Avi Salzman

Chevron has been on a roll as it gets set to report second-quarter earnings on Friday. The company just closed its acquisition of oil producer Hess, and got permission from the Trump administration to resume operations in Venezuela.

Those developments won't show up in second-quarter numbers, which are likely to be relatively downbeat. Analysts expect Chevron to post earnings per share of $1.73, according to FactSet, versus $2.55 a year ago. Oil prices have fallen from last year's level, and the company has slowed production growth. Shares are up 4% this year, versus a rise of 8% for the S&P 500.

But fundamentally, Chevron is in the best shape it has been in years. Finalizing the Hess deal was no easy feat. It had been in limbo for nearly two years, because Exxon Mobil had said that it should have a right to buy Hess' stake in a major oil project in Guyana that Exxon operates. Chevron won an arbitration case over that issue just a few weeks ago, and completed the acquisition.

Hess' stake in the Guyana project fills a void for Chevron. Investors had been worried that Chevron does not have enough growth opportunities around the world, compared with Exxon. The Guyana project is expected to produce hundreds of thousands of barrels' worth of oil every day for the rest of the decade and beyond.

Among the big questions for Chevron now is what the company will do with its stock-buybacks after announcing plans last quarter to reduce their pace. Any sign that buybacks are ramping up again should help the stock.

Write to Avi Salzman at avi.salzman@barrons.com

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July 31, 2025 14:49 ET (18:49 GMT)

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