. This consistency underpins our 2030 targets announced on November 9, including over 10% growth in adjusted free cash flow and earnings per share and a 3% improvement in ROCE, all at $70 Brent. These are not aspirational goals. They are grounded in assets that are operating today, a more efficient organizational model, and continued capital discipline. I will now hand it off to Janine.

Janine Wei: Okay. That concludes our prepared remarks. Thank you, Michael, Eimear. As a reminder, additional guidance can be found in the appendix of the presentation, as well as in the slides and other information that is posted on chevron.com. We will now open the call for questions. We ask that you please limit yourself to one question, and we will do our best to get all of your questions answered. Katie, please open the lines. Thank you.

Operator: If your question has been answered or you wish to remove yourself from the queue, please press 2. If you are listening on a speakerphone, we ask you please lift your handset before asking your question to provide optimum sound quality. Again, if you have a question, please press 1 on your touch-tone telephone. Our first question comes from Neil Mehta with Goldman Sachs.

Neil Singhvi Mehta: Yes. Thank you, Michael and Eimear, and welcome back, Janine. Michael, I would love your perspective on the current conflict in the Middle East and, if you could, share how you think about this in the context of your four-decade history in oil and gas. How significant of a moment is this, what do you think the long-term implications are of the current conflict, and I know at the Analyst Day in November we talked about a flat nominal $70 Brent as a mid-cycle planning assumption, but does this event change the way you think about mid-cycle pricing?

Michael K. Wirth: Thank you, Neil. This is clearly a very significant disruption to the global energy system. It is a scenario that we have thought about and included in some of our planning exercises for many years. It is early to have firm conclusions about how the energy system will change in the long term. I do think there will be changes, but we have to see how things play out over the coming weeks, hopefully not longer than that, as this comes to some sort of a resolution and the energy system begins to be reconstituted in a way that can reach some new equilibrium.

I think that new equilibrium will look different than what we have known before, but I am not sure I could argue with a lot of confidence that I could describe exactly what that looks like. One thing you can expect from us is consistency. You will see capital and cost discipline no matter what. You will see us invest in highly competitive assets with scale and longevity—assets that are low on the cost curve. You are going to see us invest to drive strong returns and free cash flow, maintain a strong balance sheet, and create predictable and growing shareholder distributions. We have great visibility through 2030.

Eimear just reiterated our guidance for that, and we have assets online now that deliver predictable, visible cash flow growth for the balance of this decade, and we have a full hopper for beyond that. The things that Eimear talked about—consistency, discipline, and the strength of our portfolio operating today—will underpin our strategy going forward. As we see how this is resolved and what the energy system begins to look like post-conflict, if we want to fine-tune that at all, we will come back and talk to you about it.

But I really think it is early for me to give you anything concrete other than to reiterate the characteristics that in my forty-four years have stood us in good stead through unexpected events and cycles. Thank you.

Operator: Thank you. We will take our next question from Arun Jayaram with JPMorgan.

Arun Jayaram: Good morning, and thanks for taking my question. Michael and Eimear, it feels like one of the key themes from the print is the opportunity for Chevron Corporation to optimize margins from the refining system as well as your increased exposure to waterborne crudes post the Hess merger. I am looking at slide four. Could you help us think about the value-capture opportunities and maybe the experience in 1Q, and how should we think about this integration favorably impacting your go-forward earnings power?

Michael K. Wirth: Thanks, Arun. As part of the organizational changes we made last year, we set up a global enterprise optimization team. They have the remit across all of the upstream and downstream to be sure that we are getting maximum value out of the entire set of assets, and we are integrating where it makes sense. They did a really nice job in the last quarter of keeping our system operating at high utilization and capturing good margins through volatility. Our portfolio provides options to move things around in times like this. Our refineries in Asia are all in various types of ventures.

We expect those to run over 40% Chevron Corporation equity crude in the second quarter, much higher than under normal market conditions and probably much higher than we will see in some of the other refining assets in that region because we have the ability to direct equity flows to those refineries at a time when access to crude is very important and very difficult. In the U.S., we are operating over 50% equity crude throughput—some refineries much, much higher than that. We have used the Jones Act waiver to move crudes from the Gulf Coast around to the West Coast.

In Asia, in the first quarter, we ran CPC Blend, Mars, and WTI in our GS Caltex refinery in South Korea. As a point of reference, when I used to run our downstream business, we were about 15% equity crude into our refining system and 85% crudes from the market. As I said, we expect to be over 40% in Asia and north of 50%—and much higher at some refineries—in the U.S. That is a significant change from our history. At a time when margins are likely to move back and forth across the value chain—sometimes in upstream, sometimes in downstream—we will be able to capture those with a much higher degree of confidence.

Importantly, in a world that is getting very tight on products, we will keep our assets very full and be able to provide a significant supply into markets that dearly need it. We are not going to quantify the value we are capturing, but I think you will see it flow through in the numbers. It is meaningful and is continuing already into the second quarter and likely beyond. Thank you.

Operator: Thank you. We will take our next question from Devin McDermott with Morgan Stanley.

Devin J. McDermott: Good morning. Thanks for taking my question. Eimear, in your prepared remarks, you highlighted Chevron Corporation's longstanding and consistent financial priorities. I wanted to build on that a bit and get your latest thinking on capital allocation at higher prices and the balance between shareholder returns, building cash, and growth. You left the buyback range unchanged quarter over quarter, which makes a lot of sense, and I commend you for not being pro-cyclical on the buyback. Could you talk through the strategy there? And on the growth spending side, what would you need to see to shift spending—maybe add some capital in the Permian and move away from the plateau back toward growth in that asset?

Eimear P. Bonner: Yeah. Thanks, Devin. Well, overall, it comes back to staying consistent with our four financial priorities and being really disciplined through volatility. That is why today we are not changing any of our capital allocation framework. We are not changing any of our ranges, and we are happy with where we are. To recap: first and foremost, growing the dividend—and this year we have grown it for the thirty-ninth consecutive year. Second, investing in the business in the most capital-efficient way. Our budget is $18 billion to $19 billion for the year, and we are on track with that budget. Our capital performance is really strong.

With that capital, we are going to grow 7% to 10% production this year, so we are reconfirming that growth. Third is the balance sheet. The balance sheet is in great health and will get stronger with higher cash generation. Fourth is the buyback—staying within the $2.5 billion to $3 billion per quarter range. With only eight weeks into the conflict, as Michael said, it is too early to have a different view on the fundamental outlook around price or to see whether that is structurally changing. When it comes to capital allocation, we are comfortable with where we are, and we are staying consistent and disciplined.

Michael K. Wirth: Thanks, Devin.

Operator: Thank you. We will take our next question from Doug Leggate with Wolfe Research.

Doug Leggate: Thank you. Good morning, everyone. Michael and Eimear, I wonder if I could follow up on Devin's question and ask for a little bit more color around two specific assets. You had some changes in Venezuela, Michael. My understanding is that has been running essentially as recycling cash flow to maintain the business and pay down your legacy debt and so on. Are you at a point now where the fiscal terms have changed, the security situation is different—basically, the broad picture for Venezuela—where you would be prepared to incrementally put more capital? I would ask the same question of the Permian where not so long ago you had a growth story. You stabilized it.

One could argue that in both of those areas there might be a call for incremental oil production longer term, and you are in a strong position to deploy capital if you did. So it is a capital increase question, but specific to those two assets.

Michael K. Wirth: Doug, what I would say, number one, is we are operating now, as I mentioned in my prepared remarks, with TCO greater than 1 million barrels a day, Permian solidly above 1 million barrels a day, the Australian LNG facilities running at full capacity, Gulf of Mexico. All the big pistons in the engine are firing. As we come into the second quarter, we have tremendous momentum across the system. Production in the second quarter is expected to be higher than in the first quarter. Eimear reiterated 7% to 10% production growth guidance for the year. We have strong growth in the business right now and a portfolio that presents us with options.

As Eimear said in response to Devin, it is early into this conflict to be making big changes. We do not know how things will be resolved. You could build a scenario where things get resolved quickly, the Strait reopens, and we get back into a market that is well supplied. You can build another scenario where this goes on, the market is tighter, and it looks different on the other side. I do not know exactly how this will play out, so we are not going to make rash or immediate changes to a system that is running at a high degree of capital and operating efficiency today.

It is really important to stay focused on reliability and safety at a time like this. Specific to Venezuela, your understanding is right. We are still recycling cash flow. We still have debt to recover. We are recovering at a faster rate in this price environment. There are indicators of positive developments in the country, but there are still questions. The fiscal terms are not clear. There are ranges that have been indicated for tax and royalties. There are still things that need to be addressed relative to dispute resolution, etc.

We will continue to operate in the mode we are in right now, which has yielded some growth over the past couple of years and, in fact, growth this year, but we need to see further progress before we would put more capital to work. We have a lot of resource there, and we could grow it. In the Permian, we are running to deliver strong free cash flow right now. We could hit the gas and begin to grow it again, but I do not know what the future looks like.

The value we are seeing in improved asset reliability and reduced lost production to downtime, etc., is very real, and we get that because we are so focused on it. A shift to quickly turn to more production growth might dilute that focus. We will update you over time if our view on these things changes, but for now, it is steady as she goes.

Operator: We will take our next question from Steve Richardson with Evercore.

Stephen I. Richardson: Hi, good morning. Thank you. Michael, I was wondering if you could talk a little bit about the exclusivity agreement with Microsoft on the power projects. You have been at this for a while. No doubt you have learned some things, and it has been a journey dealing with a different type of counterparty in a different industry. Could you update us on time to clarity on contracts, FID, and those items?

Michael K. Wirth: It has been reported, and we have confirmed, that we are in exclusive discussions with Microsoft right now. We are very pleased to be in those discussions with such a high-quality customer. It is a company we know well. They have been a partner of ours for a long time. They are our primary cloud provider and a key technology provider for many years. We have a deep and very good relationship with Microsoft. The project we are advancing in West Texas is progressing well. We have submitted an air permit. We have secured not only the large turbines we talked about before, but also small-block generation that is useful in early scale-up and for reliability.

We have selected an EPC who is doing engineering work. We have agreed with a water provider, etc. We are advancing the project with pace and are beginning to take delivery on turbines this year. Subject to definitive agreements, which we are in negotiations for, we will move towards FID later this year and deliver a project with speed, scale, and differentiation. We will remain disciplined on returns. The negotiations thus far look like we can find a place to meet where Microsoft’s expectations on power prices and our expectations on return on investment can both be satisfied. We will likely have more to say about this on the next call. Stay tuned.

Operator: Thank you. We will take our next question from Biraj Borkhataria with Royal Bank of Canada.

Biraj Borkhataria: Hi there. Thanks for taking my question. I wanted to follow up on Venezuela again. The situation is evolving quickly. At the start of the year, comments from the U.S. administration were essentially around all the companies not looking backwards at the receivables balance and looking forward, and then more recently you and some of your peers have been talking about the potential to get some of that paid back. How should we think about a reasonable timeframe to assume for you to get your couple-billion-dollar receivables balance back?

Michael K. Wirth: Biraj, we came into the year with, in round numbers, something close to $1.5 billion in a receivable. The rate at which that gets paid down is somewhat a function of price, and we are receiving it faster this year than last year. I think we will still carry some sort of a balance as we get to the end of this year, but much lower than where we are at. I think that would probably be fully paid off at some point in 2027. Subsequently, we would update you on the model for cash distributions going forward.

By the time we get to 2027, some of the open questions I referred to earlier relative to tax, royalty, contract terms, etc., are likely to be clarified, and we will be able to give you more guidance on what we might do relative to capital investment. In any scenario, we remain the advantaged incumbent with people on the ground, operations, supply chains, and contract resources that put us in a very good position to be a big player there, presuming we see further progress.

Operator: Thank you. We will take our next question from Sam Margolin with Wells Fargo.

Sam Margolin: Good morning. Thank you for taking the question. I appreciate that visibility on the long term is limited right now. In the near term, there are extraordinary things happening too. Localized shortages could start to become an issue in some places that you operate in the next couple of months depending on how the situation plays out. Chevron Corporation is exposed to these idiosyncratic market events not just in regular operations, but also in the way you manage the supply chain. In the context of the timing effect in 1Q and the derivatives exposure, has anything changed, or are you adjusting your operating posture within this highly volatile environment?

Michael K. Wirth: Sam, it is an unusual environment. We have experience working in unusual environments. In 2020, we saw the inverse with the collapse of demand and excess supply. In 2022, we saw a version of this when the conflict in Ukraine began. We have a playbook to deal with these things. You work on optimizing supply into these markets. You look at your financial exposures and counterparty circumstances and manage your risks. The timing effects that were reported are the kinds of things you expect in a market like this and the kinds of things we have seen before. There was a big run-up in crude over the course of the quarter.

Things that normally do not appear relative to derivatives become very evident in a market like that. In a market that goes the other way, you see those effects go the other direction. I would not overreact to anything in our numbers. We are very focused on supply in the markets. In Asia, where there are clearly some of the nearest-term stresses, we are working to keep our refineries running at what I would argue is probably the highest degree of utilization of anybody out there because we can direct crude into those refineries. I gave examples of crudes we have moved there.

We can take crudes that would normally go into our U.S. refineries—we have good substitutions available—and move other crudes we have access to into Asia. We are very sensitive to maintaining supply into tight markets and to the implications for customers and counterparties. It is a dynamic situation, but we have an organization that is very experienced in managing through unpredictable and dynamic markets. I am very confident that we can manage those exposures well.

Operator: Thank you. We will take our next question from Betty Jiang with Barclays.

Betty Jiang: Good morning, Michael, Eimear. Thank you for taking my question. I want to ask about TCO. In your prepared remarks, you mentioned that TCO is producing above 1 million BOE per day, so that is above your nameplate capacity and coming back from the disruptions you saw in 1Q. Can you speak to where that asset is performing, what is driving that outperformance, and maybe the debottlenecking opportunities? While we are on this topic, Michael, could you give us an update on how the renegotiation contract conversation is going?

Michael K. Wirth: Sure, Betty. First, TCO returned to full service in March following repairs on the electrical system in February, and there were some adverse weather dynamics in the Black Sea in early March. We have two out of the three single-point moorings available at CPC, with the third one later this year. With two, we can handle full flow on the pipeline. The pipeline is running full. The plant is running full. We have done a lot of maintenance work, and we expect the plant to be near full availability for the remainder of this year. You mentioned the debottlenecking work we did late in 2025. We now have that running in its new configuration. Early performance has been very encouraging.

I do not think we have enough run time yet to give you specific guidance. We need to see more operational data, but you can expect on the next call that we should give you an update on that. At times like this, when the market signals are to run all assets as strongly as possible, that is what is happening at TCO. We continue to see the benefits of a centralized control center optimizing all the different generations of processing capability and finding white space—the opportunity to squeeze more production through those assets. It is a very complex optimization equation, and we have new tools to do that in ways we never had before.

I am encouraged by what we are seeing thus far, and we will give you more guidance next quarter. On the concession, we are making good progress in the discussions. We are working closely with all partners in the venture and the Republic. There are technical and commercial teams established, and all partners and government representatives are actively participating in the process. This has ensured that we keep everyone aligned and proceeding on the same path, and it is moving along. Later this year, we will give you an update. This venture has created enormous value for all stakeholders—the partners and the Republic—over the last thirty-three years. We are working toward a solution that will continue that history.

Final point on TCO overall: our guidance of $6 billion in free cash flow this year is unchanged at $70 Brent. That accounts for the operational issues in the first quarter and what we are seeing today. Obviously, at higher prices, we will see stronger results this year. Thanks, Betty.

Operator: We will take our next question from Lucas Herrmann with BNP Paribas.

Lucas Oliver Herrmann: Thank you. Touching on the LNG business briefly, the market is tighter. How much flex do you have across your portfolio to take advantage of arbitrage or other opportunities that may be emerging, and how much production is not effectively committed?

Michael K. Wirth: Thanks, Lucas. We ended last year with a portfolio that is about 16 million tons per year, the majority out of Australia. We have 40 TCF of resource and access to strong and growing demand in Asia. Globally, our portfolio is about 80% long-term oil-linked contracts and about 20% exposed to the spot market. We like that over time. Coming into this year, with some expectations for length in the LNG market, people would have said that is a good place to be. When spot prices get very strong, obviously you would like to have more spot. We have to look our way through those cycles.

Our oil-linked contracts, which have a lag, do not show a lot of the current market environment in the first quarter. You can expect in subsequent quarters to see that flow through into pricing on that 80% of our volume, and the 20% sold under spot contracts is seeing the kinds of prices you have seen in the market recently. We just sold our first U.S.-based cargo, and that will grow by 2030 to another 4 million tons per annum, taking us up to 20. That cargo was sold into Europe on spot-based prices. Wheatstone and Gorgon are at full rates, same in West Africa. We are seeing the benefits of this, and the proportions are as I described.

Operator: Thank you. We will take our next question from Manav Gupta with UBS.

Manav Gupta: Good morning. I wanted to shift to chemicals. Globally, we are seeing naphtha crackers run dry because there is not enough naphtha. Your portfolio is very U.S.-centric. There is a bit in Korea with 15%, but mostly the capacity is in the U.S. We are hearing they are pushing for a $0.20 per pound polyethylene price hike. We ended 4Q at record low historic margins, but February could be over mid-cycle. Can you talk about that and how you benefit?

Michael K. Wirth: Sure, Manav. Our exposure to petrochemicals is primarily through Chevron Phillips Chemical, and also some through GS Caltex in Korea. CPChem is very much tilted toward ethane-based cracking in North America and some in the Middle East. GS Caltex is liquids cracking, but it is derived from its own refining flows and so not reliant upon naphtha supply out of the Middle East. We have seen strong price moves, particularly in the olefins chain, which is where most of our exposure is. Those price moves are predominantly here in the second quarter, so you do not see much of that in the first quarter.

Chain margins have significantly improved from very low levels last year to what now are likely better-than-mid-cycle chain margins. For assets that are up and running in parts of the world where you are cracking advantaged feedstock—certainly North American ethane—there should be pretty good margin capture in those businesses.

Operator: We will take our next question from Jean Ann Salisbury with Bank of America.

Jean Ann Salisbury: Hi, good morning. I wanted to get your latest thoughts on the Bakken—whether initiatives to lower costs have given you more conviction that it is core in your portfolio and whether higher oil prices may have increased the interest from others in owning that asset?

Michael K. Wirth: The Bakken assets have been running well. We have said you should expect to see a couple hundred thousand barrels a day production there at a plateau. First quarter was a little below that, primarily due to weather effects. We have brought down the rig count to three from four. We are drilling longer laterals. We think we can sustain production that way and fully utilize existing infrastructure, driving strong free cash flow. We are applying best practices from our portfolio and bringing in some of Hess’ practices, as we did from Noble and PDC. This is a more liquids-weighted position in shale, and strong liquids pricing makes it perform very well.

We have had interest from others since we announced and closed the deal. We want to see a little more operating data and really understand the asset. We underestimated the quality of the DJ when we acquired Noble, and thankfully we did not sell it quickly. Here, we want to fully appreciate the value we have in the Bakken. As an example, we are testing advanced chemicals to improve recovery in the Bakken today—things we have been doing in the Permian and DJ. Early response looks good.

To the extent we have ways to improve recovery and value and maybe do some things that are not available to others, we ought to be able to drive more value than a buyer potentially could. It is performing very well. We are pleased with it, and we are in no hurry to do anything other than improve it. In due course, like every other asset, we will ask how it fits for the long term, but it is premature to ask that today.

Operator: Thank you. We will take our next question from James West with Melius Research.

James West: Good morning, Michael, Eimear, and Janine. I wanted to dig in on your Eastern Mediterranean assets. Given the conflict near that region, those assets seem much more valuable now. As we think about Leviathan, Tamar—which you operate—and then Aphrodite, where you are not the operator but are heavily involved, how are you thinking about those assets going forward? There is a lot of natural gas that needs to get to many places in the region for energy security and other purposes.

Michael K. Wirth: Broadly speaking, James, I agree. We have liked these assets from the start. That is why we are investing in expanding production at both Tamar and Leviathan, making good progress on those projects with ramp-up this year of another 600 million cubic feet per day of production on a 100% basis, and a longer-term expansion of Leviathan underway. We took FID on that in January and are excited about it. We have begun FEED work at Aphrodite. This is high-quality, clean biogenic gas. Demand for gas in the region continues to grow. Supply reliability everywhere is a priority.

The markets we are feeding are growing, the resource quality is high, and the asset quality—credit to Noble’s engineering and design—continues to impress us. We view the Eastern Med as an area with growth potential. We have exploration activity there. You can think of it as a big gas hub with a lot of resource discovered and more to be discovered. We are pleased with our position and you can expect us to continue pursuing exploration and development opportunities over time.

Operator: We will take our next question from Bob Brackett with Bernstein Research.

Bob Brackett: Good morning. You mentioned that Chevron Corporation has a playbook to deal with supply shocks. Governments around the world also dust off playbooks during supply shocks. What government policies are helpful during a supply shock, and which are perhaps unhelpful?

Michael K. Wirth: You are right, Bob. There are policies that help and those that do not. Broadly speaking, we have a supply challenge in the world. Policies that encourage, enable, and facilitate the ease of supply are helpful. Examples: releases of strategic reserves clearly put oil into the market that would not otherwise be there. In the U.S., we have seen the waiver of the Jones Act, allowing us to use ships that otherwise could not trade to move supplies where they exist to where they are needed—good move. We have seen moves to relax specifications, which enable movement of needed products that otherwise could not move.

Another one is the use of the Defense Production Act to enable some offshore California production to come into service and get into the market. We are working with the operator of that asset to get it to our El Segundo refinery to meet local needs. California is the state where the supply pinch is being felt first and most acutely, and it has flowed through to the street. These actions have been positive in creating supply and flexibility in the system. Actions that can be unhelpful are price caps, which do not allow the signal to use energy efficiently to flow through the economy and can discourage creation of supplies.

Export bans can constrain supplies that would otherwise flow to the places that need them most and make the situation worse. And windfall taxes—history shows they do not generate as much revenue as advertised and send unhelpful signals about future investments, slowing the supply response in the medium term and creating future vulnerabilities. We are engaged with governments to discuss these policies, encourage those that help, and caution about those that may not. A company like ours, with a large diverse portfolio, is not overly exposed to a potential bad policy decision in any particular market due to our broad footprint. Thanks, Bob.

Operator: We will take our next question from Philip Jungwirth with BMO.

Phillip J. Jungwirth: Thanks. A lot is going on in the world right now, but I wanted to ask about U.S. climate litigation because that has been an overhang for the industry. We might get some clarity with the Supreme Court taking up the issue with the Colorado case, but how much do you think this could settle the question around state versus federal jurisdiction and advance the whole climate debate in the U.S.?

Michael K. Wirth: We are not a party to that litigation, Phil, so I cannot comment too specifically. We are party to another case that was just heard by the Supreme Court and concluded that a case that had been heard in state court really should be removed to federal court. The principles are somewhat analogous: this is a matter for federal courts to decide, in our view. In fact, it is truly a matter for elected officials to decide and establish climate policies that appropriately reflect the sentiment of the public and the interests of the nation. Cities, counties, and states are not the appropriate place for climate policy to be established nor for climate issues to be subject to litigation.

We are hopeful that the case that makes it to the Supreme Court provides clarity at the federal court level. We have seen mixed views come out. This matter would benefit from clarity that emerges from the highest court in the land. More to follow. Thanks, Phil.

Operator: We will take our next question from Nitin Kumar with Mizuho.

Nitin Kumar: Hey, good morning, Michael and Eimear. Thanks for taking my question. Back in November, you gave us an update on your exploration program, setting up the company beyond 2030, including potential options in new countries. Given the events of the last eight weeks, any change to the pecking order of those priorities or anything you are prosecuting faster to get oil to market?

Michael K. Wirth: No, it really has not changed. Exploration is a longer-cycle activity. We have a diverse portfolio, which is valuable in current circumstances. We do have some opportunities in the Middle East region, but we also have a number of opportunities we are highly interested in outside the Middle East. The world needs energy supply long into the future, so we need to continue to look for resource around the world. We are pleased with the portfolio we have built, the new talent that has joined the company, and the different model under which we are making decisions now. We are using new technologies to improve both cycle time and success of our exploration program.

You can expect to see those continue. We have increased our financial commitment as well. This discussion will occur over the next number of years. If we are not changing activity levels in the Permian in response to the last few weeks of disruption—where there are shorter-term handles to pull—then longer-cycle exploration does not get affected by this in the short term. Thank you.

Operator: We will take our next question from Jason Gabelman with TD Cowen.

Jason Daniel Gabelman: Thanks for taking my question. You have guided to your equity affiliate distributions being at about 70% of the full-year guide by the end of 2Q. I am assuming some of that is related to higher oil price. Is the relationship between equity distributions and the oil price linear? Do you have a rule of thumb to help the market think about potential upside as a result of what we are seeing?

Eimear P. Bonner: Yes, Jason. As Michael talked about, we are coming into the second quarter with a lot of strong momentum at our affiliates, starting with TCO back at full rates and testing the upside of capacity. CPChem is also contributing, Angola LNG is full. Those are examples of tailwinds and the strong momentum we have, which is why we were able to increase our affiliate distribution guidance today. It is over $2 billion more relative to the first quarter because of the confidence we have in performance. Another thing I would mention is TCO has already changed their distribution schedule. They are now paying us dividends monthly. We already have the first one in the bank in April.

Those actions, coupled with operational momentum, are why the guidance is raised. The guidance is at $60. There is a lot of upside here depending on how prices unfold. Thanks for the question.

Operator: Thank you. We will take our final question from Geoff Jay with Danielle Energy Partners.

Geoff Jay: Hi, everyone. A follow-up to Bob Brackett’s question about California specifically. There has been a lot written about its reliance on imports and low inventory levels. As an operator of refineries in the state, have there been other relief valves—has the Jones Act helped? Are there other operational changes you have made to make sure that market is adequately supplied?

Michael K. Wirth: You referred to what I have referred to. The ability to bring new production offshore from Platform Irene onshore and make sure that is getting into the California market—California oil through a California pipeline to a California refinery to California customers—that was not happening just a few months ago. Same thing with the Jones Act: we can bring crude oil or products from the Gulf Coast that are needed in California. There are special specifications to hit, so perhaps blend stocks would come around. We are very sensitive to our customers in California and the circumstances there.

You are well aware of what California’s policies have delivered to the state: an oil industry in decline, whether upstream production or refining, where we have seen a couple of refineries shut down this year. That has constrained supply capability. At a time when the world is feeling constraints, California is reliant upon supplies from other parts of the world which may be needed to keep their own economies going. It is a real dilemma for the state. We are doing everything we can to meet our supply obligations there, but it points out the vulnerabilities created in California as a result of decades of poor energy policy. Okay, Katie.

It sounds like that was the last person in the queue. Is that correct?

Operator: That is correct. No additional questions in queue at this time.

Janine Wei: I would like to thank everyone for your time today. We appreciate your interest in Chevron Corporation and your participation on today’s call. Please stay safe and healthy. Katie, back to you.

Operator: Thank you. This concludes Chevron Corporation's first quarter 2026 earnings conference call. You may now disconnect.