Earnings call

Chevron Corporation Chevron Corporation · Q2 2026 call

Call heldJul 31, 2026
Time11:00 a.m. Eastern
CEOMike Wirth

What the CEO argued

Wirth's argument was that a quarter this good should be read as execution, not as weather. Brent averaged $104 and earnings nearly quintupled sequentially, but he spent his time on the things that survive a lower price: a U.S. production record and record refinery throughput, a $3 billion structural cost target hit six months early, $1.5 billion of Hess synergies delivered a year after closing at 50% above the original goal, and $8 billion of debt retired in three months. On growth he refused the obvious answer — asked twice whether the Permian goes back to growth, he said it could, then explained why it will not, because the lesson of the last decade was that these assets exist to produce free cash flow. Instead he laid out three buckets of optionality — assets in hand, new exploration entries, and 'special situations' in Venezuela, Iraq and the Tengiz concession — and called it the deepest opportunity set of his tenure. The one genuinely new business, a 2.67-gigawatt behind-the-meter power deal with Microsoft, he framed the same way: not a one-off, but a repeatable model, and one Chevron will only repeat at its return threshold.

More from Mike Wirth

What they said

What the quarter was, in his own framing
Amid geopolitical uncertainty and market volatility, Chevron delivered a strong second quarter, driven by our consistent strategy, capital discipline and strong execution.
Mike Wirth · Chairman & Chief Executive Officer
The two records he wanted on the board
In the U.S., we achieved a new upstream production record of nearly 2.1 million barrels of oil equivalent per day and record refinery throughput of over 1 million barrels per day.
Mike Wirth · Chairman & Chief Executive Officer
Both cost programmes landed six months early
At the same time, we maintained financial and capital discipline, achieving our structural cost reduction target six months early, with $3 billion of annual run-rate savings since 2024. Hess synergy benefits have also been delivered also six months early.
Mike Wirth · Chairman & Chief Executive Officer
One year of Hess, marked to the incremental dividend
We pulled value forward, capturing 50% more synergies than initially targeted, with $1.5 billion realized six months ahead of schedule. The Hess assets are generating strong free cash flow, which has been roughly double the incremental dividends, and accretive to shareholders on a per share basis.
Mike Wirth · Chairman & Chief Executive Officer
Why Chevron thinks it can sell power
The U.S. is undergoing a structural shift in electricity demand as AI accelerates, and reliable power is becoming the critical constraint. Chevron is well-positioned to address this challenge.
Jeff Gustavson · President, New Energies
What is actually signed at Project Kilby
While many data center power projects have been announced, few have secured long-term customer commitments for behind-the-meter power, and only one is at multi gigawatt scale: Project Kilby. […] We recently signed a 20-year take-or-pay power purchase agreement with Microsoft for 2.67 gigawatts of firm behind-the-meter capacity supporting its co-located data center complex.
Jeff Gustavson · President, New Energies
The returns, and that it is meant to be repeatable
Kilby is expected to deliver mid-teens returns and long-duration contracted cash flows that are independent of commodity price cycles. Importantly, Kilby provides a repeatable model.
Jeff Gustavson · President, New Energies
The quarter in one paragraph, from the CFO
For the second quarter, Chevron reported earnings of $12.1 billion, or $6.11 per share. Adjusted earnings were $12 billion, or $6.06 per share. Cash flow from operations, excluding working capital, was nearly $20 billion. Organic capex was $4.4 billion for the quarter.
Eimear Bonner · Chief Financial Officer
The capex guide, cut to the bottom of the range
We now expect to finish the year at the lower end of our guidance range of $18 to $19 billion.
Eimear Bonner · Chief Financial Officer
The debt paydown and what unwound behind it
We reduced debt by more than $8 billion, further strengthening our balance sheet and financial flexibility. Net debt to CFFO at the end of the second quarter was 0.6 times. Following the large build in the first quarter, working capital unwound by $2.9 billion as commodity prices decreased through the quarter.
Eimear Bonner · Chief Financial Officer
How much of the war actually touched production
TCO and Australia operated at or near full rates, and the impact from the Middle East conflict remained isolated to the Partitioned Zone, representing about 1% of second quarter total production.
Eimear Bonner · Chief Financial Officer
Why the cost savings are supposed to stick
We achieved $3 billion of structural cost reductions over the past 12 months, reaching our target six months ahead of schedule. […] more than 70% of the savings came from efficiency gains, underscoring the quality of the improvements delivered.
Eimear Bonner · Chief Financial Officer
The 2030 objectives, reaffirmed at prices below today's
We remain confident in the 2030 objectives we outlined last November, including annual production growth of 2% to 3%, adjusted free cash flow growth averaging greater than 10% per year and more than 3% improvement on return on capital employed, all at flat commodity prices that are lower than today.
Eimear Bonner · Chief Financial Officer
A low-capital modification that added 60,000 barrels a day at Tengiz
We are very comfortable to say today that we have successfully increased the nameplate oil capacity from 3GP or the Third-Generation Plant from the original 260 thousand barrels of oil per day to 320 thousand barrels of oil per day. So, what that means for the overall total field processing capacity: it now takes the total field processing capacity to slightly above 1 million barrels of oil per day.
Eimear Bonner · Chief Financial Officer
The Permian is being run for cash, not barrels
They are seeing huge efficiencies with this focus on sweating the assets, so not growing production, growing free cash flow. Our capital is now expected to be below $3.5 billion this year, so that's a 25% improvement in capital efficiency, capex per barrel of oil over 2025.
Eimear Bonner · Chief Financial Officer
The constraint that decides who else can do this
When we look to the future, turbine availability is tight. We have some deep relationships with GE Vernova and other manufacturers. We're already talking to them about their queues.
Jeff Gustavson · President, New Energies
Why the Permian is being held at plateau rather than grown
Could the Permian grow? 100%. But, we've learned the lessons that at some point, you want to see free cash [flow] out of these assets, and we're seeing that in significant quantums.
Mike Wirth · Chairman & Chief Executive Officer
The prize still left in a shale barrel
When you’re leaving 90% of the molecules in the ground, there's a huge incentive to figure out how to unlock all of that.
Mike Wirth · Chairman & Chief Executive Officer
The growth pipeline, sorted into three buckets
There's kind of three buckets that I think about our growth opportunities in. One are the things that are in-hand. […] The second bucket are announced business development advancements [and] some of our exploration. New entries into Libya, Suriname, Namibia. […] And then the third bucket are what I'll describe as special situations that we have some control over. Venezuela is one of those.
Mike Wirth · Chairman & Chief Executive Officer
How big Iraq could be
Obviously, potentially huge resources, third-party data on West Qurna-2 alone is gross oil potential well into the billions of barrels. It's one of the largest oil fields in the world.
Mike Wirth · Chairman & Chief Executive Officer
On the Caspian pipeline risk the market was pricing
I have a great degree of confidence that that commitment is real and that we'll see the CPC - I won't say never interrupted - but I don't think that the scenario that you pose is a highly likely scenario that there would be an extended shut-in.
Mike Wirth · Chairman & Chief Executive Officer
The exploration inventory, measured against his own tenure
I'll start by saying that this is the largest and highest quality opportunity set that we've had in years, probably in my time in this role. We haven't had this deep of an inventory of opportunity.
Mike Wirth · Chairman & Chief Executive Officer
Where the refined-product tightness actually sits
Middle distillates are really the tight spot right now. Initially, it looked like jet, now diesel. […] Products are tighter than crude around the world, and that's why cracks have widened out.
Mike Wirth · Chairman & Chief Executive Officer
Whether high prices are destroying demand
Demand destruction is not obvious to me at any significant scale. China is a black box, and so that's the big question is what's really going on in China.
Mike Wirth · Chairman & Chief Executive Officer
When Venezuela stops being a receivable
On debt recovery, we are continuing to recover our debt. We expect that by early 2027, that will be fully recovered. […] we have grown the production from those three JVs 15% over the last six months to 280 thousand barrels of oil per day, and we're anticipating that we will be able to grow up to 50% between now [start of 2026] and the end of 2028.
Eimear Bonner · Chief Financial Officer

In the order they were said. Pick a name to read only that speaker.

On the call

  • Operator — Operator
  • Jeanine Wai — Head of Investor Relations
  • Mike Wirth — Chairman & Chief Executive Officer
  • Jeff Gustavson — President, New Energies
  • Eimear Bonner — Chief Financial Officer
  • Devin McDermott — Analyst, Morgan Stanley
  • Neil Mehta — Analyst, Goldman Sachs
  • John Royall — Analyst, Piper Sandler
  • Doug Leggate — Analyst, Wolfe Research
  • Arun Jayaram — Analyst, J.P. Morgan
  • Steve Richardson — Analyst, Evercore ISI
  • Biraj Borkhataria — Analyst, RBC
  • James West — Analyst, Melius Research
  • Sam Margolin — Analyst, Wells Fargo
  • Manav Gupta — Analyst, UBS
  • Jean Ann Salisbury — Analyst, Bank of America
  • Betty Jiang — Analyst, Barclays
  • Nitin Kumar — Analyst, Mizuho Securities
  • Bob Brackett — Analyst, Bernstein Research
  • Jason Gabelman — Analyst, TD Cowen
  • Phillip Jungwirth — Analyst, BMO

About these quotes

Every passage above is quoted verbatim from Chevron Corporation's Q2 2026 earnings call of Jul 31, 2026, checked against the recording's transcription word for word. Chevron webcasts its quarterly results call and publishes its own edited transcript of it on the company's investor relations site; the webcast replay and that document are the authoritative record of what was said. The passages below are quoted from the call, not reproduced from it — each one has been checked word for word against Chevron's published transcript, and the full text is not republished here. For the complete call, use Chevron's own replay and transcript, both linked from this page. Figures spoken on a call are management's own and are checked against the release before they are used anywhere else on this site.