Chevron CEO Mike Wirth on Q1 results: Highest first quarter production in company history

Chevron CEO Mike Wirth on Q1 results: Highest first quarter production in company history

let’s check back in on shares of Chevron
after reporting first quarter results
which I thought were great I think the
stock doesn’t know what it’s doing uh so
joining us now in the CBC exclusive is
Chevron CEO Mike worth mike always great
to have you on the
show morning Jim good to see you Mike I
see many good things here right perum
absolutely terrific I around uh Global
great of course we have to talk about
the acquisition that’s but I think that
I’ve got two other Acquisitions that I
like you did a renewable energy and you
did PDC which was Colorado so I’m asking
rather than go to the big dog that we
may have to talk to that isn’t complete
how are those and how they help
you well Jim you’re you’re right it was
a really strong first quarter and of
course uh those uh Acquisitions along
with our our base business contributed
to strong operational performance strong
financial performance and strong
shareholder returns operationally this
was the highest first quarter production
in the history of our company and first
quarter us production was up 35 % versus
last year uh on financial uh performance
it’s a ninth straight quarter with
adjusted earnings greater than $5
billion and and an adjusted return on
Capital employed greater than 12% and
all that translates to to to really
strong returns to shareholders this is
the eth consecutive quarter where we’ve
returned over5 billion in cash to
shareholders so a strong contributions
from our our core ongoing business and
of course important contributions from
the recent acquisitions
well in the meantime you also I I I’m
not saying that you set yourself short
but the things you’re doing
environmentally I want to mention
because you’re you’re part of what I
regard as the pragmatic energy complex
and I just want to give you the floor
for people to know that we’re not going
to roll back the things that are
involving climate change because you’re
at the Forefront of being pragmatic and
doing the right
thing I think you’re using an important
word pragmatic I use the word balanced
as well we’re investing in things that
we think can bring benefits today uh and
things that fit with our core
competencies and so uh in the most
recent quarter we sanctioned uh a
project to uh increase oil seed uh
processing capability to help grow our
biofuels business where we’re the second
largest bofs producer in the United
States we also sanctioned a project in
California to take an oil field where
we’ve got solar production today to
support our operations and we’ve got
excess solar capacity which we will now
use to gener at Green hydrogen and and
Supply that initially at least out to
retail stations for for vehicle
transportation so these are things that
fit with our competency fit with our
asset base our customers and things we
can do today that help contribute to
addressing the desire for a lower carbon
Energy
System Mike it’s David um a a lot of
focus as well on the pending transaction
to acquire H and I wanted to just ask a
few questions around that first of all
when do you think you’re actually going
to schedule a shareholder Vote or when
are they going to schedule a shareholder
vote and when do you believe you’ll be
in substantial compliance with what The
Regulators have asked in terms of the
antitrust
review yeah David first of all I think
I’m glad you’re talking about
shareholders this is a transaction that
is good for shareholders uh for
shareholders of Hess the shareholders of
Chev it’s good for the industry and
creating a premier Energy company that’s
well positioned for the energy
transition and it’s good for the the
people of Guyana and the country of
Guyana uh we expect the mailing on the
uh hes Pro to go out before the end of
April and a shareholder V vote to be
held late in May so that’s uh that’s
upon us here and uh we’ve been working
constructively uh with the FTC we
respect the role that they play in the
uh the oversight process on transactions
and expect to uh you know certify
compliance with their second request
here uh by midye and uh and work our way
through the process with them uh by mid
year so both of those things on track
back here in the second quarter right
the unexpected part of this of course
has been what is a dispute now with
Exxon over whether in fact as as part of
their joint operating agreement in
Guyana where they own 45% they have a
right of preemption uh that’s being
arbitrated now um Mike how long is that
going to take and are you getting the
sense that Exon would like to push this
arbitration out as long as it
can well the arbitration process is
really set by the arbitration Tribunal
uh and uh and so we have to respect
their uh procedures in uh in this uh so
we don’t control that uh at a an
investor conference uh last month U
Exxon uh suggested that 5 to six months
should be sufficient we certainly
believe uh that’s a sufficient time to
address what’s a pretty straightforward
interpretation of contractual language
and uh and we’ve uh worked with hes
who’s really party to this uh joint
operating agreement and I think in their
uh disclosures have uh and we’ve
indicated in our disclosures that we’ve
suggested a third quarter hearing and a
fourth quarter resolution uh would be
appropriate so we’re working with hes to
move this along expediently and um and
we think that’s in everyone’s interests
yeah Darren Woods was a guest earlier on
squawkbox and he said listen we’re not
interested in making a play these are
his words for hesp we’re not interested
in a transaction on hes but he continues
to say it’s about protecting the value
they created and of course they believe
that they have that right of first
refusal what do you say and is there any
chance that we can actually those of us
who are trying to figure it out see the
language that is an issue here given it
would help the market decide who’s got
the upper
hand yeah I think uh you know I’ll let
Exon speak for what their intentions are
um you know we’re not a party to this
agreement and uh it’s a confidential
agreement and so that anything that
would relate to making terms of this
agreement public is something that
really is uh the provin of those that
are party to the agreement and that
would be uh you know Exon Hess and uh
and cuk and so um you know I think those
questions are probably best directed to
them right although just to make it
clear if in fact you were to lose this
arbitration you’re not going to buy
Hess there’s a a condition precedent
that uh needs to be satisfied uh and if
an arbitration uh judgment in the event
it were to go against uh hess’s
interpretation of the contract and we we
feel very confident that their
interpretation is is the correct one uh
then that that condition wouldn’t be
satisfied and and the transaction would
not close correct all right so Mike let
let’s talk about the price of oil uh I
understand I think there’s about a $5
War premium is way I look at it uh where
we have an inflation problem in the
country where would oil be trading if we
didn’t have problems in the mid East and
do you think that the United States can
be a swing producer to actually get the
price
down certainly for the last decade or so
the US has been the the producer that’s
met most of the uh you know demand
growth in the world at at the margin uh
production in the US is still growing
although not at the same rate it was
earlier this last decade demand is
growing pretty strongly up a couple
million barrels a day last year probably
another million and a half barrels a day
this year and so while there may be a a
slight risk premium in the market we
also have a market that that’s pretty
finely balanced uh inventories that are
uh a little bit on the lower end and I
think we’d see still pretty pretty
decent um commodity prices in this
environment but as as you know Jim it’s
a volatile world and we have to be
prepared for ups and downs uh we’re
prepared for volatility we got a strong
balance sheet with net debt in the
single digits and we’re very confident
in the future in any price environment
which is why we raised our dividend 8%
earlier this year and continue to have
now a track record 37 consecutive years
of increasing our dividend dividend
payout is uh
4% uh which is almost three times what
the S&P 500 is and over the last 5 years
we’ve grown at at a rate 30% higher than
the growth rate of the S&P so uh we’re
confident in the future and we’re
prepared for volatility and commodity
markets okay so let’s talk about uh what
could make things difficult you have the
perme in it looks like you’re finally
getting enough pipe from the premium to
bring that to Market it wasn’t the case
and then you have the president calling
for a pause at LNG till uh in 2028 which
would be devastating I think you would
admit because these plan these projects
have to be decided now for 2028 so
there’s a lot of them that are being
sheld do you have enough pipe and do you
have enough
export we do have uh offtake capacity
out of the peran we’ve got export
capacity and so our company is is well
positioned
uh for uh you know Market um vagaries uh
in terms of transportation and U and
exports but I think the broader point
you make is uh you know it’s a good
thing for the world that the US is an
Innovative energy Powerhouse uh it’s a
good thing for our allies it’s a good
thing for our economy and it’s a good
thing that we’ve got Dynamic strong
companies in this industry that have
invested in US Energy as at the same
time we’re reducing carbon to our
earlier discussion and we need to have a
policy environment that encourages uh
investment because not only does our
economy rely on it but those of our
allies do and the world economy does and
so we need policies that are uh are
predictable are consistent uh that
protect the environment but that also
encourage investment and development of
the resources that this country has that
are vital to our security

Chevron chairman and CEO Mike Wirth joins ‘Squawk on the Street’ to discuss the company’s quarterly earnings results, state of the pending Hess acquisition, oil price trends, demand outlook, and more.