# Chevron Corporation (NYSE: CVX) — Business, Risks and Management's Discussion Sources: Annual Report on Form 10-K for the fiscal year ended December 31, 2025 (accession 0000093410-26-000078, filed February 24, 2026) and Quarterly Report on Form 10-Q for the quarter ended June 30, 2026 (accession 0000093410-26-000167, filed August 6, 2026). --- ## Business *From the FY2025 Form 10-K, accession 0000093410-26-000078.* Chevron Corporation is a Delaware holding company — incorporated in 1926 as Standard Oil Company of California, renamed Chevron in 1984 — that manages investments in subsidiaries and affiliates engaged in integrated energy and chemicals operations. Upstream and downstream activities are run through a single **Oil, Products and Gas** organization, with operations and projects in North America, South America, Europe, Africa, Asia and Australia. The company had **43,039 employees** at December 31, 2025 (37,860 non-service-station, 5,179 service-station). Chevron reports two business segments — **Upstream** and **Downstream** — each split between U.S. and international geographies, plus **All Other** (worldwide cash management and debt financing, corporate administration, insurance, real estate and technology companies). Management states plainly that "earnings of the company depend mostly on the profitability of its upstream business segment," and that the single most significant factor in upstream results is the price of crude oil, set in global markets outside the company's control. In downstream, crude oil is the largest cost component of refined products. ### Upstream Upstream consists of exploring for, developing, producing and transporting crude oil and natural gas; LNG processing, liquefaction, transportation and regasification; crude transport via major international export pipelines; natural gas transport, storage and marketing; carbon capture and storage; and a gas-to-liquids plant. **Scale.** Worldwide net oil-equivalent production was **3.7 million barrels per day in 2025**, up approximately 12 percent from 2024 on the Hess acquisition, completion of the Future Growth Project at Tengizchevroil (TCO), record Permian output and Gulf of America ramp-up, partly offset by asset sales in Canada and the Republic of Congo. Proved reserves were **10.6 billion barrels of oil-equivalent** at year-end 2025, eight percent higher than 2024; the 2025 reserve replacement ratio was **158 percent**, against five- and ten-year ratios of 91 percent and 95 percent. At December 31, 2025, **43 percent** of net proved oil-equivalent reserves were in the United States, **15 percent** in Australia and **11 percent** in Kazakhstan. About 21 percent of 2025 net oil-equivalent production came from OPEC+ member countries (Equatorial Guinea, Kazakhstan, Malaysia, Nigeria and the Partitioned Zone). **United States.** The Permian Basin is the largest single position: more than 1,750,000 net acres in the Delaware and Midland basins, where 2025 production reached one million net barrels of oil-equivalent per day (435,000 bbl crude, 280,000 bbl NGLs and 1.8 billion cubic feet of gas per day). Colorado's DJ Basin covers approximately 580,000 net acres (125,000 bbl crude, 100,000 bbl NGLs, 945 MMcf/d). The Hess acquisition added approximately 469,000 net acres in the North Dakota Bakken and a consolidated **~38 percent interest in Hess Midstream LP**, a publicly traded partnership providing fee-based gathering, processing and water services in the Williston Basin. Chevron is the largest acreage holder in the Gulf of America, with operated interests in Anchor (62.9%), Ballymore (60%), Big Foot (60%), Jack (50%) / St. Malo (51%), Stampede (50%, operatorship assumed from Hess) and Tahiti (58%), plus non-operated positions in Mad Dog, Perdido and Whale. California production averaged 63,000 net BOE/d; Chevron plans limited development drilling there in 2026 following Kern County's reinstatement of drilling permit approvals. **International.** Principal positions include: **Guyana** — a 30 percent non-operated interest in the 6.6-million-acre Stabroek Block, where the One Guyana FPSO (~250,000 gross bbl/d) achieved first production in August 2025 as the fourth producing vessel, with eight FPSOs and approximately 1.7 million gross bbl/d of capacity expected by 2030 and the seventh development (Hammerhead) sanctioned in September 2025. **Kazakhstan** — 50 percent of TCO, where the Future Growth Project was completed in 2025, adding 260,000 bbl/d and lifting gross output to about one million BOE/d, plus an 18 percent interest in Karachaganak and a 15 percent interest in the Caspian Pipeline Consortium. **Australia** — largest LNG producer in the country, operating Gorgon (47.3 percent; three-train, 15.6 MTPA) and Wheatstone (64.1 percent of the LNG facilities, 80.2 percent of the offshore licenses; two-train, 8.9 MTPA). **Israel** — 39.7 percent operated interest in Leviathan and 25 percent in Tamar. **Nigeria, Angola, Equatorial Guinea, Argentina (Vaca Muerta), Thailand, Bangladesh** and others round out the portfolio. **Venezuela** interests (Petroboscan, Petropiar, Petroindependiente, Petroindependencia, Loran) have been carried as non-equity investments since 2020 — income recognized only when cash is received, with no production or reserves included in reported results. ### Downstream and Chemicals At the end of 2025 Chevron's refining network could process **1.8 million barrels per day**. Average crude unit distillation capacity utilization was **92.9 percent in 2025** versus 87.9 percent in 2024; U.S. utilization was **94.5 percent** versus 86.6 percent, with imported crude supplying about 60 percent of U.S. refinery inputs. The Pasadena refinery expansion became fully operational in 2025, raising light crude throughput capacity to 125,000 bbl/d. International refining runs through three large affiliates: Singapore Refining Company (50 percent, 290,000 bbl/d), GS Caltex's Yeosu refinery in South Korea (50 percent, 800,000 bbl/d) and Star Petroleum Refining in Thailand (60.6 percent). Marketing reaches roughly **8,600 Chevron- and Texaco-branded service stations** in the United States (about 380 company-owned or leased) and approximately **5,200 branded stations internationally**, plus commercial aviation fuel at 58 airports. Renewable fuels include 11 biofuel refineries in the U.S. and Germany and the Geismar, Louisiana renewable diesel plant, expanded in 2025 from 7,000 to 22,000 bbl/d. Chemicals run through Chevron Oronite (additives) and the **50 percent-owned Chevron Phillips Chemical Company (CPChem)**, which has two major polymer projects under construction — Golden Triangle Polymers in Orange, Texas (51 percent) and Ras Laffan in Qatar (30 percent) — both targeted for start-up in the first half of 2027. ### New Energies and other The new energies organization pursues hydrogen and its derivatives, carbon capture and storage and offsets, power generation for data centers, enhanced geothermal and lithium extraction. In 2025 Chevron acquired approximately 135,000 net acres in the Smackover Formation (Northeast Texas and Southwest Arkansas) for lithium, advanced its first data-center power project in West Texas, and completed construction at the ACES Delta hydrogen storage joint venture in Utah. Chevron holds a 50 percent interest in Bayou Bend CCS (approximately 140,000 acres of CO2 storage in Texas) and, in early 2025, acquired the remaining equity of Brightmark RNG Holdings, renamed Chevron RNG. --- ## Risk factors *From the FY2025 Form 10-K, accession 0000093410-26-000078 — condensed to the substantive risks.* **Commodity price exposure.** Chevron is primarily a commodities business with a history of price volatility. Extended periods of low prices or low demand for crude, natural gas and NGLs have had and can have a material adverse impact on results, financial condition and liquidity — depressing upstream earnings, cash flow, capital programs, production and proved reserves, and potentially impairing upstream assets. A significant or sustained decline in liquidity could hurt credit ratings, raise financing costs and reduce capital-markets access. **Resource replacement.** The company is in an extractive business: if it fails to replace produced crude and gas through organic opportunity, acquisition, exploration or technology, the business will decline. Maintaining an inventory of economic projects depends on obtaining and renewing exploration and production rights, drilling success, reservoir optimization, delivering long-lead capital-intensive projects on budget and schedule, partner alignment and efficient operation of mature properties. **Political instability, expropriation and sanctions.** Operations — particularly exploration and production — are exposed to changing political, regulatory and economic environments. As has occurred in the past, governments could act to **increase public ownership of the company's partially or wholly owned businesses, force contract renegotiations, or impose additional taxes, tariffs, royalties, fees, penalties or other costs**. Governments including the European Union have proposed or imposed obligations on activities, trade, taxes and public disclosures, and currency exchange controls. In some countries political conditions may threaten employee safety and Chevron's continued presence; internal unrest, acts of violence or strained relations between governments may adversely affect operations. Chevron must also comply with sanctions and trade laws, including sanctions imposed on **Venezuela and Russia**. The company's concession and licence terms are finite and geographically concentrated — for example, Angola Block 0 to 2050, Nigeria's PML 52 to 2044, the Partitioned Zone concession to 2046, Kazakhstan's Karachaganak PSA to 2038 and Israel's Leviathan concession to 2044. **Operational hazards and self-insurance.** Chevron operates in urban and remote settings exposed to hurricanes, severe storms, floods, heat waves, wildfires, sea level rise, war and other military conflicts (the company names the Russia–Ukraine conflict, the Middle East and "current geopolitical tensions in Venezuela"), accidents, civil unrest, earthquakes, system failures, cyber threats, terrorism and disease. Failures can cause releases, explosions or mechanical failures with personal injury, loss of life, environmental damage and lost revenue. **The company does not carry commercial insurance or third-party indemnities sufficient to cover all operational risk** and is, to a substantial extent, self-insured; it relies on liquidity, financial resources and borrowing capacity to meet obligations arising from a catastrophic event. **Cybersecurity and AI.** Threat actors — criminal hackers, state-sponsored intrusions, industrial espionage and employee malfeasance — target IT systems and data, including those of cloud providers and third-party vendors. Chevron states it "has experienced and will continue to experience cyber incidents of varying degrees," and that it is increasingly experiencing incidents related to third-party vendors, while noting it has not to date experienced an incident that materially affected the company. Separately, increasing use of artificial intelligence introduces risks of dependency on biased or incorrect outputs, new regulatory requirements, litigation, privacy and cybersecurity exposure and reputational harm. **Hess integration.** Success of the Hess acquisition, which closed in July 2025, depends in part on realizing anticipated run-rate cost synergies and estimated five-year production and free cash flow growth rates. Failure to realize synergies in the expected timeframe, operational challenges, diversion of management attention and unforeseen expenses could adversely affect results. A Chevron subsidiary acts as general partner of **Hess Midstream LP**, a publicly traded partnership, which may expose the company to claims of breach of duties owed to the partnership, including conflict-of-interest claims. **Litigation and government action.** Chevron produces, transports, refines and markets hazardous materials, often through joint ventures over which it has limited control; these activities can create liability or operating delays, potentially imposed without regard to Chevron's causation or contribution. **Tax law changes and windfall profit taxes.** Tax laws change regularly for political and economic reasons; returns are subject to audit worldwide with no assurance authorities or courts will agree with Chevron's positions. During periods of high industry profitability, governments — Chevron names **California and Australia** — have announced, proposed or implemented **windfall profit taxes** on energy and oil and gas companies. **GHG and climate regulation.** International agreements and national, regional and state measures aimed at limiting GHG emissions are in various stages of implementation, including carbon taxes, cap-and-trade, performance standards, restrictive permitting, procurement standards, trade barriers, minimum renewable usage requirements, financing standards and disclosure requirements — the 10-K names the U.S. Renewable Fuel Standard, California's Cap-and-Trade Program and Low Carbon Fuel Standard and CARB Advanced Clean Cars II. Such measures may curtail profitability and "render the extraction of the company's hydrocarbon resources economically infeasible," and some jurisdictions are enacting legislation imposing **retroactive liability on estimated past GHG emissions** by energy producers and refiners. **ESG attention and the company's own ambitions.** Divestment campaigns by sovereign wealth, pension and endowment funds, voluntary carbon frameworks that may exclude the sector from capital, and unfavorable third-party ESG ratings could pressure the stock price and cost of capital. Chevron also flags that investors hold divergent views — some calling for more oil and gas production rather than lower-carbon lines — creating pressure from activists and the potential for proxy fights. The company notes it has changed and/or eliminated some of its own aspirations and targets and may do so again; in the 10-K's Business Environment discussion it states that it **"is not on track to achieve the aspiration by 2050"** and that while it continues to hold the aspiration, it "will no longer use 2050 as a timeline." --- ## Management's discussion — fiscal 2025 *From the FY2025 Form 10-K, accession 0000093410-26-000078.* ### Results | Millions of dollars, except per-share | 2025 | 2024 | 2023 | |---|---|---|---| | Sales and other operating revenues | $184,432 | $193,414 | $196,913 | | Net income attributable to Chevron | $12,299 | $17,661 | $21,369 | | Diluted EPS | $6.63 | $9.72 | $11.36 | | Dividends per share | $6.84 | $6.52 | $6.04 | | Return on capital employed | 6.6% | 10.1% | 11.9% | | Return on stockholders' equity | 7.3% | 11.3% | 13.3% | Earnings by segment in 2025: Upstream **$12,822 million** (U.S. $5,815 million, international $7,007 million) against $18,602 million in 2024; Downstream **$3,022 million** (U.S. $1,375 million, international $1,647 million) against $1,727 million; All Other charges of **$(3,545) million** against $(2,668) million. **Price environment.** Brent averaged **$69 per barrel in 2025** versus $81 in 2024 and WTI **$65** versus $76, with prices lower on non-OPEC supply growth and slowing demand despite geopolitical conflict and OPEC+ supply decisions. U.S. Henry Hub natural gas averaged **$3.53 per MCF** versus $2.25, on weather-driven demand and rising LNG export demand. **Upstream.** U.S. upstream earnings fell $1.8 billion on lower liquids realizations ($2.4 billion), higher operating expenses ($2.0 billion) and higher DD&A ($1.4 billion), partly offset by higher sales volumes ($2.8 billion) and higher gas realizations ($800 million); U.S. production rose 259,000 BOE/d, or 16 percent. International upstream earnings fell $4.0 billion on higher DD&A ($2.8 billion), lower realizations ($2.0 billion), an unfavorable currency swing ($803 million) and the absence of prior-year asset sale benefits ($260 million), partly offset by higher liftings ($2.2 billion) and lower operating expenses ($470 million); international production rose 126,000 BOE/d, or 7 percent. **Downstream.** U.S. downstream earnings rose $844 million on lower operating expenses ($730 million) and higher refined product margins ($580 million), partly offset by $440 million lower CPChem earnings; refinery crude unit inputs rose 121,000 bbl/d, or 13 percent, on the Pasadena Light Tight Oil project. International downstream earnings rose $451 million on higher margins ($440 million) and the absence of prior-year impairments ($185 million), partly offset by $174 million of unfavorable currency effects. **Income taxes.** Income tax expense fell $2.5 billion in 2025, chiefly on a $7.8 billion decline in pre-tax income and the absence of the tax impacts of the 2024 Canadian asset sales. U.S. income before tax fell from $8.1 billion to $6.0 billion; international income before tax fell from $19.5 billion to $13.8 billion. ### Cash, capital and returns Cash provided by operating activities was **$33.9 billion in 2025** versus $31.5 billion in 2024, as higher TCO distributions and legacy Hess contributions more than offset lower commodity prices. Capital expenditures were **$17.3 billion** versus $16.4 billion, up 5 percent on post-acquisition Hess spend and U.S. data-center power investment; affiliate capex was $1.8 billion, 27 percent lower on reduced TCO project spend. Proceeds and deposits from asset sales and returns of investment totalled $1.8 billion versus $7.7 billion. Cash, cash equivalents and marketable securities ended the year at **$6.3 billion** versus $6.8 billion. Total debt including finance leases rose to **$40.8 billion** from $24.5 billion, reflecting $11.2 billion of public bonds issued, $4.0 billion retired at maturity, and **$10.0 billion of debt and finance lease liabilities assumed in the Hess acquisition** — of which roughly $3.7 billion relates to Hess Midstream Operations LP and is non-recourse to Chevron Corporation. Commercial paper outstanding was $4.6 billion. Chevron Corporation obligations carry an AA- rating from S&P and Aa2 from Moody's. Shareholder returns: dividends paid were **$12.8 billion** in 2025 (versus $11.8 billion), and the $6.84 annual per-share dividend made 2025 the **38th consecutive year** of an increased annual per-share payout; in January 2026 the Board raised the quarterly dividend by $0.07, roughly four percent, to **$1.78 per share** payable in March 2026. The company repurchased **$12.1 billion** of stock in 2025 (79.9 million shares) under the $75 billion 2023 Program, leaving **$36.5 billion** remaining at December 31, 2025, and guided to $2.5–3.0 billion of first-quarter 2026 repurchases. ### Outlook as stated in the 10-K - **Production:** estimated to increase **7 to 10 percent in 2026** over 2025, assuming Brent of $60 per barrel and excluding expected asset sales, including a full-year Hess contribution. - **Capital:** 2026 organic capex of **$18–19 billion** — upstream about $17 billion (nearly $6 billion for U.S. shale and tight in the Permian, DJ and Bakken; about $7 billion for global offshore, primarily Guyana, the Eastern Mediterranean and the Gulf of America), downstream about $1 billion, corporate about $0.6 billion, with about $1 billion across the budgets dedicated to lowering carbon intensity and growing new energies. Affiliate capex of $1.3–1.7 billion. - **Costs:** plans to achieve **$3–4 billion in structural cost reductions by the end of 2026**; $1.5 billion delivered in 2025, with $2 billion achieved in the annual run rate. - **Portfolio:** the company had targeted $10–15 billion of asset sales over the five years ending 2028 and generated approximately $9 billion from 2024 through January 2026; it expects **$1–2 billion in annual asset sale proceeds through 2030**. - **Decommissioning:** $297 million spent in 2025 on decommissioning obligations reverted from previously divested Gulf of America assets, with a further **$200–300 million annually anticipated through 2033**. --- ## Current quarter — second quarter 2026 *From the Form 10-Q for the quarter ended June 30, 2026, accession 0000093410-26-000167.* ### Results | Millions of dollars, except per-share | Q2 2026 | Q2 2025 | 1H 2026 | 1H 2025 | |---|---|---|---|---| | Sales and other operating revenues | $67,199 | $44,375 | $114,755 | $90,476 | | Total revenues and other income | $70,055 | $44,822 | $118,662 | $92,432 | | Income before income tax expense | $16,684 | $4,147 | $20,630 | $9,730 | | Net income attributable to Chevron | $12,072 | $2,490 | $14,282 | $5,990 | | Diluted EPS | $6.11 | $1.45 | $7.21 | $3.45 | Both year-ago columns predate the July 18, 2025 close of the Hess acquisition, which is consolidated in the 2026 periods only. Segment earnings for the quarter: **Upstream $8,182 million** (U.S. $3,541 million, international $4,641 million) versus $2,727 million a year earlier; **Downstream $4,868 million** (U.S. $2,411 million, international $2,457 million) versus $737 million; All Other charges of $(978) million, essentially flat against $(974) million. Diluted weighted average shares were 1,975 million versus 1,724 million, reflecting the 301.25 million shares issued for Hess in July 2025. ### What drove the quarter **Price.** Brent averaged **$92 per barrel in the first half of 2026** against $72 in the first half of 2025, and WTI **$83** against $68. Crude prices were volatile within the quarter: they rose sharply following the escalation of conflict in the Middle East and concern over supply disruption, then declined as those concerns eased, ending the quarter near pre-conflict levels. Henry Hub averaged $3.77 per MCF versus $3.71, easing during the quarter as added pipeline capacity improved Permian gas flows and Gulf Coast LNG maintenance reduced exports. Chevron discloses a sensitivity of approximately **$600 million of annual after-tax earnings and cash flow per $1 change in Brent**. Realizations followed. For the three months ended June 30, 2026 against the same quarter of 2025, U.S. upstream liquids realization was **$70.80/bbl** versus $47.77, and international liquids **$96.41/bbl** versus $58.88. U.S. natural gas realization for the quarter fell to $0.91/MCF from $1.75. **Volume.** Worldwide net oil-equivalent production averaged **3.97 million barrels per day in the first half of 2026**, up 18 percent year over year on the Hess acquisition and growth in the Permian and the Gulf of America. U.S. production rose 382,000 BOE/d, or 23 percent, in the quarter — **a new quarterly production record**. International production rose 292,000 BOE/d, or 17 percent, partly offset by **curtailments in the Partitioned Zone between Saudi Arabia and Kuwait caused by the Middle East conflict**. **Timing effects.** Mark-to-market treatment of economic hedges and LIFO accounting produced a **$2.9 billion adverse earnings impact in the first quarter of 2026** as commodity prices rose in March, and a favorable effect in the second quarter as prices declined in June. The quarterly report, filed August 6, 2026, puts that second-quarter benefit at **$1.5 billion**; the second-quarter earnings release furnished six days earlier, on July 31, 2026 (accession 0000093410-26-000162), puts it at $1.4 billion. This is the principal reason the six-month downstream result ($4,051 million) is below the second quarter alone. **Segment detail.** U.S. upstream earnings rose $2.1 billion on higher liquids realizations ($2.1 billion) and sales volumes ($1.1 billion), against higher DD&A ($590 million), lower gas realizations ($200 million) and the absence of a prior-year $115 million asset sale gain. International upstream rose $3.3 billion on volumes ($2.0 billion), realizations ($1.7 billion) and favorable timing effects ($570 million), against $650 million higher DD&A. U.S. downstream rose $2.0 billion on refined product margins ($1.7 billion) and $290 million higher CPChem earnings, with refineries running "reliably at record levels near capacity" (inputs up 19,000 bbl/d) even as refined product sales fell 61,000 bbl/d on weaker gasoline demand. International downstream rose $2.1 billion on margins ($1.7 billion, including favorable timing effects), a $230 million asset sale gain and a $133 million favorable currency swing — but **refinery inputs fell 63,000 bbl/d (10 percent) and refined product sales fell 186,000 bbl/d (13 percent) on supply disruption from the Middle East conflict** and weaker gasoline and diesel demand. The six-month U.S. downstream result absorbed a **$190 million litigation reserve**. **Taxes.** Income tax expense rose $2.8 billion to $4.5 billion for the quarter, while the effective tax rate **fell from 39 percent to 27 percent** on jurisdictional mix and a smaller relative burden of unfavorable tax items. The six-month effective rate was 30 percent versus 38 percent. ### Cash, capital and balance sheet Cash provided by operating activities was **$25.1 billion in the first half of 2026** against $13.8 billion a year earlier, on higher commodity prices and increased TCO distributions. Capital expenditures were **$8.6 billion** versus $7.6 billion, with the increase entirely international (international upstream capex of $3,712 million versus $2,235 million) as U.S. capex declined. Asset sale proceeds and returns of investment were $355 million versus $990 million; a net $979 million inflow came from equity affiliate loan repayments, mainly TCO. Cash, cash equivalents and marketable securities rose to **$8.5 billion** from $6.3 billion at year-end. **Total debt and finance lease liabilities fell to $37.1 billion** from $40.8 billion on maturing long-term notes, a finance lease repayment and lower commercial paper (outstanding $4.1 billion versus $4.6 billion). The company had $11.4 billion in 364-day committed credit facilities at June 30, 2026, with no borrowings outstanding. Debt-to-CFFO improved to 0.8x from 1.2x and net debt-to-CFFO to 0.6x from 1.0x. Noncontrolling interests were $5.7 billion, unchanged from year-end. Dividends paid in the first half were **$7.0 billion**. Chevron repurchased **16,255,113 shares in the second quarter at an average $184.72**, leaving approximately **$31.0 billion** available under the 2023 Program at June 30, 2026. **Structural costs.** The company **achieved its $3–4 billion structural cost reduction target six months early**, capturing $3 billion in annual run-rate savings during the second quarter, and says it plans to keep looking for further cost reductions. The accrued severance liability fell to $378 million at June 30, 2026 from $683 million at January 1, and is expected to be substantially settled by the end of 2026. ### Portfolio moves disclosed in the quarter - Completed the sale of the **Hong Kong downstream fuels and lubricants businesses**, generating proceeds of approximately **$290 million**. - Signed an agreement to sell the company's **50 percent interest in Singapore Refining Company Private Limited** and other downstream assets in Singapore, Australia, Indonesia, Malaysia, the Philippines and Vietnam; the transaction is expected to close in **2027**. Related to pending downstream sales, **$780 million of net properties, plant and equipment** was classified as assets held for sale at June 30, 2026. - Signed **heads of agreements with the Government of Iraq** to advance potential participation in the West Qurna 2 and Nasiriyah oilfield developments and an export pipeline. - Signed an agreement to develop a **West Texas power facility providing approximately 2.67 gigawatts of behind-the-meter dedicated electricity capacity to Microsoft under a 20-year power purchase agreement**. - Announced a technology licensing agreement to commercialize Chevron-developed chemical surfactant technology for improved recovery from unconventional reservoirs. ### Hess acquisition accounting Chevron acquired Hess Corporation on **July 18, 2025** for an aggregate purchase price of approximately **$48 billion**, comprising 15.38 million Hess shares purchased in open-market transactions in the first quarter of 2025 and **301.25 million Chevron shares** issued as closing consideration — about 15 percent of Chevron shares outstanding immediately after closing. Chevron assumed debt with aggregate principal of **$8.8 billion** ($5,138 million Hess Corporation notes, $3,746 million Hess Midstream Operations LP, less discounts), carried at a fair value of $9,070 million. Total liabilities assumed were $26.5 billion and noncontrolling interest related to Hess Midstream was $5.0 billion. Measured at fair value, **no goodwill or bargain purchase was recognized**; provisional fair value measurements remain subject to adjustment for up to one year from the acquisition date. ### Litigation **Louisiana coastal erosion.** Chevron entities are defendants in 35 of the cases brought by seven coastal parishes and the State of Louisiana under the State and Local Coastal Resources Management Act. In April 2025 a Louisiana state jury awarded Plaquemines Parish **$744.6 million** against Chevron entities in *Plaquemines Parish v. Rozel Operating Co.* In **April 2026 the U.S. Supreme Court held the lawsuit was related to actions taken under federal direction for purposes of the federal-officer removal statute and remanded** for further proceedings; the state-court verdict remains subject to further proceedings including potential vacatur and further litigation in federal court. Chevron has recorded an accrual of **$131 million**, does not concede the verdict's viability and plans to appeal, and states that if required to pay remediation damages in these cases it may have a material adverse effect on financial position and results. **Climate change.** Chevron entities are or were among the codefendants in **34 separate lawsuits** brought by U.S. cities and counties, seven states, the District of Columbia, Puerto Rico, two Native American tribes and a trade group. On **February 23, 2026 the U.S. Supreme Court granted certiorari in *Suncor Energy (U.S.A.) Inc. v. County Commissioners of Boulder County*** (No. 25-170) — a case in which no Chevron entity is a party — to address whether federal law precludes state-law claims seeking relief for injuries allegedly caused by interstate and international GHG emissions. Chevron says it is unable to estimate any range of possible liability and believes the suits are legally and factually meritless. **Environmental penalties.** The El Segundo Renewable Fuel Standard matter was resolved with a civil penalty of **$1,072,634 paid in April 2026**. On June 24, 2026 the Colorado Energy & Carbon Management Commission approved an Administrative Order by Consent assessing a total civil penalty of **$6,416,735**. Decommissioning obligations for previously divested assets carried a liability balance of **$2.0 billion** at June 30, 2026. ### Geopolitical exposure flagged for the period ahead Chevron notes that the Middle East conflict has already caused **production curtailments in the Partitioned Zone and at CPChem assets in Saudi Arabia and Qatar**, and increased risks in lifting and transporting physical cargoes; the situation "remains volatile with the potential for escalation." The Caspian Pipeline Consortium, the primary export route for Tengiz production, has experienced **drone attacks on CPC and third-party infrastructure and vessels**. On Venezuela, Chevron delivered limited crude to the U.S. through January 2026 and, under authorizations aligned with current U.S. sanctions policy, expects to continue delivering crude from its Venezuelan assets to the U.S. and international markets — while noting current geopolitical developments could affect those operations. The company also flags growing threats from sophisticated cyberattacks leveraging artificial intelligence. --- ## Subsequent events *From the Form 10-Q for the quarter ended June 30, 2026, accession 0000093410-26-000167.* The quarterly report contains no separately captioned subsequent-events note. The following post-period developments are disclosed within it: - **Dividend declared.** In **July 2026** the Board declared a quarterly dividend of **$1.78 per common share, payable in September 2026** — unchanged from the rate set in January 2026. - **Colorado penalty payments.** Under the Administrative Order by Consent approved by the Colorado Energy & Carbon Management Commission on June 24, 2026, Chevron **paid $400,000 of the $6,416,735 assessed civil penalty in July 2026**. In satisfaction of a further $1,204,184 of the penalty, Chevron must pay **$783,003 to fund public projects designated by the Commission on or before June 24, 2027**. The remaining **$4,812,551 is suspended** and will be reduced by 25 percent for each year Chevron completes specified actions during a four-year compliance period. - **Commodity prices after quarter-end.** Brent **ended July at about $97 per barrel** (against a $92 first-half average) and WTI at about **$85 per barrel**, with prices rising in July as continued conflict in the Middle East contributed to market volatility. Henry Hub **ended July at about $2.64 per MCF**, well below its $3.77 first-half average. The Singapore Refining Company divestment and the Iraq heads of agreements were signed during the quarter and remained uncompleted at the filing date. Beyond the items listed above, the quarterly report discloses no post-period acquisition, divestiture, financing or borrowing.