It goes without saying that 2014 was a bad year for energy stocks. Companies across the industry saw their profits and stock prices hammered last year as oil fell off a cliff. After trading around $100 per barrel at its peak last year, West Texas Intermediate crude fell all the way to $45 per barrel.

As an integrated major and one of the largest, most diversified energy companies in the world, Chevron Corporation (NYSE:CVX) fared better than most last year. But in no way was Chevron immune to the carnage in the oil market. Its stock price declined 9% last year, which lagged significantly behind the 12% gain posted by the S&P 500 Index.

However, despite all of the difficulties Chevron faced last year, investors shouldn't panic. Here's why 2015 will very likely be a better year for Chevron shareholders.

Oil recovery may be under way
Chevron's total profits fell 10% last year, to $19.2 billion. This was due almost entirely to the collapse in oil prices. Chevron's upstream business, which includes oil and gas exploration, discovery, and production, saw profits decline by 18% in 2014. This was especially problematic for the bottom line because upstream activities comprise 87% of Chevron's total profits.

However, although it may be hard to notice, there is a recovery taking place in the commodity markets lately. Oil now trades back above $50, which might not seem like a dramatic recovery, but stopping the bleeding is an important first step. Oil may have found its bottom, and any continued recovery would be great news for Chevron.

That's because Chevron has a number of high-profile projects coming on-line this year, and supportive oil prices would be a huge boost. This year, Chevron expects to take its Jack/St. Malo and Tubular Bells projects in the Gulf of Mexico to the ramp-up stage, and the Gorgon liquefied natural gas project reached a critical stage. Additionally, Chevron has another major LNG projects in Australia aside from Gorgon nearing completion: Wheatstone LNG. Gorgon is the more advanced of the two, at 90% completion. Chevron is targeting first LNG sales toward the end of the year.

Collectively, these projects will be critical to Chevron meeting its goal of as much as 3% production growth this year. Of course, if oil prices rise, Chevron's decision to keep production going will be handsomely rewarded.

Capital discipline will keep cash flow satisfactory
As one of the biggest energy companies in the world, Chevron operates a massive business. One benefit to this is that there is plenty of room to cut back in distressing times such as these. For example, Chevron announced its 2015 capital spending budget will be trimmed by 13% from 2014 levels, to $35 billion. Separately, Chevron will suspend its share buyback program this year. Chevron had previously been buying back its own stock at a rate of about $1.25 billion per quarter. Along with reducing capital expenditures, suspending the buyback will help Chevron save cash.

While it may be disappointing to see Chevron's decision to suspend buybacks, the dividend should keep investors happy. Chevron's dividend accounted for $7.9 billion of cash last year. In three months, Chevron will be due for a dividend increase to keep its streak of annual dividend raises intact. But Chevron generated just $1.8 billion of free cash flow last year, including asset sales, so the company needs to save as much cash as possible to provide a dividend boost to shareholders.

Investor Takeaway
Chevron needs a few things to go right this year in order for its turnaround to materialize. Namely, rising oil prices would be a great help. But even if oil doesn't rally, Chevron's disciplined actions to trim costs should provide enough financial flexibility to keep shareholders happy in the short term. And Chevron's line-up of major projects would greatly benefit shareholders over the long term, if oil prices can manage even a modest recovery this year.