Chevron pairs record output with lower Q4 profit

Q4 earnings slip as volumes surge to record levels

Chevron reported fourth-quarter 2025 earnings of $2.77 billion, or $1.39 per share, down from $3.24 billion a year earlier, as lower crude prices and Hess-related severance and deal costs weighed on results. Revenue declined 10% to $46.79 billion. On an adjusted basis, excluding these items, earnings were $3.0 billion, or $1.52 per share, ahead of expectations. Despite the profit decline, total production jumped more than 20% year over year to 4.05 million barrels of oil equivalent per day, setting new records, with Hess assets, the Permian Basin and the Gulf of Mexico all contributing to the increase.

CFO Eimear Bonner said fourth-quarter cash flow from operations was $10.8 billion, including $1.7 billion from a working capital drawdown. Organic capital expenditures were $5.1 billion in the quarter, and full-year organic CapEx was in line with guidance, while inorganic spending was mostly tied to lease acquisitions and new energies investments. Chevron ended the year with a net debt coverage ratio of 1x, repurchased $3 billion of shares in the quarter at the high end of guidance, and lifted its quarterly dividend by 4%, with management noting more than $100 billion in dividends and buybacks returned over the last four years.

Record 2025 output and 2026 growth ambitions

Chairman and CEO Mike Wirth described 2025 as “a year of execution,” highlighting record production globally and in the U.S. The company completed the Future Growth Project at Tengiz, which added 260,000 barrels of oil per day, and brought online the Ballymore and Whale projects while ramping up Anchor in the Gulf of Mexico. Chevron also reached roughly 1 million barrels of oil equivalent per day in the Permian and is targeting 300,000 boe/d in the Gulf of Mexico by 2026. Bonner said 2025 was the highest full-year worldwide and U.S. production in Chevron’s history, with net oil-equivalent production growth at the top end of the firm’s 6%–8% guidance range excluding Hess.

Looking ahead, Chevron outlined expectations for continued production growth in 2026, driven by project ramp-ups, a full year of Hess assets and efficiency gains in shale operations. Bonner said growth in high-margin assets is anticipated to support a 7%–10% year-over-year increase in production in 2026, excluding asset sales. At Tengizchevroil, Wirth addressed a recent temporary power distribution issue that led to a precautionary production recycle, saying early production had resumed and that most plant capacity was expected online within a week, with unconstrained levels in February. Chevron maintained its 2026 guidance of $6 billion of Chevron-share free cash flow from TCO at $70 Brent.

Chevron is also advancing a cost reduction program. Bonner said execution in 2025 exceeded expectations, with $1.5 billion of savings delivered and $2 billion captured in the annual run rate. The company has expanded its target to $3 billion–$4 billion of savings by the end of 2026, with more than 60% expected from durable efficiency gains. Executives said Permian production is being held at roughly 1 million barrels per day to optimize cash generation and capital efficiency, and that best practices are being applied to the Bakken following the Hess acquisition.

Venezuela operations and crude flows to the U.S.

Wirth said Chevron’s operations in Venezuela have continued uninterrupted and that the company is involved in four joint ventures with PDVSA, three of which are producing. Since 2022, after license changes, Chevron has increased production in these ventures by more than 200,000 barrels per day, with gross output around 250,000 barrels per day. He said there is potential for up to 50% additional production growth over the next 18–24 months, contingent on further U.S. government authorizations, with activities funded from cash generated within the ventures and reinvested in well work and infrastructure maintenance.

Separately, a Reuters report cited by analysts said Chevron is preparing to ramp up shipments of Venezuelan crude to the U.S., with exports expected to rise to about 300,000 barrels per day in March, a rebound from reduced shipments late last year following U.S. restrictions. To support higher flows, Chevron has secured several tankers and accelerated loadings. Joint ventures with PDVSA are currently producing about 240,000 to 250,000 barrels per day of heavy crude favored by Gulf Coast refiners, and these operations were not affected by recent PDVSA production cuts. In downstream operations, Wirth said Chevron has already brought about 50,000 barrels per day of Venezuelan crude into its Pascagoula refinery and could take another 100,000 barrels per day into its system, including Pascagoula and the El Segundo refinery.

Eastern Mediterranean gas growth and exploration plans

Chevron highlighted its “advantage assets” in the Eastern Mediterranean as a key growth area. Wirth said the Leviathan field has reached final investment decision for a capacity expansion that, combined with near-term initiatives, is expected to lift gross capacity to roughly 2.1 billion cubic feet per day by the end of the decade. He said this project is expected to contribute to a doubling of current earnings and free cash flow. At Tamar, an optimization project is starting up, targeting an increase in gross capacity to about 1.6 billion cubic feet per day.

The Aphrodite gas field in Cyprus has entered front-end engineering and design as Chevron works toward what it described as a competitive investment. Wirth also pointed to exploration plans offshore Egypt, where the company holds a large position in relatively underexplored blocks. He said Chevron has acquired seismic data and expects to drill at least one exploration well to test whether petroleum systems extend offshore. These regional projects are part of a broader effort to expand gas supply to nearby markets and enhance the company’s earnings and free cash flow profile.

Analyst reaction and market backdrop

Amid these operational and strategic updates, Bank of America revised its view on Chevron. On January 27, the firm raised its price target on the shares to $188 from $180 while maintaining a Buy rating. The bank said the change reflects updated views across its coverage of integrated, refining and midstream companies, citing higher front-month crude prices supported by the removal of Maduro in Venezuela and ongoing unrest in Iran. Bank of America described the outlook as shaped by a combination of geopolitical developments and company-specific drivers. In equity markets, Chevron shares were little changed premarket following the earnings release, after gaining about 12% earlier in the month.