Katie, as the meeting coordinator, hosted Chevron's second quarter earnings conference call for 2025. She introduced the participants to the call and reminded them to remain on mute during the call. She also mentioned how to request assistance during the meeting. The meeting was attended by Chevron's Chairman and CEO, Vice Chairman, CFO, etc., who discussed the earnings situation via phone and web broadcast and highlighted the estimated and forward-looking statements included in the meeting.

In the second quarter, Chevron achieved several important milestones, including record-breaking global and U.S. production, successful acquisition of lithium-rich land to establish domestic lithium operations, and returning a significant amount of funds to shareholders. In addition, the company successfully completed the merger with Hess, further strengthening its position as an international energy giant and gaining long-term, low-cost growth opportunities in Guyana.

Chevron's expansion in the Bakken region has significantly increased its oil and gas production, making it the largest landholder in the Gulf of America region, with overall U.S. production significantly increasing in just a few years. Through proactive integration and stock buyback strategies, the company expects to achieve annual operational synergies of tens of billions of dollars within the expected timeframe, and to achieve cash flow growth from transactions in the fourth quarter. In addition, Chevron has a unique and long-standing production position in the Permian Basin, achieving significant organic production growth and significant cost reductions through innovative technology and efficient operational strategies. Financially, the company reported strong profits in the second quarter, driven by high-margin production growth, strong operational reliability, and capital discipline, despite a decline in oil prices, adjusted free cash flow still achieved a significant increase.

Chevron announced that in the past years, it expects to achieve industry-leading free cash flow growth through the attainment of key project milestones. It is noted that production in the Americas Basin has been fully ramped up in the TCO FGP project, while significant production milestones have been achieved in the Permian Basin, allowing for moderate growth control, reduced capital expenditures, and increased free cash flow. The company expects to achieve $2 billion in annual cost savings by the end of this year, and through the integration of legacy assets, additional free cash flow is expected to exceed the incremental dividend from the merger. As a result, Chevron has raised its 2026 additional free cash flow guidance to $12.5 billion. In the Permian Basin, with capital expenditure adjustments, the company plans to further reduce capital expenditures to sustain cash flow and long-term value. At Investor Day, Chevron will share more details about capital expenditure adjustments and free cash flow growth.

Hess company has had detailed discussions on its $1 billion cost-saving plan and independent projects, expressing high confidence. The company has successfully achieved expected production improvements in projects such as TCO, Permian, and Gulf of America, while capital project initiation work has been completed and assets are gradually reaching expected capacity. In addition, the cost reduction plan is progressing according to budget and is expected to significantly impact profits by the end of this year. The additional $1 billion cost-saving target is mainly derived from synergies in loan rates and future years of production growth, especially with the launch of the fourth and fifth FPSOs expected to bring significant production increases. Overall, most key milestones have been achieved and the company is currently on track.

In the discussion, mention was made of Chevron's new organizational restructuring, emphasizing that this adjustment is based on the company's expanding asset scale, concentration of asset categories, and continuous technological development. By consolidating similar businesses, accelerating the application of best practices, standardizing and scaling work, as well as leveraging digital twin technology and global facility maintenance planning, the company aims not only to achieve cost reductions but also expects to see significant improvements in overall system performance, including operational execution, major project delivery, and turnover efficiency. Despite an overall reduction in staff numbers, the company hopes to achieve comprehensive performance improvements beyond cost savings by streamlining workflows so that employees can complete tasks more efficiently.

In the discussion, the company detailed its strategy for integrating the tight oil reservoirs (including Permian, DJ, Bakken) after acquiring Hess, emphasizing the importance of balancing growth with free cash flow. The company's goal is to maintain stable production from the tight oil reservoirs through capital and operational efficiency improvements, generating significant cash flow to support the entire investment portfolio, strengthen the balance sheet, safeguard dividends and share buybacks. At the same time, the company highlighted the importance of a balanced portfolio of short-term and long-term investments to achieve stable, predictable cash flow inflows, and ultimately return some cash flow to shareholders.

In the discussion, Chevron expressed interest in acquiring Hess's assets in the Bakken region of North Dakota, emphasizing that this would strengthen its position in the shale and tight oil fields. Despite Hess's U.S. operations showing negative free cash flow in the report, Chevron believes that by leveraging the experiences of Noble and PDC, combining Hess's unique capabilities in the Bakken region with Chevron's unconventional oil and gas capabilities, efficiency and value can be increased. As for the special financing structure of Hess Midstream, Chevron stated that they will handle it in a value-driven manner and plan to further discuss long-term development plans at an investor day.

An American company continues its oil production activities in Venezuela, despite facing sanctions from the US government. The company is closely cooperating with the government to ensure compliance. Recently, a limited amount of Venezuelan oil will flow to the United States in accordance with the sanction policy, which will help meet the demand of US refineries for heavy crude oil and also assist the company in gradually recovering its debts in Venezuela. The company is committed to complying with local laws and US sanction policies in all operating countries.

Discussed ExxonMobil's successful operational performance in multiple projects, including the Gulf of Mexico, Permian Basin, Tengiz, and Australia's liquefied natural gas projects. Emphasized the contribution of operational efficiency, production efficiency, turnover management, and the start-up of light oil projects to increasing capacity and efficiency, while also mentioning the successful turnover performance and improved production efficiency in 14 key assets.

During the discussion, it was mentioned that although the exploration results in the past few years have been less than satisfactory, the company recognizes the importance of exploration in balancing and diversifying its investment portfolio. With the increase in resources and reserves in the shale business, the company has reduced exploration investments, but is now considering adjusting its exploration plans and methods to improve efficiency.

The discussion emphasized the importance of exploration in the company's future investment portfolio construction, and clarified the strategy of balancing exploration in mature and frontier areas. The company has achieved success in recent exploration projects in infrastructure-enabled areas, and has expanded exploration work in frontier regions such as Suriname, Namibia, and Egypt by deploying drilling operations. At the same time, the company has undergone internal organizational changes, including strengthening decision-making centralization and introducing new talent to improve exploration efficiency and effectiveness.

The discussion focused on the strategic updates on natural gas in the Eastern Mediterranean, including potential upgrades and expansions of the Leviathan project, as well as the development plans for the Aphrodite project. It was mentioned that in order to maintain stable energy supply in the region, progress is being made on the Tamar and Leviathan projects, with expectations for these projects to come online later this year or early next year, increasing production capacity. Additionally, Cyprus' Aditi project is also undergoing front-end engineering design, progressing smoothly in cooperation with the local government, with approved plans moving towards a final investment decision (FID), while also considering utilizing the Egyptian market as part of the regional market.

The company is very satisfied with the overall operating performance of Teng's Operation, thanks to the efforts of the team, from Lyda's FP to the increase in nominal production capacity, showing a continuing positive momentum. With the integrated operation control center included in future growth project investments, the company can optimize the entire system, including wells, factories, and all other parts, and is currently beginning to tap into the potential of this system. Despite planned maintenance activities in the fourth quarter, the company expects to continue to improve operational efficiency and maintain the current positive momentum.

In this conversation, Betty G's main focus on the questions raised by Barclays were on the significant increase in dividends from subsidiary companies and their relationship with TCO's performance exceeding expectations. The respondent elaborated on the rapid improvement in TCO's performance in the first quarter, leading to continued production growth in the second quarter accompanied by price hikes, resulting in higher dividends. Furthermore, he pointed out that loan repayments will be seen for the first time in the third quarter, and the adjusted free cash flow metric will include dividends from equity subsidiaries, which will further impact future dividend figures.

During the discussion, it was mentioned that loan repayments will flow through cash from investment flows and ultimately be integrated into the adjusted free cash flow metric. In terms of Gulf of America's business performance, the company expressed satisfaction, noting that its performance exceeded expectations, thanks to efficient operation of assets and phased development strategies such as water flooding, multiphase pumping, and well stimulation projects. The company plans to continue maximizing its assets in the region, expecting to generate high cash flow in the future. Additionally, the company has become the largest leaseholder in Gulf of America through the acquisition of Hess, providing more opportunities for future investments and developments.

The company has increased its annual throughput of liquefied natural gas (LNG) to X million tons, mainly by the end of this decade. Although the company already has some long-term LNG agreements, its strategic focus is on building a globally connected LNG portfolio to optimize the use of natural gas production from the United States and Australia, meet global market demands, and maximize profits. Through offshore arrangements in the Gulf of Mexico, the company is able to access multiple profit spaces, allowing them to flexibly transfer products to the most profitable markets.

The discussion focused on issues related to capital allocation, especially with regards to stock buyback plans. It was mentioned that previous expectations and guidance from the Hes transaction have been taken into account, and due to delays in transaction approvals, the company has adopted different strategies for buying back stocks, including purchasing Hess shares at lower prices. The company plans to update its future outlook and guidance on stock repurchases at the Investor Day in November.

Kazakhstan is currently planning to achieve economic diversification through increasing oil and natural gas production, as well as investing in petrochemical capacity. The country has abundant natural gas resources, but currently most of the gas is reinjected into oil fields. At the same time, Kazakhstan faces the challenge of better connecting production with market demand, and may therefore need to invest more in domestic infrastructure. Through cooperation with other countries, Kazakhstan is seeking to make progress in its energy and economic diversification goals.

In this discussion, Chevron emphasized its multi-year plan in capital investment intensity, particularly in expanding its upstream business. Facing increasing capital expenditures, the company pledged to maintain capital discipline, focusing on investing in the best opportunities, while actively seeking asset divestments to optimize its portfolio. Chevron also mentioned its exploration plans and project investments in multiple regions globally, such as the development in Guyana and Bakken, as well as investments in petrochemical projects. The company plans to further share its enhanced investment portfolio and continued capital discipline strategy at an upcoming investor day, and how it aims to achieve shareholder value and growth through these strategies.