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Chevron expects 2025 oil and gas production to rise 6-8% from 2024's 3.34 MMboe/d, according to executives on Jan. 31.

Chevron Forecasts 2025 Permian Production to Climb 9-10%

Chevron Corp., Houston, is forecasting 2025 total oil and gas production will climb. This is 6-8% from last year’s nearly 3.34 MMboe/d, executives said Jan. 31. Analysts expect that growth to pick up in the second half of 2025. Well, all thanks to projects in the Gulf of Mexico and Kazakhstan, but operators in the Permian basin also expect to grow production by about 10% despite receiving less investment. Ready to learn more on Chevron Forecasts 2025?

Mike Wirth, chairman and chief executive officer, and Eimear Bonner, chief financial officer, spoke after Chevron reported its fourth-quarter results—net income of $3.24 billion on revenues of $52.2 billion—and stated that they are focused on capital efficiency and expect to grow Chevron’s free cash flows by $2 billion by the end of 2026.

Lower capital spending will be part of that: Chevron totaled $15.8 billion in capex in 2023 and $16.4 billion last year, investing in projects that helped the company set oil and gas production records, driven in part by the Permian basin output climbing 18% in 2024.

This year, total capex is projected to be about $15 billion. This is with operations in the Gulf of Mexico (Chevron has begun using the ‘Gulf of America’ name instituted by the Trump administration). Moreover, Central Asia is getting more money and Permian assets receiving less (OGJ Online, Dec. 6, 2024). Executives’ initial range for 2026 capex is $14-16 billion.

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Source: Oil & Gas Journal

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Oil and gas execs

Oil and gas execs optimistic as Trump returns, Dallas Fed says

In the aftermath of President-elect Donald Trump’s victory in November, executives within the oil and gas execs and sector have expressed a renewed sense of optimism. This is regarding their companies’ future prospects. This sentiment shift is a highlight in the latest energy survey by the Federal Reserve Bank of Dallas. It says that 57 percent of industry leaders anticipate an increase in capital spending for 2025 compared to the previous year. This positive outlook reflects a broader confidence in the regulatory and economic environment that the incoming administration may create, suggesting that executives feel more empowered to invest in growth and development initiatives that could enhance operational efficiency and expand production capabilities.
However, the survey results also indicate a contrasting perspective among larger producers in the industry. Notably, 50 percent of executives from these major companies, which are defined as those producing 10,000 barrels or more per day, projected a decline in spending for the current year. Conversely, only 36 percent indicated that their capital expenditures might see a slight uptick. This divergence is particularly significant, as large producers are responsible for approximately 80 percent of the United States’ total oil and gas output, meaning their investment decisions have far-reaching implications for the overall health of the industry. The cautious stance among these larger firms could signal a careful approach to navigating potential market fluctuations, regulatory changes, and evolving demand dynamics in a post-election landscape.

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Source: E&E News

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Oil Driller Increases '24 Production Target on Permian Success

Another Driller Increases ’24 Production Target on Permian Success

Ovintiv Inc., one of the leading oil driller companies in the shale drilling sector, has recently updated its production forecast for 2024, marking itself as the second oil and gas company to make such an adjustment this year. The firm now projects a production range of between 570,000 and 580,000 barrels of crude oil per day, a notable increase from its previous estimate, which ranged from 545,000 to 575,000 barrels. This revision, calculated from the midpoint of the newly established range, indicates a 2.7% increase in anticipated production levels. Furthermore, Ovintiv has also raised its target for the oil and condensate segment, adjusting it upward by approximately 1%, with a goal of reaching around 208,000 barrels per day. This strategic adjustment reflects the company’s confidence in its operational capabilities and the overall market conditions.

Ovintiv’s decision to enhance its production outlook follows a similar move by Matador Resources Co., highlighting a trend among U.S. drillers who are cautiously navigating the current energy landscape. While many companies are focusing on maintaining stable or modest growth in output, this shift in forecast underscores Ovintiv’s strategic emphasis on maximizing production efficiency while balancing capital allocation to shareholders. As the industry gradually transitions towards a more disciplined approach to growth, Ovintiv’s proactive stance may position it favorably for future opportunities, enabling the company to strengthen its drilling assets and enhance shareholder returns in a competitive market environment.

Oil Driller Performance

The performance of oil wells in the prominent Permian Basin, which extends across Texas and New Mexico, has consistently surpassed industry expectations, presenting a complex challenge for the Organization of the Petroleum Exporting Countries (OPEC) and its allies. These countries have been actively engaged in a strategic effort to gradually unwind coordinated production restrictions that were initially implemented to support and stabilize crude oil prices in response to volatile market conditions. However, the unexpected surge in output from the Permian Basin may complicate these efforts, as increased production can lead to an oversupply in the market, potentially undermining the pricing strategies that OPEC and its allied nations have meticulously crafted. This development raises questions about the sustainability of current pricing levels and may prompt OPEC to reconsider its production policies in light of the new dynamics introduced by the Permian’s robust performance.

Production Comprises Oil and Condensate

In the context of this evolving market landscape, Ovintiv, a prominent player in the region, has strategically positioned its production portfolio to capitalize on the diverse hydrocarbon resources available in the Permian Basin. Currently, approximately one-third of Ovintiv’s production comprises oil and condensate, while the remaining two-thirds consists of natural gas and natural gas liquids. This balanced approach not only allows the company to mitigate risks associated with fluctuations in oil prices but also aligns with the growing demand for natural gas as a cleaner energy alternative. By maintaining a diversified portfolio, Ovintiv is well-positioned to navigate the complexities of the current market environment, adapting to changes in consumer preferences and regulatory landscapes while contributing to the ongoing discourse around energy production and sustainability in the context of the larger global energy transition.

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Source: World Oil

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Chevron Corp. beat earnings estimates and raised dividends after posting record oil and natural gas production.

Chevron beats earning estimates following “record” oil and gas production

Chevron beats earnings estimates and raised dividends after posting record oil and natural gas production, boosting Chief Executive Officer Mike Wirth’s effort to rebound from a year of missed performance targets.

Adjusted earnings of $3.45 a share exceeded the Bloomberg Consensus estimate by 23 cents. Chevron raised its dividend by almost 8% to $1.63 a share, also ahead of forecasts.

The No. 2 U.S. oil and gas operator incurred $3.7 billion of charges stemming mostly from assets in its home state of California and the dismantling of decades-old infrastructure in the Gulf of Mexico. Annual production climbed 4%, primarily boosted by rising output in the Permian basin and other U.S. fields.

Shell Plc was the first member of the oil and gas industry to post fourth-quarter results, announcing on Thursday $7.31 billion in adjusted net income that was more than $1 billion higher than the average forecast.

Chevron had a tough 2023 in some respects, when its stock underperformed rivals, dropping 17% amid production disappointments and cost overruns from the Permian basin to Kazakhstan. The company already has a challenged growth outlook compared to competitor Exxon Mobil Corp., and operational missteps only added to investor concerns.

CEO Wirth has raised share buybacks and orchestrated the Hess Corp. takeover to acquire, among other things, a 30% stake in Exxon’s offshore Guyana project, one of the world’s fastest-growing oil provinces.

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Source: World Oil

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