• Fourth quarter earnings of $5.1 billion; annual earnings of $15.6 billion
• Strong cash flow from operations of $29.2 billion in 2021
• Record free cash flow of $21.1 billion in 2021
• Dividends and share repurchases of $11.6 billion in 2021

Chevron Corporation reported earnings of $5.1 billion ($2.63 per share - diluted) for fourth quarter 2021, compared with a loss of $665 million ($(0.33) per share - diluted) in fourth quarter 2020. Included in the current quarter were asset sale gains of $520 million, losses on the early retirement of debt of $260 million and pension settlement costs of $82 million. Foreign currency effects decreased earnings by $40 million. Adjusted earnings of $4.9 billion ($2.56 per share - diluted) in fourth quarter 2021 compares to adjusted earnings of $298 million ($0.16 per share - diluted) in fourth quarter 2020.

Chevron reported full-year 2021 earnings of $15.6 billion ($8.14 per share - diluted), compared with a loss of $5.5 billion ($(2.96) per share - diluted) in 2020. Included in 2021 were net charges for special items of $289 million, compared to net charges of $5.1 billion for special items in 2020. Foreign currency effects increased earnings in 2021 by $306 million. Adjusted earnings of $15.6 billion ($8.13 per share - diluted) in 2021 compares to adjusted earnings of $172 million ($0.09 per share - diluted) in 2020.

Sales and other operating revenues in fourth quarter 2021 were $46 billion, compared to $25 billion in the year-ago period.

“In 2021, we delivered record free cash flow and accelerated our progress towards a lower carbon future,” said Mike Wirth, Chevron’s chairman and chief executive officer. “We’re an even better company than we were just a few years ago. We’re more capital and cost efficient, enabling us to return more cash to shareholders.”

During 2021, Chevron increased its quarterly dividend per share by 4 percent to $1.34 and repurchased $1.4 billion of company stock, all while increasing return on capital employed to 9.4 percent and reducing debt by $12.9 billion. The company raised its dividend per share an additional 6 percent to $1.42 earlier this week and guided first quarter 2022 buybacks to the top of its $3 to $5 billion annual guidance range.

Also last year, the company and its affiliates further strengthened its businesses by advancing the Future Growth Project and Wellhead Pressure Management Project in Kazakhstan and the Anchor Project in the Gulf of Mexico, integrating legacy Noble Energy people and assets while realizing more than double the initially announced synergies, signing an agreement to extend Block 0 concession in Angola, and starting up the olefins mixed-feed cracker and associated polyethylene units in South Korea.

Chevron’s net oil-equivalent production grew in 2021 to a record 3.10 million barrels per day. The company also added 1.3 billion barrels of net oil-equivalent proved reserves in 2021. These additions, which are subject to final reviews, equate to approximately 112 percent of net oil equivalent production for the year. The largest net additions were from assets in the Permian Basin, the Gulf of Mexico and Australia. The largest net reductions were from assets in Kazakhstan primarily due to higher prices and their negative effect on reserves. The company will provide additional details relating to 2021 reserves in its Annual Report on Form 10-K scheduled for filing with the SEC on February 24, 2022.

In 2021, the company made progress to advance its lower carbon future as it set targets to lower the carbon intensity of its operations, adopted a 2050 net zero aspiration for upstream scope 1 and 2 emissions, expanded its renewable fuels business, formed the Chevron New Energies organization that aims to grow hydrogen, carbon capture and offsets businesses, and tripled its associated planned capital investment to approximately $10 billion through 2028.

At year-end, balances of cash, cash equivalents, and marketable securities totaled $5.7 billion, a slight increase from the end of 2020. Total debt at December 31, 2021 was $31.4 billion, a decrease of $12.9 billion from a year earlier.

“We’re delivering greater value to stockholders today, while working to meet the world’s growing energy demands in a lower carbon future,” Wirth concluded.

UPSTREAM

Worldwide net oil-equivalent production was 3.12 million barrels per day in fourth quarter 2021, a decrease of 5 percent from a year ago. Worldwide net oil-equivalent production for the full-year 2021 was 3.10 million barrels per day, a slight increase from a year ago.

U.S. Upstream

U.S. upstream operations earned $2.97 billion in fourth quarter 2021, compared with $101 million a year earlier. The improvement was primarily due to higher realizations, gains on asset sales, higher sales volumes and lower exploration expense, partially offset by higher employee benefit costs.

The company’s average sales price per barrel of crude oil and natural gas liquids was $63 in fourth quarter 2021, up from $33 a year earlier. The average sales price of natural gas was $4.78 per thousand cubic feet in fourth quarter 2021, up from $1.49 in last year’s fourth quarter.

Net oil-equivalent production of 1.22 million barrels per day in fourth quarter 2021 was up 21,000 barrels per day from a year earlier. The increase was due to net production increases in the Permian Basin and the absence of Gulf of Mexico weather effects, partially offset by a 48,000 barrel per day decrease related to the Appalachian asset sale. The net liquids component of oil-equivalent production in fourth quarter 2021 increased 6 percent to 929,000 barrels per day, and net natural gas production decreased 9 percent to 1.73 billion cubic feet per day, compared to last year’s fourth quarter.

International Upstream

International upstream operations earned $2.19 billion in fourth quarter 2021, compared with $400 million a year ago. The increase in earnings was primarily due to higher realizations, partially offset by lower sales volumes, and higher depreciation and employee benefit costs. Foreign currency effects had a favorable impact on earnings of $375 million between periods.

The average sales price for crude oil and natural gas liquids in fourth quarter 2021 was $74 per barrel, up from $40 a year earlier. The average sales price of natural gas was $7.90 per thousand cubic feet in the fourth quarter, up from $4.23 in last year’s fourth quarter.

Net oil-equivalent production of 1.90 million barrels per day in fourth quarter 2021 was down 181,000 barrels per day from fourth quarter 2020. The decrease was primarily due to the absence of 186,000 barrels per day following expiration of the Rokan concession in Indonesia and unfavorable entitlement effects, partially offset by lower production curtailments. The net liquids component of oil-equivalent production decreased 18 percent to 899,000 barrels per day in fourth quarter 2021, while net natural gas production of 6.01 billion cubic feet per day increased 2 percent, compared to last year's fourth quarter.

Cash flow from operations

Cash flow from operations in 2021 was $29.2 billion, compared with $10.6 billion in 2020. Excluding working capital effects, cash flow from operations in 2021 was $30.6 billion, compared with $12.2 billion in 2020.

Capital and exploratory expenditures

Capital and exploratory expenditures in 2021 were $11.7 billion, compared with $13.5 billion in 2020. The amounts included $3.2 billion in 2021 and $4.0 billion in 2020 for the company’s share of expenditures by affiliates, which did not require cash outlays by the company. Expenditures for upstream represented 82 percent of the company-wide total in 2021.