Chevron Lines Up $500 Million Exploration Capex Hike for 2027

Chevron Corp. could add more than $500 million to its exploration capital budget in 2027, a roughly 50% increase from the company's previous baseline, as it converts a two-year acquisition spree into a stepped-up drilling program.

Vice-chairman Mark Nelson laid out the plan on the third-quarter earnings call. He told analysts Chevron's global opportunity set is now "the largest and highest-quality I have seen in years," built on more than 20 million acres added to the portfolio since mid-2024 and artificial-intelligence tools that screen development candidates faster.

What did the quarter actually deliver?

Chevron booked third-quarter net profits of $10.0 billion on revenues of $67.8 billion. A year earlier, the figures were $3.5 billion and $49.7 billion. Upstream earnings climbed 73% year over year to $5.7 billion, while downstream profit more than quadrupled to $4.9 billion.

Worldwide production averaged 3.98 million boe/d (barrels of oil equivalent per day), down slightly from both the second quarter and the year-ago period, in part because of the Iran war. Record output from operated assets in Australia and the US Gulf of Mexico offset part of that decline. Refineries ran at 98% of capacity and set a throughput record of 1.09 million b/d.

The downstream number is the standout. Quadrupled refining profit on record throughput tells you where the quarter's earnings surprise actually came from, not the exploration story executives preferred to talk about.

Where is the exploration money going?

In the third quarter, Chevron added six blocks in the Gulf of Mexico plus acreage in Angola, Nigeria, Guinea-Bissau, and Egypt. Nelson expects Namibia, Equatorial Guinea, and Suriname to join the exploration list next. Note the distinction: those three are named as likely additions, not signed entries, and no well commitments were disclosed for them.

At end-2025, the company was drilling four exploration wells — two in the United States, two in Asia. Exploration capex totaled a little over $1.2 billion last year, up from $1.0 billion in both 2024 and 2023.

"Given the growth in the opportunity set and the new team and new approach we've brought forward and given from where we come, I would expect us to increase our capital spend next year 50% from our previous baseline," Nelson said. "Over time, you would expect to see us maybe drilling around 20 wells a year."

That is a fivefold jump from four wells to 20, promised on acreage whose prospectivity (the geological likelihood of finding recoverable hydrocarbons) remains largely untested by the drill bit. The word "maybe" is doing heavy lifting in that sentence.

The spending hike follows an internal reorganization that centralized and accelerated exploration decision-making. Nelson credits the new structure. Results, in the form of discovery rates, will take years to verify.

What about Venezuela and the Permian?

Chairman and CEO Mike Wirth addressed two other fronts on the call:

• Venezuela. Two months ago Chevron was assigned rights to develop two areas in the Orinoco Belt. Wirth described "very different" dynamics now: "we are lifting all the oil," rather than PDVSA, and Chevron is marketing it, meaning the company controls revenue covering costs and taxes. Chevron is also repaying old debt issued in Venezuela and funding planned capex there from local revenues.
• Permian. The basin produces about 1 million b/d for Chevron, and Wirth has said that level holds for now. Asked about pushing higher, including via acquisition, he declined to speculate. His stated priority is "sweating the assets" — extending productive lives through drilling technology, new chemicals, and more efficient spending.

Shares rose 1.5% to about $235 in midday trading Oct. 30. The stock is up more than 20% over six months, lifting Chevron's market capitalization above $460 billion.

The watch item: whether the 2027 budget, due with full-year guidance, formally carries that $500 million exploration increase — and whether any of the new acreage gets a spud date attached.