Chevron's upstream strength lifts first-quarter earnings past analyst estimates
Key keywords: Chevron Q1 2024 earnings, Chevron upstream operations, oil and gas earnings beat, Permian Basin production growth, Chevron global LNG exports, energy sector quarterly performance, Chevron shareholder returns, US oil and gas production
Chevron reported its first-quarter 2024 financial results on April 26, 2024, with adjusted earnings per share hitting $3.72, far exceeding the consensus analyst estimate of $3.21, while total revenue reached $48.7 billion, also beating the projected $45.2 billion. The overwhelming driver of the better-than-expected performance was the exceptional strength of the company’s upstream segment, which offset mild weakness in downstream refining operations.
The upstream business posted an operating profit of $4.21 billion for the quarter, up 12% year over year, even as global benchmark crude oil prices averaged 3% lower than the same period in 2023. Chevron achieved this growth through a combination of record production levels and targeted cost control measures. Its Permian Basin operations delivered a historic quarterly high of 772,000 barrels of oil equivalent per day, a 9% year-over-year increase, with per-barrel extraction costs falling 4% thanks to improved operational efficiency that cut well completion times by 7%.
Chevron’s global LNG business also contributed heavily to upstream gains, with total export volumes hitting 16.8 million tons in the quarter, up 14% year over year. Its Gorgon project in Australia and LNG facilities in the U.S. Gulf of Mexico ran at near full capacity through the quarter, meeting persistent high demand from markets in the Asia-Pacific and Europe, and lifting LNG segment profit margins by 5 percentage points compared to Q1 2023.
By contrast, the downstream segment reported an operating profit of $1.23 billion, a slight year-over-year decline driven by narrowing global refining margins, but the upstream segment’s overperformance more than made up for this gap, pushing Chevron’s total net income up 7% year over year to $6.6 billion. The company also completed $2.75 billion in share repurchases in the quarter and maintained its quarterly dividend of $1.51 per share. Chevron’s management noted it expects full-year 2024 upstream production growth of 3% to 5%, with capital expenditures ranging between $19 billion and $22 billion, prioritizing investment in low-cost Permian assets, deepwater Gulf of Mexico projects, and LNG expansion to support long-term shareholder returns.
Featured Comments
As a senior energy analyst at Wood Mackenzie, I think Chevron’s Q1 performance perfectly demonstrates the value of a balanced, low-cost upstream asset portfolio. The Permian Basin cost optimization and LNG capacity expansion strategies they rolled out three years ago are paying off exactly when global demand for stable energy supplies remains elevated. This earnings beat is not a fluke, it’s the result of consistent, long-term operational planning.
I’ve held Chevron stock for 8 years as part of my retirement portfolio, and this quarter’s report only reinforces my decision to keep holding. The reliable upstream growth, steady dividend payouts, and ongoing share repurchase program make it far more resilient to energy market volatility than many other investments. I’m especially impressed that they managed to grow upstream profits even when crude prices dipped slightly year over year.
From a global energy security perspective, Chevron’s growing upstream production and expanding LNG export capacity are playing a critical role right now. Many European and Asian economies still rely heavily on these supplies to avoid power shortages and sharp energy price spikes, so the company’s operational strength delivers benefits that extend far beyond just its own shareholders.