In the near term, but maybe longer term, about exports out of the US and so all of that has got, gas markets under a little more pressure than oil markets or refined products and it’s not unusual. Pierre was just talking about how we build the company to compete through the cycles and different parts of the portfolio basket. Petrochemicals are under some pressure right now as well and so at any point in time, we’re going to find some of the fundamentals, probably under pressure. Others are looking pretty good and here in the short term, I think Henry Hub is in the under pressure category.
Operator: We’ll go next to Bob Brackett with Bernstein Research.
Bob Brackett: Good morning. If I look at the production guide of 4% to 7% growth on, say, $3.1 million, and I try to book in that between a fourth quarter closer to 3%-4%, and a 2025 where we’re going to see TCO, FGP startup, plus hitting that million barrel a day milestone in the Permian, sort of implies there’s an inflection point in production growth coming at some point, or perhaps there’s a conservative guide for this year. Is that the right way to think about it?
Mike Wirth: Well, coming into this year, we now have a full year of PDC that will be part of the portfolio. So that’s pretty safe in terms of counting on that. I’ve already mentioned that fourth quarter was a little bit higher than maybe we even might have expected because we had high reliability. Some of these midstream issues we’d faced in the Permian had didn’t repeat. We had this accounting catch-up thing in the Permian as well and we had a pretty light turnaround schedule in the fourth quarter. So it was a strong quarter all the way around. As we head into next year, we’ve got some asset sales in the guidance and, Bob, we’ve been at the low end. We’ve kind of ended up last couple of years hitting our guidance range, but at the low end and so I think you could probably think of this as being a little more comfortably in the middle of the range this year, given a number of the things that you mentioned.
So, we try to give you guidance each year that we expect to hit, and we certainly expect to hit it this year.
Operator: We will take our last question from Neal Dingmann with Truist Securities.
Neal Dingmann: Thanks for getting me in. My question, Mike, is maybe just on the Chevron return specifically trying to get a sense of, sounds like you will, but just want to get a sense if you’ll continue paying out a majority of free cash flow for the remainder of this year and if the buybacks will continue to constitute, a bit over 50% of that payout?
Mike Wirth: Yeah, Neil, we have not used some percentage or range of percentage of cash from operations as kind of a go by for distributions. What we’ve done is, have leaned on our track record on the dividend, first of all, and we’ve already clarified what you can expect this year with the 8% increase that we’ve announced. And then, I would point you back towards our upside and downside guidance that we’ve had out there now for a number of years, $10 billion to $20 billion on the range for buybacks and that’s in an upside price case. We’d be up towards the higher end of that in a lower price case down at the lower end, both of which we can comfortably handle. We have indicated that post the Hess close, all other thing’s equal, we’ll see when it happens and how the world looks, when we get there, but we would expect to move from a rate of 17.5 to the top end of 20 because we’re so confident in the long-term cash productive capacity of our portfolio and the strength of our balance sheet.
So rather than focusing in on those percentages, I’d really point you towards the specific guidance that we’ve issued in the kind of the track record. Now, and of course, I think Pierre mentioned this in his comments. We do remain under SEC restrictions right now relative to the rate at which we can buy back and then we’ll be out of the market when the Hess proxy is open and so all of these things are under normal times, we don’t have one of those constraints on this.
Pierre Breber: Hey, and I would just add, let me just add a little bit. It’s fitting maybe my last words will be on share buybacks, six straight years of buybacks, right, 17 years out of the past 21 years, but we actually bought back more shares last year than the year before, even though earnings and cash flow were higher, right? There were records in ’22, still strong in ’23. That’s the whole point. We’re trying to be steady across the commodity cycle. We’ve heard from investors that buybacks should not be pro-cyclical. And it’s hard to be counter-cyclical in the commodity business that has some price volatility. So being steady across the cycle is how we guide to it and these formulas, in fact, reinforce the opposite. They reinforce pro-cyclicality.
So we’re giving a return that in some ways is almost independent of prices within a range because we’re could have paid more out in ’22, but we held it back and we use some of that to pay in ’23. We’ll see where it goes, but the intent is to try to be steady across the cycle, either pro-cyclical nor counter-cyclical. Thanks Neal.
Neal Dingmann: Pierre, great departure comments. Thank you.
Mike Wirth: I would like to thank everyone for your time today. We appreciate your interest in Chevron and your participation on today’s call. Please stay safe and healthy. Katie, back to you.
Operator: Thank you. This concludes Chevron’s fourth quarter 2023 earnings conference call. You may now disconnect.
