Thank you very much. We're very excited about our keynote conversation for the conference between Mike Wirth, Chairman and CEO of Chevron, and David Solomon, the Chairman and CEO of Goldman Sachs. These are two executives that really require no introduction, but I'll just say thank you both for making the time for being here. It means the world. While the franchises of Chevron and Goldman Sachs may have very different business models, there's a lot in common. Culturally, both trace their history back to the 19th century. Both Dow 30 components. Both very global, geopolitically connected. For Chevron, this is a really important time for the organization.
Mike and I were talking about that last night with the in-service of the large project in Kazakhstan, Tengiz, the potential for closing of the Hess transaction, as we heard from John Hess yesterday, and the inflection in free cash flow in the Permian, Tengiz, Gulf of Mexico, and those cost reductions ahead of us as we move towards 2026. Not to mention the fascinating backdrop for oil, power, and the election, so looking forward to the conversation. Thank you both again for sharing your insights with leading investors, CEOs, and executives, and with that, let's welcome David Solomon and Mike Wirth.
Thank you very much, Neil.
Good morning, everybody. Welcome. The only thing I can tell you is that it's warmer in Florida than it is in New York. When I left last night, it was 24 degrees Fahrenheit, and so it's delightful to be here in the high 50s degrees Fahrenheit in Florida. Mike, it's great to have you here. You know, I want to jump right in. First of all, I appreciate your being here. I appreciate the opportunity to chat with you. It was an eventful year. I had a busy year. You had a much, much busier year. You had a very, very eventful year. And, you know, I think about you spoke here a year ago. I kind of want you to kind of walk us through at a high level, kind of where the company is, Kazakhstan, the acquisition of Hess, the inflection of free cash flow by 2026.
Kind of walk us through at a high level, kind of a strategic update. Where is the company kind of as you look forward in 2025? How are you feeling about things?
Yeah, I'd be happy to do that. First of all, Neil, thanks for the kind introduction, and David, thanks for coming down here. Our relationship with Goldman goes back many decades, and it covers all aspects of our business and is one of the really, really important business relationships we have. So it's a pleasure to be here. Last year was a big year for us. We achieved a number of really important project milestones on our way towards delivering some very strong free cash flow growth over the next few years. The projects in the deep water Gulf of Mexico, in Kazakhstan, some things in our new energy space with green hydrogen, renewable diesel. In the third quarter, we delivered the highest production in the history of our company for the third quarter.
And so we've got a lot of strong momentum coming into 2025, where we will see further significant project startups in Central Asia, in the deepwater Gulf of Mexico, or Gulf of America. In some other aspects of our business, we announced some further reductions in operating costs and capital expenditures. Capital discipline and cost discipline always matter in a capital-intensive industry like this one. We're well positioned to deliver, you know, by next year, $6-$8 billion in additional free cash flow growth, and then $2 billion of cost reductions on top of that. We've got a very strong balance sheet and a really consistent record of returning cash to shareholders through the cycle, both when times are good in our industry and also when times are difficult.
It positions us, I think, to continue to compete through the cycles and be a strong investment component in people's portfolios.
Sure. Let's talk a little bit about the macro environment and the macro setup. You and I were just talking. You know, certainly when you step back and you look at the change in the business environment, it's got to be more constructive. You know, every CEO you know I've spoken to over the last 12-24 months, you know, felt we were in a very, very complex over the last 12-24 months business environment from a regulatory perspective, from kind of a growth agenda perspective. We obviously have a shift with the new administration, but the macro environment, when you look at geopolitics and you look around the world, is pretty complicated. We certainly have had volatility in commodity prices.
Give us kind of your top-down macro view, both, you know, locally, but also globally, as to how you see things setting up in 2025 and into 2026?
Yeah, so certainly the U.S. economy continues to power along pretty well. And, you know, we've avoided a hard landing. The Fed has navigated things, I think, pretty effectively. Globally, you know, Europe hasn't been great, but it's managed its way through the risks associated with the conflict in Ukraine, and particularly the energy risks, better than it looked like they might a couple of years ago. China has been the big concern from a global point of view, and I think it remains that way as we head into 2025. It's been certainly such a strong engine of global growth over the last decade or two that, you know, we'd like to see China sort itself out and have a more solid and secure outlook going forward.
But I think, you know, when you step back from it all, we're seeing decent growth globally still, and that, you know, is against the backdrop of a lot of risks that the world has encountered over the last couple of years, for sure. So we've got a reset politically in the U.S., in a number of other countries around the world as well. We're seeing the political winds shift. And generally speaking, I think in a direction that should be good for economies and good for business. As you say, you know, a commitment to less regulation, I think a commitment to investment and growth that, you know, that'll be good for economies around the world. So we're relatively constructive. We're mindful of the risks, and there are certainly many, many risks that you can identify out there.
Yeah. Talk a little bit about commodity prices. You know, what's created movement and volatility? And as you kind of think about, you know, energy supply and demand, you know, how do you see this playing out, you know, from a commodity price perspective over the course of the next 12-24 months?
Yeah, we've been pretty range-bound on crude oil in particular, and in large part because OPEC and OPEC+ have, you know, continued to try to manage supply to keep supply and demand relatively balanced. Not an easy thing to do. We've seen pretty strong supply growth in oil, particularly in this hemisphere, whether it's North America or South America. And against a backdrop of decent demand growth, I mean, oil demand last year was at an all-time record, and it'll go up again this year. It'll be an all-time record again. Gas, you know, we've seen some firmness here recently as the weather has gotten colder. That's been true in Europe as well as here in North America.
I think in the medium to longer term, you certainly see some things that for North American gas would suggest we're going to see demand growth, whether it's for LNG exports or to support increased power demand here in the U.S. We see a pretty constructive future for gas. So commodity prices in our industry are a function of supply and demand. I think supply looks pretty adequate out there. Demand, as I said, is continuing to grow. So we don't have a particularly bullish or bearish outlook on prices for this year. There's certainly some downside risks if OPEC+ were to bring supply back in excess of what the market needs. And so that's, you know, an issue they're going to have to consider and navigate.
As I said, they've done a pretty reasonable job, I think, of matching those two over the years since COVID. And so we'll have to see how that plays out. But I don't think there's a lot of upside or downside risk that we're very concerned about. You have to be prepared for both, which is why we keep a strong balance sheet. The growth and free cash flow positions us well. And you have to be prepared for any environment in our business.
Let's touch on LNG for a minute again. Some chatter about potential medium-term oversupply of LNG. Chevron's view?
Yeah, you know, LNG is a commodity that, you know, demand for it grows in kind of a gradual fashion, and supply tends to come on in big tranches as you get projects that bring multiple trains of LNG into the market. And so you can go from a relatively tight market to one that's oversupplied pretty quickly as you see a few projects come online. We've seen some delays in things due to some of the issues here in the U.S. Big projects underway in Qatar right now that'll come online over just the next few years. Some of the U.S. projects will come online. So I think it's fair to say that over the back half of this decade, we probably head into a slightly oversupplied position at some point as a lot of that supply comes on. But that's not really new for LNG.
That's kind of the way the LNG markets have always worked.
Yeah. You know, one of the things as I, you know, travel around and talk to people, the theme of growing power demand, particularly here in the U.S., you know, is a big, big macro theme. Talk a little bit about how Chevron is positioned to help meet changes in power structure and demand, you know, over the course of the next decade.
Yeah, it certainly is a topic I know there's been a lot of discussion about here. We've been deeply engaged in conversations with, you know, the different hyperscalers that are involved in the data center buildout and developing these new AI tools, and there are a few things that I take away from those conversations, number one, you know, there's a kind of an arms race underway, I mean, everybody wants to move fast. These models are powerful, and you need the compute to train them and to build them out, and as the functionality and the range of application continues to widen, the need for that compute only goes up, and we're certainly seeing that in stocks like Nvidia and others. The second thing that's also pretty clear is that the national security implications of these models are real.
The potential uses in sensitive applications lead to some issues that governments care a lot about. Keeping the models and the data centers secure is very important. I think what that suggests is you're going to see this done for a large part here in the U.S. for models being built by U.S. companies. That leads to the question about power in the U.S. We've got a grid that is straining right now to deal with the introduction of a lot of intermittent generation capacity, the normal variations in load, and the fact that our grid was built decades ago to serve a market that's very different than the market we have today. Adding a lot of new generation that comes in through the grid is slow. The backlog on interconnects is lengthy.
Frankly, a lot of the generators are struggling to see how they can build out the capacity for a unique and small set of customers when things have to go in their rate base for a large set of their customers. So it leads you to discussions about behind-the-meter power that doesn't come through the grid, but is really built to serve data centers. As you start to look at the reliability needs of those data centers, you come back to things like natural gas and say, you know, nuclear would be great. You're seeing a lot of talk about nuclear, but small modular nuclear is probably a decade away from most of the people I talk to that are working on those technologies, and the hyperscalers really can't wait that long.
And so the good news is America is blessed with an abundance of natural gas. And I think you're going to see a buildout of natural gas-fired power generation that will support these data centers. We're certainly working on ideas like that. The other constraint that exists is just access to the big turbines.
Yeah.
And so, you know, there are only a few manufacturers of these, the largest gas-fired turbines in the world, and their order books are pretty full for years and years out into the future. And so people that are in the queue with slots for delivery in the next few years, I think are going to be well positioned to help meet this need.
Yeah. Let's talk a little bit about the incoming administration. You and I chatted, you know, for a few minutes. High level, you know, impacts broadly of the policy initiatives on the company and also the energy sector as a whole.
Well, we certainly have seen President Trump make energy a key component of his platform. And, you know, his team that he's putting in place is a very qualified team. People in this room, I'm sure, know Chris Wright. Some of you may know Governor Burgum as well. But at Interior and DOE, we have two of the most qualified nominees I've seen in my entire career. These are people that have, you know, Chris Wright has worked in this industry. He understands the industry very well. Governor Burgum understands how both private and public lands can be stewarded for energy development and done in a very responsible manner. And that stands in contrast to some of the other nominees we've seen in other administrations.
So I'm very optimistic that we will see a team that understands this industry, that understands the importance of affordable energy to our economy, that understands the importance of reliable energy to national security and to our allies, and also understands the importance of protecting the environment. In fact, I've spent time with both Chris and Doug in the Western U.S., where they spend a lot of their time outdoors. And there's nobody that cares more about preserving our environment than people like that. And so I'm very pleased with the team that has been nominated and I'm sure will be confirmed. And I think President Trump clearly sees that some of the policies of the current administration have been mixed at best in terms of the signals they send for investment and have not necessarily, I think, served the economy as well as they could.
And so I'm optimistic coming in. I think, you know, President Trump's got a broad set of priorities and an ambitious agenda that he intends to pursue. But I think energy is right there among the top priorities, and we look forward to working with his administration to encourage sound policy that's good for our economy, good for our security, good for our competitiveness.
Yeah. You think about the energy sector broadly. I mean, this is something, you know, I've watched as somebody who's watched markets for over 40 years. The growth in technology has obviously rebalanced the role that the energy sector has played in the overall market cap weighting of markets. How does that evolve and shift over time? I mean, energy is still so important to the overall ecosystem, the economy. Technology is driven by power and energy. But the attention that the energy sector gets from investors at the moment is different than what it's been. Now there are pendulums. The pendulum swings back and forth, and it's certainly swinging back. But talk a little bit about how you think about, you know, that balance and the attention that the energy sector gets from investors right now.
Yeah, it's a point of frustration. I think we are underappreciated in the investment community. Now, look, if you go back to the 2010s, some of this was self-inflicted. The industry over-invested in growth. It didn't return cash to shareholders the way that it should, and shareholders became frustrated. And I heard about this from a lot of shareholders, some of whom are in this room. So I think companies have learned from that. Virtually all companies in the sector now are returning cash to shareholders through both dividends and share repurchases. Our company has done this for a very long time. But performance matters. And I think, you know, companies in our sector need to perform for investors. We need to deliver value for investors. We need to generate strong returns.
Certainly, you know, when I talk about Chevron, we long have had a very consistent set of financial priorities. The first is to sustain and grow the dividend. We've increased our dividend payout for 37 consecutive years through wars, terrorist events, market downturns, pandemics, et cetera. We've got to invest to generate cash flows for the future. And we've been very consistent, but disciplined in investing to grow future cash flows. The third, in our industry, you have to keep a very strong balance sheet. We've got a double-A credit rating. Right now, we're under-levered. We're probably around 10% net debt, which is well below our history or where we need to be given our capital needs. But you have to be prepared for a downturn in markets, and you have to be prepared to lean on your balance sheet.
Companies that forget that have found themselves out of position at times when unexpected market events develop, and then excess cash ought to be returned to our shareholders. We've repurchased shares, 17 of the last 21 years. Over the last two years, we've returned $50 billion to our shareholders through our dividend and our repurchase. Our market cap's a little over $250 billion. So it's a pretty significant return of capital to shareholders. I think over time, shareholders are going to see the value in that. The duration of these cash flows is much longer than I think many people perceive. I talk to young portfolio managers that have grown up kind of in the era my kids have, and they think that, you know, demand for oil and gas is going away tomorrow, and of course, it's not.
As President Biden said in his State of the Union address, at least 10 more years. And I'm pretty sure that we're going to see a lot more than that going forward. And so I think the duration of the cash flows is underappreciated. I think the discipline in the industry is very real. And I think the returns to shareholders, I mean, our dividend yield right now is very competitive with a 10-year Treasury. And you've got the upside of equity exposure to, you know, an industry that generates 8% or 10% of the earnings in the S&P, and yet is market-weighted at less than half of that.
Yeah. Yeah. Let's shift a little bit to operations, if that's okay. I want to talk about the portfolio, talk about the asset base a little bit. We'll start with Kazakhstan. Talk about kind of the accomplishments around that project in 2024, key milestones, and, you know, kind of what's ahead of the first oil expected later this year.
Yeah. For people that might not be familiar with our position in Kazakhstan, it is one of the super giant fields in the world. This is a field that was originally developed under the Soviet Union. When the Soviet Union collapsed, Kazakhstan became an independent state. In 1993, our company entered into this project at a time when it was producing a few tens of thousands of barrels a day. Today, it produces roughly 700,000 barrels a day. We have a project underway that will take production at this field up to a million barrels a day at a single field. It's a project that's been underway for quite some time through COVID and has had challenges through that period of time.
Over the last 12 months, we have steadily moved towards startup commissioning of a large project to take this field, which is larger than the island of Manhattan, and reduce the back pressure so that the oil and gas can flow more readily into the plants. Large compression and pumping to move the fluids and the gases into the process facilities. Large process facilities to bring 260,000 barrels of oil to market and reinject all of the sour gas into the field for pressure maintenance. We are moving into our initial startup procedures here in the first quarter on this project. We've got, you know, hydrocarbons circulating through a significant portion of the plant right now, and construction is complete. We look forward to starting up in the first half of this year, ramping to, as I said, 1 million barrels a day.
That will turn this from a consumer of cash over the last decade to a strong generator of free cash for our shareholders.
So if you zoom out, this was a huge project, huge undertaking. Learnings that will impact how you think about other big long-term investment projects in the future?
Yeah. This is one of the largest projects we've undertaken in our history. And there's a couple of learnings. Number one, I described the project to manage the field pressure and then also a project to add incremental capacity. The decision was taken a decade ago to do both of these projects simultaneously on the belief there were economies of scale. There were also challenges of complexity in trying to execute two projects of such a magnitude simultaneously. We've had nearly 100,000 workers on site at times. The supply chains stretch across dozens of countries. And I think there's a complexity management lesson that we will take away from this, that when we can break things into discrete pieces, that risks can be managed better than aggregating things.
I think we falsely convinced ourselves that we might have more economies of scale, and we under-recognize some of the challenges of complexity on this. Second lesson, I would say on this one is we need to have sufficient engineering done when we take a final investment decision. We've done a lot of engineering when we made the final investment decision here, but I think we would have been better served to have advanced our engineering even further, to have scope more clearly defined and detailed engineering more fully completed.
And then probably the third lesson is simply in execution, having an even more thorough plan for the right resources on the ground during each and every stage of construction, commissioning, and startup, and a dynamic system to manage those across a project this complex so that we can stay on top of things as the state of the work evolves. We certainly plan for that, but I think there's going to be some lessons for us on better planning in the execution phase.
Good takeaways. Good takeaways. You're also making a big push to grow production in the Gulf of, I don't know, Mexico or America.
Let's call it the Gulf.
The Gulf. Talk a little bit about the ramp profile of those investments and kind of what you see, you know, coming out of that and some of the milestones, you know, you've kind of laid out around increased production there.
Yeah. So we, you know, in 2024, we produced about 200,000 barrels a day in the Gulf. In 2026, we'll be up to about 300,000 barrels a day. So 50% increase in a relatively short period of time, driven primarily by three projects. We started up a project in 2024 called the Anchor. It is a project in a geologic strata called the Paleogene. It's higher pressure and temperature than we've ever produced from in the deep water. And so it's 20,000 pounds of pressure per square inch. Last year, I was talking to some people, and it's hard to kind of fathom some of these things, but it's the equivalent of a full-grown African elephant standing on a quarter is the pressure we see at the, you know, down at the well bore. Very high temperatures as well.
And so we had to design drilling equipment, completions equipment, rigs that have the capacity to lift three million pounds with a hook on an offshore vessel. So that's the equivalent of three fully loaded 747s to pull pipe in and out of the hole. So a lot of new technology development to open up a region that offers a lot of prospectivity. So we're very excited about that because this is the first, but certainly not the last that'll produce from that formation. We've got another project starting up early this year called Whale. Third one in the middle of the year, Ballymore, which will tie back to existing infrastructure. So the deep water has a large resource bounty that has been explored, but not fully explored. And we're the second largest leaseholder out there and believe there's a lot more still to be done.
And as we advance technologies like the ones I described or others like subsea pumping and compression, which allows us to use an existing host facility on the surface. And rather than bringing in production from a few miles away, to actually bring in production from tens of miles away, 20, 30, 40 miles. And so you have to build less surface infrastructure. You can develop new finds more quickly. You can develop more smaller fields because you don't have the full load of surface investments to carry with your economics. And so we think there is still a lot of running room in the deep water for us. And it's important over the next couple of years, but I think it's going to be important for much longer than that.
So, staying on the topic of offshore, you've acquired some positions offshore in Africa. Talk a little bit about the opportunities there, some of the key considerations, how you think about that, different part of the world, different place to operate.
Yeah. So we've been in West Africa for decades, Nigeria, Angola, more recently Equatorial Guinea, a very rich hydrocarbon province in West Africa with some of the large rivers that have drained organic material and sediment out into the offshore region. And we've recently acquired additional leases in a number of those countries. Just took our board of directors to Angola last year, where we picked up three new leases in areas that are underexplored or unexplored that we're very, very optimistic about. We're also in Namibia, offshore, a country where we made a large gas find a number of decades ago. And recently, companies in our industry have had finds offshore in Namibia. We've got a well drilling there right now, which is one that we're keenly interested in and have had discussions with some of the people in the room about.
So an area that is highly prospective, clearly a working petroleum system out there. The faulting, fracturing, permeability, porosity, hydrocarbon mix all need to be better understood so we can understand the economics of, you know, developing that region. But West Africa is an important part of the world's oil and gas supply system. It's one we're very experienced in, and it will be an important part of our portfolio, I think, well into the future as well.
The last thing I just wanted to touch on going through the portfolio is the Permian. You put out CapEx guidance that kind of shows some capital efficiency in the context of investment and production there. Talk a little bit about what's driving the capital efficiency and how the production, you know, kind of scale looks for the Permian as you go forward.
Yeah. The Permian clearly, you know, a huge story for the United States and for our industry over the last decade plus. We're blessed with a large position there that is a function of some of our legacy companies, Texaco in particular, where we have a lot of acreage that we've owned for many, many decades, over two million acres out in the Permian. Our ownership means we don't have royalties due to somebody else. And much of the rest of the basin is leased and there are royalties due to the landowners. So we've got an inherent advantage in our land position. We're well positioned in the Delaware Basin in particular, also have a good position in the Midland.
And like others in the industry, as we have ramped up activity, we've found efficiencies in every aspect of development, from drilling wells to completing wells to the cycle time to put wells on production. We're finding better ways to place the wells in each formation. And some of the tools that are available now, the data tools, are helping us learn even more about this. So we're using AI to understand the variations across subbasins within the region to predict the productivity of different benches within the Permian and to improve the efficiency of all of our operations. And so just when you think you've kind of reached a knee in the curve and productivity and efficiency is going to flatten out, smart people, good engineers, the integration of technologies continue to provide efficiencies.
We're doing the work today with, you know, a dozen or so rigs that would have taken two to three times that many rigs not too many years ago, and so it allows us to harvest capital efficiencies. As we reach a million barrels a day of production in 2025, we're likely to slow the rate of growth a little bit in the Permian. We've been growing at a 15% annual growth rate over the last five years. We'll see that attenuate a little bit. We'll still grow, but at a slower rate, and that allows us to harvest the capital efficiencies, work on operating efficiencies, and really open up the free cash flow that that asset generates.
It's got years and years of, you know, plateau-like production ahead of us through the rest of this decade, through all of the next decade, and should become a big generator of free cash flow to support shareholder distributions and capital investment, you know, for a long time to come.
Let's pivot and talk about Hess. Why don't you give us an update on Hess, where you are, and how that's all progressing?
So I know John was on stage yesterday. I will try to be efficient because you've probably heard from him what I'm going to say. Really pleased last year with progress on two important milestones, shareholder vote and FTC approval. The remaining issue is the resolution of this arbitration matter with the two other partners on the Stabroek Block in Guyana. That is scheduled for an arbitration hearing in May of this year. The arbitration panel of three arbitrators has indicated 90 days following that hearing. They would expect to be able to render a decision. So we look forward to having that issue resolved here in 2025. You know, we continue to be very confident in Hess's position in the arbitration. This has been studied extensively, and we feel like they clearly have the right side of this argument, and we look forward to closing the deal.
The integration planning, we've had the time to do a lot of integration planning, and so we're well prepared for that and for, you know, a prompt close and look forward to doing that this year.
As you've learned more about Guyana since the deal announcement, how do you feel about that asset base?
Yeah. It's, you know, it's an example of, there's an old adage in our industry that big fields get bigger over time. And this is a really big oil field, and certainly its history to date has been one of additional exploration success in the regions that have been explored. There are other regions within the block that are slated for further exploration. And the story has gotten better and better over time. Right now, the production is oil, and the gas is being reinjected. There's a fair amount of gas in these fields as well. And over time, I think you'll see this gas produced as well. The partners are developing plans to bring that into Guyana to support their economy. And so everything continues to trend in a very positive direction, and we're very excited to join this project.
You know, you've said that it would be very unlikely for you to pursue something else, you know, significant as you're going through this Hess process, but how should people think about your medium and longer-term M&A strategy?
Yeah. You know, I think over the last number of years, you know, you could see that we've been able to acquire some pretty good companies at, you know, times when the economics worked well for our shareholders. We walked away from a deal when it got pricier than we thought that it, you know, it merited. And so I talked about capital discipline earlier. That applies not only in your organic activities, but also in your inorganic activities. And I think our track record is one of adding quality assets at prices that are creative for our shareholders. In our industry, you know, we deplete our resource every day. We produce resource that gets consumed by our customers. And so you always have to be acquiring resource. And there's really three ways we bring new resource into our company. One is we explore for it and we find it.
The second is we use technology to unlock resource that we currently have access to, but it's not economic. And the new technologies allow us to do that. The Permian and unconventional production is a prime example of that. And then the third one is you acquire existing projects and/or companies that add to your resource base. We've been effective over our history at all three of those. You have to be good at all three in our industry, but you also have to be patient, particularly in M&A. You know, poorly timed M&A can destroy a lot of value. Well-timed M&A can create a lot of value. And so, you know, we need to be patient and do the right deals at the right time. And I think our track record there speaks for itself.
Yeah. Very, very well. You touched on the dividend. You touched on capital returns, your ability to grow the dividend consistently and buybacks. How should people think about the cadence and the magnitude of capital returns while also, and this is something you've done very well, you know, balance sheet strength, security, what's a volatile world and a volatile industry? Talk a little bit about how you think about that balance.
Yeah. We spent a lot of time on the priorities I talked about earlier. And our shareholders really value the dividend. And as I said, 37 consecutive years of dividend increases, a 6% compound annual growth rate in our dividend over the last five years, a payout that is, I think, roughly three times the dividend payout of the S&P 500. It's a strong, secure dividend. And shareholders, including some of our largest shareholders like, you know, Berkshire Hathaway, put a lot of value on that. In order to do that, you've got to invest well to generate the future cash flows. And you've got to survive the cycles, which is where the balance sheet strength comes in. You know, through the cycles, we're very comfortable with 20%-25% net debt, given our annual capital needs and the flexibility we have in our capital program.
As I think I mentioned earlier, we're probably going to end this year around 10% net debt. So we've got a lot of balance sheet capacity. We're probably underleveraged even, you know, through the cycle. So we've got the ability to sustain share repurchases even through a low point, and you know, one of the criticisms that I hear from, you know, some of our investors is that companies in our industry buy back shares when oil prices are high and times are good, and therefore they're buying back their stock when their stock price is high. And they halt the buybacks during the down cycles. We've tried to buy through the cycle and not time it. We're not smart enough to really time these things, and so, as I mentioned, 17 of the last 21 years, we've repurchased shares.
We repurchased shares in 2020 during COVID when others did not. And our real objective is to be steady through the cycle, not try to be countercyclical, certainly not be procyclical, but steady through the cycle and manage our company with the discipline and a conservative approach to how we expose the company's balance sheet so that investors don't have to worry about the security of their investment, the security of their dividend, or our ability to continue to steadily repurchase shares.
So just the last thing, you know, I touched on the capital management. You've said, you know, always all the assets in the portfolio have to constantly compete for capital. How do you think about the scope and the magnitude of recycling or divesting, you know, assets in the portfolio versus new growth opportunities?
Yeah. You know, it's easy in our industry to love all your, you know, love your assets. We've got a lot of.
Love your children.
Love all your children. And what you need to do is you need to constantly be looking to add things into your portfolio that are better than what you've got today or are highly competitive, and then be, you know, objective about what that means for the assets that are less competitive in your own business. And we've got a track record of moving things out of our portfolio that are not necessarily bad assets, but where we've got better assets to invest in, and they may fit for another company and work in their portfolio differently than they work in ours. And so we should always be high-grading what we've got.
We should always be disciplined in how much capital we'll spend and not just increase the budget because we've got a larger set of assets that we can invest in, but be disciplined about investing in the very best ones that are going to generate the strongest returns over time for our shareholders. And so it's not always easy because you move some things out of your portfolio that people are attached to. But I think in the long run, those assets go to an owner that values them and is prepared to invest in them and allows us to stay disciplined and tight and continually improve the competitiveness of our portfolio.
Yeah. So we've covered a lot of landscape across the macro, the portfolio, your strategy. Is there anything we've missed or anything you want to add for the group this morning?
I've had great meetings with a number of people in the room here today. I just thank those of you that are invested in our company and in our industry. I do believe to your question earlier, David, I think this is a sector that is underweighted right now given the.
Energy and financials.
Energy and financials. Let's have a good year in 2025. It's a sector that I think is maybe, you know, and I mentioned earlier, younger portfolio managers that I meet, you kind of haven't been able to go wrong by riding the technology wave over the recent years. And I think that's probably led some people to not fully understand or examine some of the other sectors that they could be exposed to and that they could invest in. And I think, you know, these things turn. In fact, I was reading an interesting piece that Howard Marks just put out the other day, talking about some of the past cycles. And I think long-term smart, patient money is going to find value out there in markets. I think the energy sector is certainly a destination for some of that. We have to continue to perform.
We have to deliver value. We have to maintain the discipline that I think we've seen in this sector and certainly that I've tried to bring to our company over recent years. But I think there's a lot of upside in it for investors, and we intend to deliver value through disciplined management of our company and stewardship of our assets and responsible long-term, you know, management of our company, so it's really a pleasure, and I'm not just saying this because I'm up here on the stage with you, but to be with another company that has as long a history as ours that has gone through the cycles, that's seen the evolution in the economy, the technology environment, the geopolitical dynamics over not just years, but decades and in fact centuries, and has stood tall through all of that.
We've been around for 145 years and intend to be around for at least that many years into the future in whatever kinds of energy technologies the world needs. We intend to be involved in developing those, commercializing those, and scaling those up, and the entire time creating value for our shareholders as we do.
Well said. Mike, we appreciate you being here. We appreciate the partnership with the firm, and thank you for taking the time this morning.
It's a pleasure.
Appreciate it. Thank you.