Q3 2024 Chevron Corp Earnings Call

Jake Spiering; Head of Investor Relations; Chevron Corp

Michael Wirth; Chairman of the Board, Chief Executive Officer; Chevron Corp

Eimear Bonner; Chief Financial Officer; Chevron Corp

Jean Ann Salisbury; Analyst; BofA Securities Inc

Neil Mehta; Analyst; The Goldman Sachs Group Inc

Douglas George Blyth Leggate; Analyst; Wolfe Research, LLC

Biraj Borkhataria; Analyst; RBC Capital Markets

Joshua Silverstein; Analyst; UBS Group AG

Devin McDermott; Analyst; Morgan Stanley

Francis Lloyd Byrne; Analyst; Jefferies Group LLC

Wei Jiang; Analyst; Barclays plc

Paul Cheng; Analyst; Scotiabank

Bob Brackett; Analyst; Sanford C. Bernstein & Co LLC

Lucas Herrmann; Analyst; BNP Paribas

John Royall; Analyst; JPMorgan Chase & Co

Roger Read; Analyst; Wells Fargo & Company

Nitin Kumar; Analyst; Mizuho Securities Co Ltd

Ryan Todd; Analyst; Piper Sandler Companies

Alastair Syme; Analyst; Citigroup Inc

Operator

Good morning. My name is Justin, and I will be your conference facilitator today. Welcome to Chevron's third-quarter 2024 earnings conference call. (Operator Instructions) As a reminder, this conference call is being recorded. I will now turn the conference call over to the Head of Investor Relations of Chevron Corporation, Mr. Jake Spiering. Please go ahead.

Jake Spiering

Thank you, Justin. Welcome to Chevron's third-quarter 2024 earnings conference call and webcast. I'm Jake Spiering, Head of Investor Relations. Our Chairman and CEO, Mike Wirth; and CFO, Eimear Bonner, are on the call with me today. We will refer to the slides and prepared remarks that are available on Chevron's website. Before we begin, please be reminded that this presentation contains estimates, projections and other forward-looking statements.
A reconciliation of non-GAAP measures can be found in the appendix to this presentation. Please review the cautionary statement on slide 2. Now I will turn it over to Mike.

Michael Wirth

All right. Thanks, Jake. This quarter, Chevron delivered strong financial and operational results, returned record cash to shareholders and achieved project milestones that are expected to deliver production and cash flow growth over the coming years. We continue to see strong performance in the Permian and executed major turnarounds at TCO and Gorgon ahead of schedule. Worldwide production increased by 7% from the prior year and set a third quarter record. We started up the high-pressure Anchor project and began water injection to boost production at the Jack/St. Malo and Tahiti fields.
These projects, combined with additional project start-ups through 2025 are expected to grow Gulf of Mexico production to 300,000 barrels per day by 2026. We've expanded our CO2 storage portfolio, adding over 2 million acres offshore Western Australia. In September, the FTC completed its review of the company's merger with Hess. And we also recently announced several asset sales as part of our ongoing portfolio optimization efforts.
This quarter marked the one-year anniversary of the PDC Energy acquisition. We've successfully combined the two companies, taking best practices from both and applying them across our shale and tight portfolio. We've exceeded our guidance of $500 million in combined capital and cost synergies by more than 30% and have delivered more than $1 billion in incremental free cash flow since acquiring PDC. Chevron’s well performance is 40% better than the DJ Basin average, and we continue to optimize development plans.
We have advantaged inventory with around 75% locations at a breakeven below $50 per barrel. We expect to hold production at a plateau around 400,000 barrels of oil equivalent per day through the end of the decade. And our operations in Colorado are among the lowest carbon intensity assets in the industry, benefiting from tankless production facilities that lower greenhouse gas emissions by 90% compared to older designs. Where possible, we utilize grid-powered rigs that reduce more than 60% of our on-site greenhouse gas emissions from drilling.
At TCO, the team continues to deliver consistent progress on project milestones. All four pressure boost facilities are now online and operating with high reliability. All production is flowing through these facilities, which allows optimization of existing plants and enabled the highest daily production in the field's 31 years of service. Remaining metering stations are all under conversion, and we're confident in the incremental well capacity that will feed FGP.
We've initiated final leak testing for the wet sour gas compressors and are preparing the crude processing systems for operation. Complex commissioning activities will continue over the coming months, leading into initial start-up activities in the first quarter of 2025. We continue to divest noncore positions at significant value. We've announced asset sales in Canada, Alaska and Congo that will contribute before tax proceeds of approximately $8 billion.
Pending regulatory approvals, we expect to close these transactions in the fourth quarter. In Canada, we received a compelling offer for our Kaybob Duvernay shale position and non-operated interest in the Athabasca Oil Sands Project. Both are good assets, and we have a long history there, but they are a better fit for a reputable counterparty at an attractive deal value for Chevron. Now I'll turn it over to Eimear to discuss the financials.