How Has Chevron’s Story Changed For Shareholders?
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Chevron (CVX) stock trades at 15.7 times earnings, against 21.9 for the S&P 500. Shareholders paying that price need to know what they are buying. Chevron’s priorities have changed. Management talked up the merger with Hess as recently as its fiscal Q2 2026 call, and emphasized other things on the fiscal Q3 2026 call. So what has taken the place of the Hess deal?
Chevron Now Talks Up Venezuela And Exploration
Management made the case for two growth plans on the October 30, 2026 call. Chevron plans to double production at its three joint ventures in Venezuela to roughly 600,000 barrels a day by 2031, and it is increasing exploration spending by 50% relative to 2025.
Across its fiscal 2025 calls, management emphasized Hess instead. Management said on the fiscal Q2 2025 call that it had closed the merger, and on the fiscal Q3 2025 call that the Hess integration was on track and synergies were being realized. The deal mattered because, in management’s words on the fiscal Q4 2025 call, it created a premier upstream portfolio with the highest cash margins in the industry.
Management’s last word on Hess was good news. Chevron was capturing 50% more synergies, the savings from combining the two companies, than it first targeted, management said on the fiscal Q2 2026 call. With the deal ahead of plan, management may simply have less left to say about Hess. That reads as a reason for the quieter airtime rather than a warning.
How Big Is Venezuela Next To Chevron’s Upstream?
Venezuela is still small next to the upstream business Hess joined. Management expects the three ventures to reach around 300,000 barrels a day of gross production by year-end, while Chevron as a whole produced nearly 4 million barrels a day in fiscal Q3 2026. That total already includes one month of production from the Venezuelan ventures. Venezuelan output is growing quickly, up 20% over the last 12 months.
The upstream side of Chevron is a big business on its own. Its Upstream segment brought in $88.4 billion of revenue in fiscal 2025. That equaled 47.9% of company revenue that year, and that revenue grew 0.7% from fiscal 2024.
On management’s figures, Venezuela’s growth comes cheap. Management puts total cost in Venezuela, capital and operating spending together, at less than $20 a barrel, and it expects no major additional infrastructure spending as production doubles. Management also says the program will pay for itself. The doubling, though, is a plan that runs to 2031, not a result.
Is Chevron’s New Focus Reassuring For Holders?
So far, yes, but Chevron’s low P/E comes from profit that has swung widely. Chevron earned $27.0 billion over the last twelve months, up from $12.8 billion in the twelve months before. Quarterly profit moved from $2.21 billion in fiscal Q1 2026 to $12.1 billion in fiscal Q2. Management said oil prices moved across a $64 range within the third quarter alone.
That is why the Hess fields still matter to what you own. The Hess assets generate free cash flow roughly double the extra dividends the deal added, management said on the fiscal Q2 2026 call. If those fields slip, part of the cash behind Chevron’s 3.3% dividend yield goes with them. If Venezuela costs more than management expects, the main source of the production growth it now talks up would weaken.
Management has reported Hess synergies ahead of target, while the Venezuela growth it now emphasizes is still a plan. When Chevron reports in January 2027, production from the Venezuelan ventures against management’s year-end goal is the number to watch.
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