"Double driving force of Hess and high-profit oil fields" Chevron Corporation (CVX.US) cash flow grew counter-cyclically by 20%

American oil and gas giant Chevron Corporation (CVX.US) significantly increased its oil production and cash flow after completing its first combined profit and loss statement following the $53 billion acquisition of rival Hess Corporation. This allowed the company to exceed profit expectations in this cycle of long-term weakness in crude oil prices, bringing the company's cash flow to a significant expansion turning point. Financial data shows that Chevron Corporation's revenue in Q3 was $49.73 billion, a decrease of 1.9% compared to the same period last year, surpassing expectations by $2.31 billion. Net profit was approximately $3.6 billion, a decrease of 20%, but Chevron Corporation's adjusted earnings per share in the third quarter were $1.85, exceeding analysts' average expectation of $1.66. This American oil and gas behemoth, along with one of its largest competitors, the European rival Shell, both announced stronger-than-expected performance, while another U.S. Energy Corp. giant, Exxon Mobil Corporation, also reported higher-than-expected profits. As OPEC and its allies continue to increase oil supply, the international crude oil benchmark, Brent crude oil prices, are heading towards the biggest annual decline in five years. This sustained increase in production, along with expectations of oversupply and weak oil prices, has significantly weakened the oil industry's lucrative profits after the COVID-19 pandemic and the halo of President Donald Trump's pro-traditional energy industry regulatory structure. Low oil prices, high volatility, and concerns about limited reserves of fossil fuels on Earth indicate that despite the United States becoming the world's largest oil and natural gas producer, the energy sector's weight in the S&P 500 index remains less than 3% today. Financial data shows that Chevron Corporation's global production increased by 21%, reaching the equivalent of 4.1 million barrels per day, mainly benefiting from the incorporation of Hess's 30% oil and gas project equity in the Stabroek Block operated by Exxon Mobil Corporation in Guyana. Even during periods of weak oil prices, traditional energy giants like Chevron Corporation and Shell have achieved profit expansion beyond expectations through increased production. Therefore, despite the significant and prolonged decline in international oil prices this year compared to the early stages of the Russia-Ukraine conflict, Chevron Corporation's cash flow from operating activities increased significantly by 20% to $9.9 billion. "We have previously discussed the significant turning point in cash flow that was coming, and we saw that in the third quarter," said Chevron Corporation CFO Pierre Breber in an interview, emphasizing that Hess' assets "are already significantly impacting performance." Big Oil giants like Chevron Corporation, Exxon Mobil Corporation, face the biggest challenge in proving to Wall Street that they can maintain huge dividends and long-term stock buybacks in a situation where oil prices may remain low for an extended period. The latest financial data shows that Chevron Corporation repurchased $2.6 billion in stocks in the third quarter, almost the same as the previous period, after the oil and gas giant had lowered its stock buyback earlier in the year. The company also paid dividends of up to $3.4 billion, significantly increasing dividends after completing the acquisition of Hess. Big Oil stocks collectively outperform Brent crude oil prices Shell and BP p.l.c. Sponsored ADR are the oil and gas companies with the highest gains so far in 2025. Chevron Corporation CEO Mike Wirth has taken a series of measures to turn the oil and gas giant into a stable cash flow generator capable of better withstanding the notorious cycles of oil and gas "booms and busts." Excluding the additional impact from Hess' assets, Chevron Corporation's oil and gas production has already surged towards a 7% growth this year and is expected to further increase by 5% in 2026, thanks to so-called high-margin oil and gas production from fields in Kazakhstan and the Gulf of Mexico. Even if oil prices fall to $20 per barrel, these fields can still generate huge profits. For the past month, U.S. crude oil benchmark prices, known as West Texas Intermediate crude oil, have been trading around $60 per barrel. Chevron Corporation has also boosted profitability and free cash flow by curbing production growth in capital-intensive shale oil fields (such as the Permian Basin and the Denver-Julesburg Basin) and reducing its global workforce by 20%. "Regardless of the price environment or any pressures we may face in the short term, we are in a very favorable position," Breber said at the earnings conference. Despite the global benchmark crude oil prices Brent crude oil prices falling by around 13% this year, Chevron Corporation's stock price has risen against the trend by 6% so far this year.