Chevron Q3 2022 Earnings Report

Chevron EPS Results

• Actual EPS: $5.56
• Consensus EPS: $5.02
• Beat/Miss: Beat by +$0.54
• One Year Ago EPS: $2.96

Chevron Revenue Results

• Actual Revenue: $66.64 billion
• Expected Revenue: $61.44 billion
• Beat/Miss: Beat by +$5.20 billion
• YoY Revenue Growth: +49.10%

Chevron Announcement Details

• Quarter: Q3 2022
• Date: 10/28/2022
• Time: Before Market Opens
• Conference Call Date: Friday, October 28, 2022
• Conference Call Time: 11:00AM ET

Chevron (NYSE:CVX) (NYSE: CVX) is an American multinational energy company engaged in virtually all aspects of the oil and gas industry. As an integrated energy firm, Chevron’s core activities include upstream oil and natural gas exploration and production, midstream transportation and storage, downstream refining and marketing of fuels and lubricants, and petrochemical manufacturing through joint ventures and subsidiaries. The company markets fuels under brands such as Chevron, Texaco and Caltex and supplies a range of products and services to retail customers, industrial users and commercial fleets worldwide.

Chevron traces its corporate lineage to the early petroleum companies that eventually became Standard Oil of California and has evolved through significant mergers and restructurings, including the acquisitions of Gulf Oil and Texaco. Headquartered in San Ramon, California, the company operates globally with assets and projects across North and South America, Africa, Europe, the Middle East and the Asia–Pacific region. Its operations span conventional and unconventional onshore and offshore oil fields, liquefied natural gas (LNG) projects, refining complexes and fuels marketing networks.

Management has emphasized a strategy that balances continuing investment in core upstream and downstream businesses with selective growth in lower‑carbon energy solutions. Chevron participates in chemical production through Chevron Phillips Chemical and has announced initiatives to expand its activities in natural gas, hydrogen, carbon capture and other lower‑emissions technologies. Mike Wirth serves as chairman and chief executive officer, leading a company that focuses on long‑term energy supply, operational reliability and transitional opportunities as global energy markets evolve.

Chevron Q3 2022 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Chevron generated more than $5 billion in free cash flow for the sixth consecutive quarter and expects to beat its 2021 free cash flow record.
• Positive Sentiment: The company returned over $5 billion to shareholders in Q3 and repurchased shares at the top end of guidance, ending the quarter with net debt under 5%.
• Neutral Sentiment: Cash capital expenditures rose to $3 billion in Q3 (a 50% increase YoY), and 2023 CapEx is expected near the top end of the $15–17 billion medium-term guidance.
• Negative Sentiment: In Q4, Chevron will pay over $700 million to terminate an LNG regasification contract at Sabine Pass, impacting earnings and cash flow.
• Negative Sentiment: A planned turnaround at the Richmond refinery drove higher operating expenses and reduced downstream volumes in Q3 and will continue to affect results.

Presentation

[Operator]

Good morning. My name is Sarah, and I will be your conference facilitator for today. Welcome to Chevron's Q3 2022 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's remarks, there will be a question-and-answer session, and instructions will be given at that time. If anyone should require assistance during the conference call, please press star and then zero on your touchtone telephone. As a reminder, this conference call is being recorded. I will now turn the conference over to the General Manager of Investor Relations of Chevron Corporation, Mr. Roderic Green. Please go ahead.

[Roderick Green, GM of Investor Relations at Chevron]

Thank you, Sarah. Welcome to Chevron's Q3 2022 earnings conference call and webcast. I'm Roderic Green, GM of Investor Relations. Our chairman and CEO, Mike Wirth, and CFO, Pierre Breber, are on the call with me. We will refer to the slides and prepared remarks that are available on Chevron's website. Before we begin, please be reminded that this presentation contains estimates, projections, and other forward-looking statements. Please review the cautionary statement on slide 2. I will now turn it over to Mike.

[Mike Wirth, Chairman and CEO at Chevron]

Thank you, Roderick, and thanks everyone for joining us today. We continue to see a challenging and dynamic macroeconomic and geopolitical environment. Current events highlight the importance of balancing economic prosperity, energy security, and environmental protection. In line with these three imperatives, Chevron remains focused on our objective to safely deliver higher returns and lower carbon. During the Q3, we continued to make progress by delivering return on capital employed in the mid-20s%, returning more than $5 billion to shareholders for the Q2 in a row, and investing to grow both our traditional and new energy businesses.

[Mike Wirth, Chairman and CEO at Chevron]

Earlier this week, we released our methane report with specific disclosures about our aim to be a leader in methane emissions management. Our goal is simple. Keep methane in the pipe. I encourage you to read our report available on chevron.com. Our strategy remains clear and consistent.

[Mike Wirth, Chairman and CEO at Chevron]

Our results keep getting better. While future market conditions are uncertain, we're well-positioned to deliver value to our shareholders in any environment. With that, I'll turn it over to Pierre.

[Pierre Breber, CFO at Chevron]

Thanks, Mike. Q3 financial results were strong. Included in the quarter were $177 million of pension settlement costs and positive foreign currency exchange effects of $624 million. The appendix of this presentation contains a reconciliation of non-GAAP measures. We repurchased shares at the high end of our guidance range and ended the quarter with a net debt ratio under 5%. Cash CapEx was $3 billion, up over 50% from last year. For the sixth consecutive quarter, Chevron's free cash flow exceeded $5 billion. We're on track to beat 2021's free cash flow record. Adjusted Q3 earnings were up more than $5 billion versus last year. Adjusted upstream earnings increased mainly on higher realizations, partially offset by inventory timing impacts. In other, tax benefits are more than offset by higher operating expenses and other costs.

[Pierre Breber, CFO at Chevron]

Adjusted downstream earnings increased primarily on higher refining margins and favorable inventory timing impacts. The planned turnaround at our Richmond refinery was a driver of higher OpEx and lower volumes for the period. In other, lower chemicals earnings were partly offset by higher trading gains. Compared with last quarter, adjusted earnings were down modestly. Adjusted upstream earnings increased primarily on higher liftings and tax benefits, partially offset by higher charges for abandonment accruals and exploration leases. Adjusted downstream earnings decreased primarily on lower refining margins and lower volumes and higher OpEx due to the Richmond planned turnaround. Partially offsetting is a favorable swing in timing effects. Q3 oil equivalent production was flat compared to a year ago.

[Pierre Breber, CFO at Chevron]

Growth in the Permian, along with the absence of turnarounds and Hurricane Ida impacts, were offset by the expiration of our contracts in Thailand and Indonesia and the sale of our Eagle Ford asset. Now, looking ahead. In the Q4, we expect modest turnarounds. After producing a record number of LNG cargos in Q3, we expect fewer spot cargos out of Australia due to maintenance and summer temperatures. In the Q3, we received a dividend from Angola LNG. In the Q4, we expect dividends from TCO and Angola LNG, and we expect to end 2022 at the top end of our full year guidance for affiliate dividends. As a reminder, Chevron pays a 15% withholding tax on TCO dividends that lowers earnings and cash flow.

[Pierre Breber, CFO at Chevron]

In the Q4, we will pay over $700 million associated with the early termination of a long-term LNG regas contract at Sabine Pass. This payment was accrued previously through working capital. Also, we expect to buy back shares at the top end of our guidance range. In closing, the Q3 showed again how Chevron's higher returns, lower carbon objective creates value for all of our stakeholders. Back to you, Roderick.

[Roderick Green, GM of Investor Relations at Chevron]

That concludes our prepared remarks. We are now ready to take your questions. Please try to limit yourself to one question and one follow-up. We will do our best to get all your questions answered. Sarah, please open the lines.

[Operator]

Thank you. If you have a question at this time, please press star one on your touchtone telephone. You may ask one question and a follow-up question. If your question has been answered or you wish to remove yourself from the queue, please press star two. If you are listening on a speakerphone, we ask you to please lift your handset before asking your question to provide optimum sound quality. Again, if you have a question, please press star one on your touchtone telephone. Our first question will come from Jeanine Wai.

[Mike Wirth, Chairman and CEO at Chevron]

Morning, Jean Ann.

[Operator]

With Barclays. Jean Ann, your line is open. Please go ahead.

[Jean Ann Salisbury, Senior Research Analyst at Barclays]

Hello?

[Mike Wirth, Chairman and CEO at Chevron]

Jeanine?

[Jean Ann Salisbury, Senior Research Analyst at Barclays]

Yes. Can you hear me now?

[Mike Wirth, Chairman and CEO at Chevron]

Yes, I can. Yeah, go ahead.

[Jean Ann Salisbury, Senior Research Analyst at Barclays]

Okay, perfect. Sorry about that. You'd think I'd have that right by now. Well, good morning again. Thank you for taking our questions. Our first question is on U.S. production growth. Either Mike or Pierre, the Permian was relatively flat quarter-over-quarter, averaged a little under 700,000 a day so far this year. Given industry dynamics and supply chain challenges, can you provide an update on how operations are going? I guess what we noticed is that with only one quarter left in the year, it looks like you'll be closer to the lower end of the 700,000-750,000 guidance range.

[Jean Ann Salisbury, Senior Research Analyst at Barclays]

We're just wondering if that's by design or if there's external factors driving that because we also noticed this morning one of your integrated peers in the Permian lowered their 2022 growth expectations.

[Mike Wirth, Chairman and CEO at Chevron]

Yeah, JeanAnn you know, my numbers say, year to date, Permian production a little over 700,000 barrels a day, up about 15% from first three quarters of last year, which was just a touch over 600. We're seeing good growth. For the quarter itself, production was up about 10% at 708,000 barrels a day versus 646 in the same quarter last year. I think the thing that some people may miss is, during the pandemic, drilled but uncompleted well inventories really grew. Rightfully so, we didn't need to frack wells and bring them online when there was, declining demand for the production. We kept some drilling going.

[Mike Wirth, Chairman and CEO at Chevron]

That inventory grew. As we went back to work, the first thing, we did was send completion crews out and start to bring the DUCs online. You saw that through the back half of last year and certainly the first part of this year, which may have misled a little bit in terms of the rate of growth because this was this kind of surge capacity. We're back to factory drilling now. Our DUC inventory is kind of in line with what our plan would suggest it would be. We're seeing production level out at a growth rate that is more the kind of underlying rate that you should see. We likely will be towards the lower end of the range.

[Mike Wirth, Chairman and CEO at Chevron]

You know, we get some non-ratable bookings from our non-operated joint ventures. We give you a range because we expect to be in the range, but we don't always hit the high end of the range. In this case, we'll be towards the lower end. We're not changing guidance for, this year or our forward guidance.

[Pierre Breber, CFO at Chevron]

Janine, I'll just add, that low end of the range, it represents 15% year-on-year growth, so that's very strong growth.

[Jean Ann Salisbury, Senior Research Analyst at Barclays]

Okay, agreed. Thank you for that clarification. Maybe, Pierre, just sticking with you here. In terms of your comments earlier this morning, I think I caught it in an article that 2023 CapEx would be at the top end of the $15 billion-$17 billion medium-term guidance range. We know there's a lot of moving pieces, and I don't know if you're gonna wanna talk about this 'cause you'll have to, you'll release it in a month or so. The most obvious moving pieces that we see next year are that TCO spend starting to roll off, and some of that will be absorbed by the Permian, which we know is gonna garner some more capital next year. Our question is capital trending to the higher end of that range?

[Jean Ann Salisbury, Senior Research Analyst at Barclays]

Is that more a reflection of Chevron responding to the macro environment, or was that always part of the plan and maybe just some inflation is pushing the capital a little higher? Thank you.

[Pierre Breber, CFO at Chevron]

It was always part of the plan for us to increase investment coming out of COVID, as Mike just spoke about. We're in the final stages of approving our business plan and our capital budget. As you said, we'll announce that in December. You should expect it to be near the top end of the range, again, consistent with what our plans have been. We're gonna increase in the Permian and in other locations. We do have some cost inflation that is also will contribute to that. We'll share all those details when we announce in December. That's about a 20% increase in next year relative to where we think we'll end up this year. Year to date, we're a little bit below our capital budget on an organic basis.

[Pierre Breber, CFO at Chevron]

That'll result in about a 20% increase, which is very, again, in line with our guidance, and consistent with increasing investment in growing energy supplies.

[Mike Wirth, Chairman and CEO at Chevron]

Thanks, Jean Ann Salisbury.

[Operator]

Our next question will come from Neil Mehta with Goldman Sachs.

[Neil Mehta, Managing Director and Senior Equity Research Analyst at Goldman Sachs]

Good morning, Mike, Pierre, team. Thank you.

[Neil Mehta, Managing Director and Senior Equity Research Analyst at Goldman Sachs]

The first question was around Kazakhstan. Mike, we'd just love your perspective on how you're viewing the assets out there, both the development of Tengiz, and then as you think through evacuating barrels via the CPC pipeline.

[Mike Wirth, Chairman and CEO at Chevron]

Sure. I'll start with the project. We're on track to complete bulk construction by the end of this year. No change to our cost or schedule guidance. We're 97% complete on construction right now. There's still a lot of work to be done, but the risk and uncertainty are certainly narrowing, and the remaining risks tend to be smaller in scale and potential impact. We're moving into commissioning, systems testing and startup activities. We built a new integrated operations control center that I visited, which is fully operational with systems online. Our drilling program is complete. The final metering station is online.

[Mike Wirth, Chairman and CEO at Chevron]

Very good progress on the construction side, and we'll continue to update you as we progress toward WPMP, the pressure management startup indicated right now for second half of 2023, and then the future growth project in 2024. On the CPC and the pipeline, there are no constraints on our ability to move barrels on that line. We've flowed everything out that we've been producing. You've probably seen the media reports that a couple of the single point moorings are offline right now for some repairs to the buoyancy system. Those repairs are underway and expected to be completed shortly.

[Mike Wirth, Chairman and CEO at Chevron]

At this point, everything flowing and looks like will continue to do so.

[Neil Mehta, Managing Director and Senior Equity Research Analyst at Goldman Sachs]

Yeah, thanks, Mike. Mike, you spent many years as a downstreamer as well and have great perspective on the global refining system. I don't think I've ever thought that the cracks would be up here. Just love your perspective of where we are in terms of the refining market, how do we work our way through the bottlenecks that seem to be existing in the system and what that means for your downstream business?

[Mike Wirth, Chairman and CEO at Chevron]

Sure. You know, it's been an interesting couple of years in the refining sector, Neil. With COVID, we actually saw, through that period of time, some refineries shut down around the world that maybe at a rate greater than we would have expected before, as the economics really collapsed as demand collapsed. There have been some refineries in the U.S. that have been taken offline after storm damage or operating incidents that are not coming back. We see others being converted to renewable diesel. You had a constraint or a reduction in refining capacity that occurred over the last couple of years in a way we really haven't seen previously.

[Mike Wirth, Chairman and CEO at Chevron]

The other thing that happened is some of the new builds that are in various stages of development, primarily in the Middle East or Asia, slowed down during COVID. You know, a lot of the industry slowed activity until we had a better view on how we were gonna come through that period of time. I think those will, those will come back into development and eventually online, which will ease some of these global constraints. The system's tight right now. What you see is when you have some maintenance that runs long, some unplanned events, as we've seen on the West Coast, or when you see things like the strike that we've seen in France here recently, markets tighten up really quickly.

[Mike Wirth, Chairman and CEO at Chevron]

That you know sends a price signal to try to bring supplies in from further away. The entire refining complex right now is a little more tightly balanced than it historically has been. I think in the short term, if you wanna call that the next year, plus or minus, probably stays that way, maybe a little bit longer, to some degree. I think as you see some of this new capacity come online, we get back into a situation where it's not quite as finely balanced as it is today. No doubt, we're in a market that we really haven't seen probably in my career in terms of the overall tightness on supply and demand.

[Neil Mehta, Managing Director and Senior Equity Research Analyst at Goldman Sachs]

Thanks, Mike.

[Operator]

Our next question will come from Jason Gabelman with TD Cowen.

[Jason Gabelman, Energy Equity Research Analyst at TD Cowen]

Hey, guys. Good morning. Thanks for taking my question.

[Mike Wirth, Chairman and CEO at Chevron]

Good morning, Jason.

[Jason Gabelman, Energy Equity Research Analyst at TD Cowen]

Just thinking about your buyback range, $5 billion-$15 billion. 3Q is a strong quarter from a fundamental perspective, but maybe feels more repeatable to me than as an upside case 2Q did. In 3Q, you still generated free cash flow well in excess of both your dividend and the buyback at the top end of the range. My question is, do you think you could go further than the $15 billion at the top end, given you still have a good amount of deleveraging happening at this point in the cycle, that doesn't seem quite as extraordinary as 2Q did?

[Mike Wirth, Chairman and CEO at Chevron]

Yeah, Jason, you know, we've actually increased our rate of buybacks three times this year. We announced the first one at the end of last year, but we've steadily moved the range up and the rate of re-purchases up. We're at a at an all-time high in terms of the rate of share repurchases. You're right, we've got strong cash flow right now, which allows us to, support all of our financial priorities and maintain the strong balance sheet. I think the thing, that I just would reemphasize is we wanna maintain the buyback program throughout the cycle. We're not procyclical. We're not countercyclical.

[Mike Wirth, Chairman and CEO at Chevron]

We wanna operate across the cycle, so that our shareholders see consistency out of us and know that they can count on that. We're positioned in a way where we're confident we can maintain that. We regularly reassess it as our view on, our business and commodity markets continues to evolve. We'll continue to do that and apprise you of anything further. Pierre, do you wanna add anything to that?

[Pierre Breber, CFO at Chevron]

I'll just point out that, we increased our dividend 6% earlier this year. We've been growing our dividend at a compounded annual growth rate of 6% for 15 years, and that is our first financial priority. There's a lot of tension on the buyback, but it's clearly our fourth priority after sustaining and growing the dividend, investing to grow both traditional and new energy businesses, maintaining a strong balance sheet. As Mike said, we intend to do it across the cycle for multiple years.

[Jason Gabelman, Energy Equity Research Analyst at TD Cowen]

Great. Thank you. Just looking at your bridge for international upstream, and I think Pierre may have mentioned in his remarks as well, you have this tailwind, about $300 million from tax. Is that an impact from country mix, or are there other moving pieces we should think about there? Should we think about this as sustainable?

[Pierre Breber, CFO at Chevron]

In terms of international upstream, the benefit in the Q3 is primarily around record LNG cargoes out of Australia, from, I think Gorgon and Wheatstone. We're very happy to see that at the time when the world needed the energy. Again, a lot of that is under long-term contracts, but that included cargoes in the spot market, which we know were at high prices. We signaled that we expect fewer LNG cargoes in the Q4 because during the summer temperatures in the Southern Hemisphere, it's just how you just produce less. Then we do have a pit stop that is planned for one of our facilities.

[Pierre Breber, CFO at Chevron]

In terms of tax items, those are items that can be one time in nature, and so I would not look for those to be necessarily repeating.

[Jason Gabelman, Energy Equity Research Analyst at TD Cowen]

Thank you.

[Mike Wirth, Chairman and CEO at Chevron]

Thank you, John.

[Operator]

Our next question will come from Roger Read with Wells Fargo.

[Roger Read, Managing Director and Senior Equity Research Analyst at Wells Fargo]

Yeah, good morning.

[Mike Wirth, Chairman and CEO at Chevron]

Roger.

[Roger Read, Managing Director and Senior Equity Research Analyst at Wells Fargo]

Maybe just to ask a question that kind of ties a little bit into the question on the Permian, maybe, as you said, lower end and the non-op portion and the CapEx discussion. But just a broad question on inflation, and not just inflation in the price sense, but some of the productivity challenges that come when you start getting busier. I mean, you've got, as good a global footprint as anybody, and I'm just curious how you'd characterize that as you look across. Is it becoming more challenging to mitigate some of those issues?

[Mike Wirth, Chairman and CEO at Chevron]

Yeah, Roger, you know, I like to tell people we plan our work and work our plan. You know, frankly, if you go back to pre-COVID, a trajectory that we pretty much have stayed right on, even with the interruption of COVID. In terms of contracting for rigs, completion crews, pipe, sand, you name it, we tend to have a longer term visibility into that. We commit to our service providers earlier, and that can result in both quality and availability of people, equipment, et cetera. We don't see any meaningful constraints on our ability to execute our program.

[Mike Wirth, Chairman and CEO at Chevron]

Certainly, we are seeing, some cost inflation, and the Permian is probably the strongest that we see around the world, kind of into the low double digits, year-over-year. In other parts of our portfolio, the cost pressures are probably a little bit less, and the constraints aren't quite as pressing. You know, I think you'll see a little bit of that in our capital guidance as it comes out, as we wrap up our planning and we look to next year.

[Mike Wirth, Chairman and CEO at Chevron]

I do think that it is probably a very real, I don't wanna call it a governor, but a constraint on the pace of industry activity and ramp up, as you know, as we get into the next year. You hear other people talking about it from their point of view, and I'll let them comment. Yeah, it's very real and we've seen this movie before. In the Permian, we've seen it up in the oil sands, a decade earlier. You know, in a cyclical business, this is part of it.

[Roger Read, Managing Director and Senior Equity Research Analyst at Wells Fargo]

Yeah, for sure. Follow-up question. Renewable natural gas, RNG, we saw, a big acquisition announced here a few weeks ago on that front. You've been one of the leaders in it. I was just curious, as you look at what's been going on in terms of some of the legislation that's come out federally as well as just the extent of the impact of the LCFS in California. Any updates we should think about in the RNG business? You know, one of the things mentioned in that acquisition was, the position that company already had in terms of, I guess you'd call it leaseholds, right, on landfills and stuff, and just characterize kind of where you are relative to where you wanna be and where maybe this competitor is setting up.

[Mike Wirth, Chairman and CEO at Chevron]

Sure. We feel very good about where we are. We're a leader in RNG, leveraging strengths across the entire value chain, from feedstock to customer. We've been the partner of choice for a lot of the dairy farmers. We've got a strong brand to pull through. We've got a really strong market position in California, where the LCFS provides the strongest incentives for this. We like the position that we've built up. We've got 75 CNG sites online or in progress right now through the retail site. You know, our efforts we were an early mover and we've preferentially focused on dairy as opposed to landfill gas.

[Mike Wirth, Chairman and CEO at Chevron]

You know, there certainly are others that are active in this area. I don't wanna comment on how somebody else looks at things. I would just say, our business is up and running and we're supplying customers today, not kind of planning, out into the future and kind of banking on that. I mean, we intend to grow it further, but it's a real business for us today and it's performing well.

[Roger Read, Managing Director and Senior Equity Research Analyst at Wells Fargo]

Great. Thank you.

[Mike Wirth, Chairman and CEO at Chevron]

Thanks, Roger.

[Operator]

Our next question will come from Devin McDermott with Morgan Stanley.

[Devin McDermott, Executive Director at Morgan Stanley]

Hey, good morning. Thanks for taking my questions.

[Mike Wirth, Chairman and CEO at Chevron]

Morning, Devin.

[Devin McDermott, Executive Director at Morgan Stanley]

I wanted to stick with new energies first. A few weeks ago, there was an announcement that you joined a consortium to look at a hydrogen ammonia project in the Gulf Coast. I was wondering if you could talk in a little bit more detail around that. Then, more broadly with the Inflation Reduction Act passage, how you're thinking about the opportunity set in your new energies platform over the next few years.

[Mike Wirth, Chairman and CEO at Chevron]

Sure. We're excited about the announcement to work with a number of really good partners to try to develop hydrogen opportunities there on the Gulf Coast. You know, one of the things I think you're gonna see in these new energies businesses as they evolve is we're gonna have to build entire new value chains. That means we're gonna partner with different people who have expertise in different parts of these value chains and can bring technology, can bring customers, can bring experience to a venture that you know, no one company necessarily would have all of that, but collectively, we can work with people that can build these new value chains. You know, it's early days on many of these things.

[Mike Wirth, Chairman and CEO at Chevron]

We're studying all the different opportunities in terms of blue hydrogen, green hydrogen. There's a lot of different colors that are, you know, possible as you get down into the details of it, and it will require significant investment. I don't wanna get ahead of ourselves here. This is to really develop well-informed perspectives on the investment opportunities, the business models, and ultimately how we would build a business up there. It's exciting. There are high-quality partners that we are working with, and I think you'll see more of these efforts announced here. We've got a lot of them that we're working on around the world, not just here in the U.S.

[Devin McDermott, Executive Director at Morgan Stanley]

Great. Thanks so much. Look forward to seeing the additional details there over time. My second question is actually on M&A and just consolidation. If you think back over the last few years, you've had a great track record, the Noble Energy deal in 2020, Renewable Energy Group more recently. I was wondering if you could talk a little bit more about how you're viewing the landscape for further acquisitions upstream, downstream, and even new energies going forward.

[Mike Wirth, Chairman and CEO at Chevron]

Sure, Devon. You know, we're always looking. We've got an evergreen process where we scan all the different sectors that are of interest to us. We watch companies, we watch sectors, we watch opportunities. We've had a pretty high bar, which is why we've only done a few deals. As you say, we feel like the deals we've done are likely to turn out well. We've got a strong portfolio. We've got a really strong base case; we don't need to do a deal unless it really improves on what we expect to deliver otherwise. I you know would just say we're gonna continue to be very disciplined.

[Mike Wirth, Chairman and CEO at Chevron]

We don't have an open checkbook even when times are good like this, especially when times are good like this. You know, we walked away from a deal a few years ago rather than chase value out of it. We've sold assets out of our portfolio at well times, and as you say, the last couple of deals were done at a pretty good time. You know, over time, I think in the oil and gas business, there's likely to be some more consolidation. You need fewer and stronger companies. That normally happens at the bottom of the cycle rather than at the top of the cycle.

[Mike Wirth, Chairman and CEO at Chevron]

In new energies, there's a lot of activity to Devon’s question, and I think there's a very active market out there where you could see some things come together because nobody has all the pieces. I think as you look at building these businesses, we're gonna find combinations probably are necessary to you know, to actually begin to put those pieces together. You know, we're gonna be disciplined as we have been all along, and if we do anything, we'll come out to explain to you how it's gonna create value for shareholders.

[Devin McDermott, Executive Director at Morgan Stanley]

Great. Thank you.

[Operator]

Our next question will come from Doug Leggate with Bank of America.

[Doug Leggate, Senior Managing Director and Equity Research Analyst at Bank of America]

Thanks, excuse me. Good morning, everyone.

[Mike Wirth, Chairman and CEO at Chevron]

Good morning, Doug.

[Doug Leggate, Senior Managing Director and Equity Research Analyst at Bank of America]

Good morning, Mike or Pierre. Maybe I've got one for each of you guys. I'll go to Pierre first. Pierre, I think or both of you guys have been very clear about managing the buyback through the cycle, and I think we'd all, you know, we all probably agree that your breakeven is now one of the best in the industry. You still end up building a ton of cash, and your share price is at, you know, I guess, pretty close to an all-time high.

[Doug Leggate, Senior Managing Director and Equity Research Analyst at Bank of America]

I'm just curious, the last time you had this situation, you had multiple parallel projects going on to manage almost close to a net debt zero balance sheet. What's to prevent you from building cash on the balance sheet and being opportunistic, whether it be through M&A or whether it be a cyclical opportunity to buy back your shares at a lower level? I'm just curious how you think about that.

[Pierre Breber, CFO at Chevron]

We've had a philosophy that goes back a long time and a track record, again, I think that speaks for itself of 35 years of dividend increases, again compounding at 6% for the last 15 years. Our investments in our traditional new energy growing both our guidance on upstream production growth is 3% compounded. We're now the second-largest biorenewable diesel producer in the country with our Renewable Energy Group acquisition. When we generate cash in excess of that, it first goes to the balance sheet. We've been very clear that our stated net debt ratio is between 20%-25%. That's still a very strong balance sheet.

[Pierre Breber, CFO at Chevron]

If you recall, as we entered COVID, we were the only company that showed a stress test at $30 Brent, and our net debt ratio was gonna go into the low 30s if in fact we would've had two years at $30. That would've been where many of our peers started into COVID. We've always maintained a strong balance sheet, and we think that's appropriate over the cycle to be in that range. We're well below that. Our net debt is under 5%, so that's just a function of cash coming in and our just commitment to not be pro-cyclical. We could have a larger buyback program today, absolutely, if we wanted to just peg our net debt ratio at a higher level.

[Pierre Breber, CFO at Chevron]

I think our shareholders would appropriately question that strategy as not being across the cycle. We're setting the buyback at a level that allows us to maintain it across the cycle. When prices do correct, we'll continue to buy back shares near the top end of the range that we've been talking about. In terms of acting countercyclically in terms of M&A or any kind of major capital project, we have the capacity to do that at all kinds of balance sheets. We've shown that on M&A, we use equity because we think it makes a lot of sense. There's oil price risk in any kind of transaction, so we don't need to do it all with cash. It'll come with debt, very likely.

[Pierre Breber, CFO at Chevron]

We wanna have some capacity, but using equity in oil deals makes a lot of sense. Again, we have a great, you know, a great portfolio of projects, but we've shown a 10-year profile in addition to our five-year guidance where the growth continues. We have a lot of great projects to choose from. The goal here is to sustain and grow the enterprise with the lowest capital possible. We're more capital and cost efficient than we've ever been. We've talked about that. We're not really paid for growth by the market, so we're growing at a very appropriate rate, strong rates for the next 5 years.

[Pierre Breber, CFO at Chevron]

Again, we've shown beyond that, but we certainly have the balance sheet and the capability to do more if we think, again, as Mike said, it's in the interest of our shareholders.

[Doug Leggate, Senior Managing Director and Equity Research Analyst at Bank of America]

Very thorough answer. Thank you, Pierre, for that. Mike, I hate to put you on the spot, but you have the privilege or the challenge, I guess, of meeting with the administration recently. I asked this question to your larger peer earlier today, and I'm just curious if you would care to share your thoughts on, some of the potential legislative risks that might face the industry. You know, I guess on a big picture level, I'm curious whether you feel that the kind of ESG pendulum from an investor standpoint is beginning to swing back in your favor. Just if any thoughts you would care to share on that.

[Mike Wirth, Chairman and CEO at Chevron]

Sure, Doug. Look, when we meet with policymakers, including those in the administration, what I talk about is the importance in energy of balancing economic prosperity, energy security, and environmental protection. All three of those things matter. Economic prosperity is affordable energy underpins the ability of economics or economies to you know to thrive. Reliable energy is tied to national security, and we're seeing that play out in different parts of the world today. There are the concerns about the environmental impacts of energy production and energy use, and we have to take those very seriously as well. My message to the policymakers is to be sure that we consider the appropriate balance of all three of those in policy.

[Mike Wirth, Chairman and CEO at Chevron]

Because if you over-index on just one, you can create unintended consequences and vulnerabilities that may not manifest themselves for a little while, but they're there, and eventually they do materialize. You know, I'm a believer that we share a lot of common ground with governments around the world as we talk about these issues. We share common ground, which, our investors who are concerned about these things as well. Look, we've been doing ESG for a long time. I keep a book on my desk called The Standard Oil Spirit. It was written in 1923, and it talks about our commitment to people. It talks about our commitment to protecting the environment.

[Mike Wirth, Chairman and CEO at Chevron]

This has been in the ethos of the company forever, and it's evolved as society has evolved. We're committed to being a responsible company and being a part of the solution here in the U.S. and around the world.

[Doug Leggate, Senior Managing Director and Equity Research Analyst at Bank of America]

Thanks for the answer, Mike.

[Mike Wirth, Chairman and CEO at Chevron]

You bet, Doug.

[Operator]

Our next question will come from Ryan Todd with Piper Sandler.

[Ryan Todd, Managing Director at Piper Sandler]

Ryan, thanks. Maybe one follow-up question on the liquid side of the biofuels market. Could you maybe just provide an update of how you're seeing the liquid biofuels market?

[Ryan Todd, Managing Director at Piper Sandler]

Maybe relative to your expectations, particularly with the little time with the REG acquisition under your belt. You're expanding pretreatment in Germany. Europe's pushing things towards, sustainable aviation fuel. How is the market playing out relative to your expectations? How do you see the SAF issue playing out between U.S. and Europe? Then maybe any update on the progress of the Geismar renewable diesel facility that you acquired from REG?

[Mike Wirth, Chairman and CEO at Chevron]

Sure. You know, I'll start with the REG acquisition. The assets are good, the people are even better. Any surprises so far have been to the upside. We've already identified quick wins, commercial opportunities. We've lowered insurance and financing costs. Integration efforts are all on track and delivering on our expectations. We're seeing placement of biodiesel into Chevron's West Coast refining and marketing network. That continues to ramp up. We're optimizing freight and feedstock across the system. All of that builds on, the strength that both companies had in the renewable fuels value chain. We just see it as a really nice combination here.

[Mike Wirth, Chairman and CEO at Chevron]

The Geismar expansion is underway, and we're halfway already to our renewable fuels target as that's completed. We indicated we're gonna grow to 100,000 barrels a day. We're well on our way to do that. Of course, we're investing in other relationships. We've got a joint venture with Bunge, where we're now participating in the soybean crush spread and bringing feedstocks into the system. We're working on converting hydro processing capacity at some of our refineries to be able to run bio feedstock. This is part of our business that will grow. The economics on it, like anything in the downstream, are a function of feedstock costs, supply, demand, and markets.

[Mike Wirth, Chairman and CEO at Chevron]

They've been good so far, and we expect, across the cycle and out into time that they're gonna continue to be an important part of our portfolio. We are seeing more people are going into renewable diesels, but it's a market that, like any other commodity market, at times may get long, and margins may reflect that. You know, we're familiar with those dynamics from our traditional business.

[Ryan Todd, Managing Director at Piper Sandler]

Thanks, Mike. Maybe one more. This may be a little speculative, but any thoughts on what you think the impact of a Russian product import ban to Europe on how that could play out in terms of product flows? Are those barrels likely to find a home in Latin America or Africa? Or do you think that we may actually see a decent amount of that Russian product disappear from the market?

[Mike Wirth, Chairman and CEO at Chevron]

Yeah. You know, any of these export bans have to be looked at within the context of the broader market. As you say, just as we've seen on crude, where the U.S. has banned the import of Russian crude, Europe hasn't yet, and that's coming. It's a global market, and you've got other buyers that, need the products, and they're not participating in the sanctions necessarily. You know, going to the earlier question from Neil about the products side of the business, markets are tight right now. Diesel in particular, as we've seen here recently and likely to stay that way, you know, through the winter, I think.

[Mike Wirth, Chairman and CEO at Chevron]

Further, we get into the Q1 when the products ban comes into effect in Europe, and I think that's gonna be set against a backdrop of pretty tight product markets, and you are going to find countries around the world need that fuel. You know, you get into logistics, then you've got longer shipping legs, which, do you have enough ships to move it? And how does the system reoptimize? It's a less efficient optimization for sure than moving it to the natural closer markets.

[Mike Wirth, Chairman and CEO at Chevron]

I do think that you'll see those products continue to flow, though just go to more distant markets with increased costs and logistics and continue to keep some of this pressure on the overall balances out there.

[Neil Mehta, Managing Director and Senior Equity Research Analyst at Goldman Sachs]

Thank you.

[Mike Wirth, Chairman and CEO at Chevron]

Thank you, Ryan.

[Operator]

Our next question will come from Lucas Herrmann with Exane.

[Lucas Herrmann, Senior Equity Research Analyst at Exane BNP Paribas]

Thanks, Mike. Also, thanks very much, Mike. It'd be nice to have a chance to chat with you. Two, if I might. The first for you, Pierre. Just remind me in terms of associate contributions towards the top end of the range. I think the indication was $3 billion at top end of the range, but perhaps you could give us an indication of, the level of dividend that's been paid out of associates to date. I guess I'm a little surprised that in the current environment, one might expect that the associate dividend would be, would be beyond the $3 billion. Then, Mike, just if you could just give us a whirlwind tour of.

[Lucas Herrmann, Senior Equity Research Analyst at Exane BNP Paribas]

Well, it's not whirlwind, but just talk around the Gulf and the developments that are, taking place there within your own portfolio and how those are proceeding and, your current thoughts on timing. That'd be great. Thank you.

[Mike Wirth, Chairman and CEO at Chevron]

Okay. I'll let Pierre start, and then I'll, and when I come back, I'll just ask you to clarify. Gulf of Mexico or-

[Lucas Herrmann, Senior Equity Research Analyst at Exane BNP Paribas]

Sorry, Gulf of Mexico.

[Mike Wirth, Chairman and CEO at Chevron]

Gulf of Mexico.

[Lucas Herrmann, Senior Equity Research Analyst at Exane BNP Paribas]

Yeah. No, Gulf of Mexico.

[Mike Wirth, Chairman and CEO at Chevron]

Okay. Very good.

[Lucas Herrmann, Senior Equity Research Analyst at Exane BNP Paribas]

You're welcome to talk about both, Mike. It's.

[Mike Wirth, Chairman and CEO at Chevron]

Go ahead.

[Pierre Breber, CFO at Chevron]

Lucas, you're right that affiliate dividends, in fact, last quarter, we guided to be above the top end of the range. Now we're guiding at the top end of the range, which we increased during the course of the year. That reflects really two items. Angola LNG has in the affiliate income line been generating earnings all year, but during the first half of the year, the cash return was a return of capital and a dividend. It's showing up in a different part of the cash flows statement. The second item is, given the uncertainty at CPC, TCO is holding more cash. We'll get more cash out of TCO, but I think TCO appropriately is just being cautious. Mike Wirth said all of our barrels are flowing in October.

[Pierre Breber, CFO at Chevron]

We expect them all to flow in November. We expect the repairs to be completed shortly. Now, that said, they're just being cautious and holding a little higher cash balances. We'll be at the top end of the range through 3Q22. I think we're at about $2 billion of affiliate dividends. You can confirm that with Roderick. The reason why you're seeing the cash flow line of affiliate income less dividends being a little bit larger than maybe you'd expect is primarily those two drivers in terms of the quirks of Angola LNG accounting and TCO holding cash balances, which will be a temporary thing, and we expect that we'll see higher cash in the future from them.

[Mike Wirth, Chairman and CEO at Chevron]

Gulf of Mexico, Lucas. As you know, we're one of the largest leaseholders in the Gulf. We've got over 270 leases out there and a strong base business. A lot of installed infrastructure that enables capital-efficient brownfield development. Importantly, it's one of the most carbon efficient assets in our portfolio with a carbon intensity of about 6 kilograms of CO2 per barrel of oil equivalent. Lease Sale 257 is the one that was in question here a few months ago. As a result of the Inflation Reduction Act, that's been clarified, and that lease sale is proceeding.

[Mike Wirth, Chairman and CEO at Chevron]

We picked up 34 leases in that sale, and we look forward to continued leasing by the federal government, as indicated and kind of encouraged by the Inflation Reduction Act, and we'll participate in those. In terms of production growth, we will advance a number of projects that are underway right now. Jack St. Malo has a multi-phase pumping project that starts up this year and some additional development drilling. Bigfoot has ongoing development drilling and water injection that will begin in the Q1 of next year. Mad Dog Two is operated by one of our partners, and I would refer you to them for an update on that project. We've got at St. Malo our water flood first injection planned for next year.

[Mike Wirth, Chairman and CEO at Chevron]

Anchor, a new greenfield project, we expect first oil on that in 2024. Whale, another greenfield project, operated by one of our partners, expect first oil on that towards the end of 2024. We recently took FID in the Q2 of this year on the Ballymore project and expect first oil on that one in 2025. I appreciate the question because oftentimes I hear people say, "Well, we can see the Kazakhstan growth. We can see the Permian. What else do you have?" We've got a string of projects there in the deepwater Gulf of Mexico that are kind of sequentially lined out that will steadily contribute to production growth here in the U.S. from the deepwater.

[Lucas Herrmann, Senior Equity Research Analyst at Exane BNP Paribas]

Mike, yeah, thanks very much. Appreciate it.

[Mike Wirth, Chairman and CEO at Chevron]

Thank you, Lucas.

[Operator]

Our next question will come from Biraj Borkhataria with RBC.

[Biraj Borkhataria, Global Head Energy Transition Research at RBC Capital Markets]

Hi there. Thanks for taking my questions. I've got two left, please. First one is just going back to Kazakhstan and CPC. My understanding is there's been sort of fortuitous timing for Tengiz because one of the other projects in Kazakhstan has been offline, which has allowed Tengiz to flow despite the capacity obviously being lower. I was just trying to understand, hypothetically, if Kazakh production comes back on up to full capacity, but the pipeline capacity is maintained to be reduced or is not at full capacity, then do all the projects get prorated down equally, or is there any other quirks that we need to be aware of there as it relates to Tengiz? The second question is on your LNG portfolio, performed extremely strong this quarter.

[Biraj Borkhataria, Global Head Energy Transition Research at RBC Capital Markets]

Can you say what proportion of your LNG portfolio is sold under long-term contracts and what proportion is sold on a spot basis either for the year or for over the medium term? Thank you.

[Mike Wirth, Chairman and CEO at Chevron]

Yeah. At CPC, I mentioned earlier that right now only one of the three single-point moorings is operational. The other two are down for some maintenance and repair work that's well underway. We would expect that work to be complete and to be able to handle full flows on CPC here before too long. If for some reason that didn't happen and we were constrained to the one SPM that has the capacity to load out about 70% of what a CPC can move when it's operating full. There would be some constraints on movements.

[Mike Wirth, Chairman and CEO at Chevron]

TCO has long been the largest. I don't want to get into the details, but we would still be able to flow barrels, maybe not all of our barrels, but I think TCO would be well-positioned to not be disadvantaged, let me say that, if there were some sort of proration underway.

[Pierre Breber, CFO at Chevron]

Hey, I'll just add that the nominations for CPC for November have already been put in place, and Tengiz's TCO essentially got a full nomination even for November. Again, that's even in the situation if the SPMs are not repaired. Of course, if they're repaired by then, no issue, but even if they stay down for November, TCO's already received a full nomination. On the LNG question, Biraj, it's notionally around 80% contracted, 20% spot. That's a combination of both of our Australia LNG operations and our West Africa operations. Our West Africa tends to be almost all spot, and Australia is closer to 90/10, so that averages out to about 80/20. We'll give guidance on our spot price sensitivity.

[Pierre Breber, CFO at Chevron]

We'll do that on the Q4 call at the end of January. You know, it depends on how many spot cargoes are produced, both out of, again, our West Africa and Australia operations.

[Biraj Borkhataria, Global Head Energy Transition Research at RBC Capital Markets]

Thank you. That's great color. Appreciate it.

[Operator]

Our next question will come from Irene Himona with Société Générale.

[Irene Himona, Managing Director, Sector Head-Oil and Gas at Societe Generale]

Thank you very much. Good afternoon, and congratulations on the very strong results. My first question, your financial framework is clearly to manage through the cycle, but at the same time, the current uncertainty on the commodity price outlook is rather extreme, and that is partly because of the risks or fears of a recession. My question is, as you look at your downstream businesses, whether in the U.S. or Asia, have you seen any signs of an economic slowdown which would cause you some concern as you look ahead to 2023 and which might perhaps drive a more conservative approach to CapEx growth? Thank you.

[Mike Wirth, Chairman and CEO at Chevron]

Yeah, Irene, thanks. Demand remains pretty strong globally, across the product barrel. Now there are some variations in that. Certainly, the U.S. West Coast, which had some refining issues and prices reflected that. We saw gasoline demand in the Q3, responsive to those higher prices and a little bit of softness there. Diesel demand's been pretty strong around the world, maybe a little less so in China, given some of the lockdowns that they're seeing. Aviation demand has been steadily coming back as people are flying again, not quite to pre-COVID levels yet, but steadily increasing. Overall, I wouldn't say that product demand that we've seen to date is sending a strong signal that a recession is underway or that the economy is significantly slowing.

[Mike Wirth, Chairman and CEO at Chevron]

As I said, there's always some kind of regional, or maybe sectoral, unique characteristics. No, we're not really seeing that yet, Irene.

[Irene Himona, Managing Director, Sector Head-Oil and Gas at Societe Generale]

Thank you. My supplementary question, if I can go back to renewable natural gas, please. LCFS prices have more or less halved over the last year. I wonder if you can help us understand the impact, if any, on your own RNG. Does it create some pressures to perhaps work more on the technology to try and reduce the costs, given that the value of the incentive is half of what it was last year? Thank you.

[Mike Wirth, Chairman and CEO at Chevron]

Sure. Let me set the incentive aside for a second. In every one of our downstream businesses, we're always working on reducing costs and improving technology and finding ways to become more efficient. That's inherent in our business. The dynamics around LCFS credits, RINs, AB 32, credits in California, the EU trading scheme, all of these things we have to manage through their own cycles. It's a part of our business that is related to but not necessarily correlated to the fundamental supply-demand dynamics that drive physical flows, because you have government allocations of credits and whether people are building inventories of credits or drawing down inventories of these credits. They don't necessarily correlate with the underlying commodity.

[Mike Wirth, Chairman and CEO at Chevron]

You know, we've got a fair amount of experience in managing that. Certainly, the economics on something like RNG rely on the credit structure and the regulatory framework that incentivize those businesses. If you see the credits, declining in value, that it starts to erode a little bit of the margin of that business. You know, we have to take a long-term view on these things, and I think the regulators do the same. As they see credit values reflect a lot of length in credits, that suggests that the technology is advancing, the supply is advancing, and they can set more ambitious targets.

[Mike Wirth, Chairman and CEO at Chevron]

These things evolve over time, and I think our people have a pretty good track record of managing in that environment. Thank you.

[Irene Himona, Managing Director, Sector Head-Oil and Gas at Societe Generale]

Thank you very much.

[Operator]

Our last question comes from Paul Cheng with Scotiabank.

[Paul Cheng, Managing Director and Senior Equity Analyst at Scotiabank]

Hi. Good morning. Thank you.

[Mike Wirth, Chairman and CEO at Chevron]

Good morning, Paul.

[Paul Cheng, Managing Director and Senior Equity Analyst at Scotiabank]

Mike Wirth and Pierre Breber, one question for each. First is a simple one. In the past, in your presentation, when you're talking about downstream, you would talk about what's the chemical earnings. Sequentially, whether they are up or down, you didn't mention it in your presentation this time. If that means that chemical earnings is actually relatively flat, which is surprising given how much of a margin drop we see in the industry. That's the first question. Second question, on my end for the LNG longer term strategy. Most of your peers that have been pretty aggressive in growing their LNG operation, you have very profitable or at least very cash flow rich LNG operation, but you don't really have much plan to grow, at least on the table.

[Paul Cheng, Managing Director and Senior Equity Analyst at Scotiabank]

Can you maybe elaborate that what is your medium- to longer-term strategy in LNG? Thank you.

[Mike Wirth, Chairman and CEO at Chevron]

Sure, Paul. Yeah, quickly on chemicals. Earnings were a little bit lower quarter-over-quarter. And that's really a function of margins. We had higher ethane prices and lower polyethylene prices, and so the olefins margin, which is the largest driver of our performance, were squeezed. It did go down sequentially. On LNG strategy, we've long favored the Pacific Basin given the best customers were in the Japan, Korea, Taiwan markets and our resource position in the Pacific. The Atlantic Basin, we've got exposure to it, but know, Europe traditionally has been a market where you were competing with Russian pipeline gas and just less attractive.

[Mike Wirth, Chairman and CEO at Chevron]

With the changes now that we see in markets, we're increasing exposure to Atlantic Basin LNG. We've done a couple of deals with Gulf Coast projects that are being developed that'll give us offtake that we can move into global markets. We're advancing projects in the Eastern Mediterranean in the assets that were acquired with the Noble acquisition that would potentially allow an expansion of the Leviathan field to provide LNG supply that can go into global markets. You know we've looked at other things; the big process has been underway in Qatar. We certainly deeply involved in evaluating that opportunity. Unlike everything that we look at, LNG has to compete against the other investment opportunities in our portfolio.

[Mike Wirth, Chairman and CEO at Chevron]

We're gonna stay very disciplined on capital, and we won't invest in everything that we could. We're going to invest in the best things that we can, and I expect that will include some LNG projects over time.

[Paul Cheng, Managing Director and Senior Equity Analyst at Scotiabank]

Thank you.

[Roderick Green, GM of Investor Relations at Chevron]

Thanks, Paul. I would like to thank everyone for your time today. We appreciate your interest in Chevron and everyone's participation on the call today. Please stay safe and healthy. Sarah, back to you.

[Operator]

This concludes Chevron's Q3 2022 earnings conference. You may now disconnect.

Participants

Executives

• Mike Wirth, Chairman and CEO
• Pierre Breber, CFO
• Roderick Green, GM of Investor Relations

Analysts

• Biraj Borkhataria, Global Head Energy Transition Research at RBC Capital Markets
• Devin McDermott, Executive Director at Morgan Stanley
• Doug Leggate, Senior Managing Director and Equity Research Analyst at Bank of America
• Irene Himona, Managing Director, Sector Head-Oil and Gas at Societe Generale
• Jason Gabelman, Energy Equity Research Analyst at TD Cowen
• Jean Ann Salisbury, Senior Research Analyst at Barclays
• Lucas Herrmann, Senior Equity Research Analyst at Exane BNP Paribas
• Neil Mehta, Managing Director and Senior Equity Research Analyst at Goldman Sachs
• Paul Cheng, Managing Director and Senior Equity Analyst at Scotiabank
• Roger Read, Managing Director and Senior Equity Research Analyst at Wells Fargo
• Ryan Todd, Managing Director at Piper Sandler