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Eimear Bonner

Thanks, Mike. For the first quarter, Chevron reported earnings of $3.5 billion or $2 per share. Adjusted earnings were $3.8 billion or $2.18 per share.
Included in the quarter were special items totaling $175 million. Legal and tax charges were partially offset by the fair value measurement of the Hess shares. Warranty effects decreased earnings by $138 million. Organic CapEx was $3.5 billion, our lowest quarterly total in two years. Inorganic CapEx was approximately $400 million, primarily related to investment in our Power Solutions partnership. Chevron generated cash flow from operations of $7.6 billion, excluding working capital.
Working capital was primarily tax payments related to the sale of our Canadian assets that completed in the fourth quarter of 2024. We expect our working capital unwind of $1 billion over the remainder of the year. In the quarter, we issued new long-term debt of $5.5 billion. The purchase of Hess shares is expected to reduce the number of Chevron shares issued at closing by approximately $16 million. Compared with last quarter, adjusted earnings were $200 million higher. Adjusted upstream earnings were flat to last quarter, higher realizations and timing effects were offset by lower liftings and lower affiliate earnings mainly from higher DD&A at TCO.
Adjusted downstream earnings were higher due to improved refining margins and lower turnarounds and maintenance. First quarter oil equivalent production was flat to last quarter. Production from the future project at TCO and recent project start-ups in the Gulf of America offset impacts from asset sales. We expect growth towards a sustained 1 million barrels of oil equivalent per day to resume in the Permian in the second quarter with higher frac activity.
Chevron's strategy and financial priorities remain consistent, and our track record is proven. We've grown our dividend for 38 consecutive years through multiple commodity cycles, leading our peers and growth over the last decade. We've built a resilient upstream portfolio that leads our peers in breakeven. We're delivering growth projects that are expected to generate an incremental $9 billion of free cash flow in 2026 (technical difficulty) dollar Brent. Our capital program is as flexible and efficient as it's ever been, with the majority of our 2025 span directed to short-cycle assets and soon to be online deepwater projects such as those in the Gulf of America and Eastern Mediterranean.
Our balance sheet remains strong with net debt ratio of 14%, well below our target range of 20% to 25%. We've repurchased shares 18 of the last 22 years and bought back at record levels in the past two years. We provided a guidance range for annual buybacks of $10 billion to $20 billion depending on market conditions more than two years ago. That guidance remains unchanged. In line with the current macro environment, we expect share repurchases to be $2.5 billion to $3 billion in the second quarter.
I'll now hand it off to Jake.

Jake Spiering

That concludes our prepared remarks. Additional guidance can be found in the appendix to this presentation and the slides and other information posted on chevron.com. We are now ready to take your questions. (Event Instructions) We will do our best to get all of your questions answered. Katie, please open the lines.

Question and Answer Session

Operator

(Operator Instructions) Neil Mehta, Goldman Sachs.

Neil Mehta

Mike, I know you were in Kazakhstan a couple of weeks ago. So I'd love a full rundown of your perspective on PCO, specifically, the startup looks like that has gone well. Early discussions around the concession extension and then your perspective around production levels and risk of curtailment.

Michael Wirth

Okay. Well, thanks, Neil. First of all, I am really pleased with the commissioning and start-up performance at the Future Growth Project.
It was a world-class ramp. We achieved nameplate capacity in less than 30 days. This was due to extensive testing of equipment during the commissioning phase, leveraging a lot of the same people, procedures and other practices that were put in service for the wellhead pressure management project over the prior 12 months, applying learnings from some of our other major capital start-up projects over the years.
We brought in experience leaders from the existing operations that are familiar with the field, with the operating conditions and people that have participated in other start-ups. So it was just very, very well executed. We'll continue in the short term to do performance testing of major equipment under actual operating conditions, process optimization, et cetera. So we are very, very pleased with that start-up and the performance to date.
I did travel to Kazakhstan last month and I had an opportunity to meet with President Tokayev. We had a very good visit. We talked about our historic partnership. We talked about our investments in the country and how they've delivered value over the last three decades plus. And with the project behind us, we did turn our discussion to the future. And there was mutual intent expressed to negotiate an agreement which extends the concession beyond 2033.
I took away a very positive outlook on that. We think it's in everyone's best interest to try to complete these negotiations in a timely manner. That said, these are complex discussions. They do take some time to complete, and we'll provide updates on that as appropriate as those efforts advance.

Operator

Jean Ann Salisbury, Bank of America.

Jean Ann Salisbury

A lot has been going on in the California refining market. With the recently announced competitor closures of refineries, how are you thinking about your position there?

Michael Wirth

Yes. So we've got a strong position. We've got two refineries that have good scale, good complexity. We've got strong integrated value chains with a strong brand in the marketplace. I'm not surprised to see the announcements that have come out. We've been pretty vocal that the policies coming out of the state of Sacramento -- out of the state and out of Sacramento particularly make it nearly impossible to invest in California going forward. The result of that has been significantly higher cost for consumers than in the rest of the country.
There is the risk that supply of fuels is going to be tighter -- and that creates future risk. On the last call, I said some of these policies, including the state inserting itself into operational matters like planning turnarounds, I think, is an unwise move. I think central planning of the economy hasn't worked in other social estates and it won't work in California is my prediction. We do not have any announcements on our refineries at this time.

Operator

Biraj Borkhataria, RBC.

Biraj Borkhataria

I just wanted to go back to the financial framework and the decision to slow down the buyback today. If I look at the last 12 months, the payout ratio has been almost 100%, and that was obviously an oil price of much higher than it is today. So I'm just trying to reconcile how our cash generation would look at 60% or maybe below and how I reconcile that with be the low end of the $10 billion to $20 billion range because to me, it looks like the bottom end of the range should maybe be lower than that $10 billion. So how are you thinking between executing the buyback on a consistent basis and then obviously leaning on the balance sheet because that balance sheet has allowed you to do countercyclical deals like mobile and things like that. So I appreciate some color on that.

Michael Wirth

Yes. Thanks, Raj. I'll take you back to our long-standing financial priorities. The first priority is to grow the dividend. We've increased that for 38 years in a row, a 5% increase earlier this year. Second is to invest in the business. We've been very disciplined with capital, lowered organic capital by $1 billion this year and affiliate capital by another $1 billion this year, keeping a strong balance sheet, 14% net debt to a AA credit rating, which is something very few companies in any industry carry. And then buybacks with a through-the-cycle approach.
We've repurchased shares in 18 of the last 22 years, including through COVID, through the financial crisis. And more than two years ago, we announced or we introduced guidance on the buybacks with a range of $10 billion to $20 billion based on a view of the external environment. The high end of that was premised on a strong outlook on the commodity. The lower end of that was based on a weaker outlook for the commodity. And I think it was 85-ish on the top end and 60-ish on the bottom end. And so for most of the last two years, we've been in the upper portion of that range the market has moved to the lower portion of that range.
And our guidance remains within that range. So I think it's important to look at this through the cycle. The rate at which we're buying shares back now is higher than at any point in our history other than the last three years. In '22, '23 and '24 were the highest buyback years we've had. Before that, we never even had a year that got above 8. And we've been much stronger than that here subsequently and continue to do that forward. So the range is unchanged.
We've also always said that we would move back towards a 20% to 25% net debt ratio through the cycle. And so this move is consistent with that. Last thing I'll say is -- we've been through these cycles before. We know what to do. We know how to manage it. And we know that opportunity can present itself as you referenced, and we will remain attentive to those kinds of opportunities if and when they arise, and we'll retain the financial strength to consider them.

Eimear Bonner

Biraj, I might just add a little bit on your point on cash generation. It's 60 as we guided to in the last quarter, we're poised to deliver a leading free cash flow growth, $10 billion of incremental free cash flow growth at 70. That's $9 billion at 60. And the key catalysts that deliver that are the start-ups of kind of our major projects and the achievement of major milestones and all of that is well underway and then the completion of our cost reduction program as well that's off and running. So just the cash generation, we feel that that is very resilient even at lower prices, and we're prepared.

Operator

Doug Leggate, Wolfe Research.

Doug Leggate

Sorry, I was on mute, schoolboy error. I'm so sorry about that. Josh, I was going to ask about the macro, but I didn't want to ask such an asking question, but you seem to be in the crosshairs of probably the two most important macro stories in the market right now. And I just love your perspective on it. The first is obviously Venezuela and the potential loss of production there. And the other is what appears to be an impending market share battle going with the declaration of cooperation, single-handedly seemingly pointed at Tengiz.
In other words, the start-up of production is exacerbated Kazakhstan’s over production against their quota and of course, that seems to be what's driving these accelerated decisions by OPEC+. So I guess my question is, can you offer any perspective on the physical changes you're seeing in your business in Venezuela. And when you met with the President, was there any consideration whatsoever of curtailment to try and help meet their quotas? Because, frankly, if the answer is no, it's pretty varied for the oil price.

Michael Wirth

Yes. So I'll start with Venezuela, Doug. I think the news coverage on this has been pretty accurate. We've got a long history in the country and believe that our presence has been a good thing for Venezuela has been a good thing for the US. We've been operating under different forms of sanctions from OFAC -- going back to the first Trump administration through Biden administration and ongoing under the current one.
Recent changes have resulted in us being unable to pay our tax and royalty payments for liftings that were being made to bring Venezuelan oil to the US. And so those liftings have come to a halt. The barrels are still flowing. There's going to other markets. China is the biggest importer of Venezuelan oil. Their media reports that government officials from Venezuela have been in China this week discussing even more sales to China. Our current license reaches its end on May 27. We're in dialogue with the government on how that license will be modified and extended if, in fact, that's what they choose to do, and that's certainly been the history over the many years I just referenced.
So we'll share more about that as we as we know more. But the barrels are flowing. They're just not flowing to the US today. On OPEC+ and Kazakhstan, there really were not discussions of that. We don't engage in discussions about OPEC or OPEC+ targets. And my discussion with the present focused on A, the start-up of the project, which has been good; and B, the future.
And so the fact of the matter is the barrels we produce at TCO of high value to the government. They're important to their fiscal balance. And historically, those barrels have not been curtailed. Anything beyond that, I would refer you over to people that speak on behalf of OPEC+ or the countries.

Operator

Lloyd Byrne, Jefferies.

Lloyd Byrne

I was going to ask about the return of capital. And I think that's a really good answer you guys had. But let me try the Gulf of Mexico, the Ballymore is online. Can you just walk through the next steps to get to the 300,000 barrels a day? And are there any hurdles we have to look out for?

Michael Wirth

Yes. We're -- as I said, we're very pleased with Ballymore. That project, in particular, has some of the most prolific wells that we've seen in the Gulf of American, frankly, well beyond that.
The expectation as we ramp up there is that we'll see 25,000 barrels a day flow from each of three wells. So 75,000 barrels a day of production from just three wells. We've got two of those wells online right now and ramping them up. The third one will come online later this year. The project has been executed on time, on budget and in just three years. They're also interestingly, some of the highest temperature wells we've ever seen, 325 degrees down to the formation, which other prolific fields in the Gulf of America have been at 275, 250, 225. So a very interesting field, a very prolific field Wale. I won't speak for the operator.
I'll just say that the start-up there has been smooth, and we expect that to ramp through 2025, and I'd refer you to them for details. And at Anchor, we've got two wells online right now that are performing very well. We expect two additional wells to come online this year, one around midyear, one towards the end of the year and remaining wells to come online in '26 and '27. So at each project, we've got strong production flowing.
We've got drilling activity and completion activity underway or in the queue, rigs, vessels, crews, all assigned to them. And so in the Gulf, weather can always be a bit of a risk. But other than that, from an execution standpoint, these are all three in a very good posture.

Operator

Ryan Todd, Piper Sandler.

Ryan Todd

You've got a slide in the deck looking at Permian performance and the improvement you've seen there in the Delaware Basin in 2024. Can you talk about I mean, you talked about some of this in the past, but can you talk about what drove the difference, whether in terms of well mix, development strategy, completions, et cetera? And what you see as the potential implications for the 2025 program or outlook?

Michael Wirth

Yes. So just to ground everybody, roughly 80% of our development program last year was in the Delaware, and we saw a strong improvement in performance there versus the prior, in particular, the second Bone Spring in New Mexico outperformed expectations. We also had good performance in the Texas portion of the Delaware and the Wolfcamp C and the Wolfcamp A, which showed good year-on-year performance improvement.
So we expect 2025 type curves to look pretty similar to what we saw last year in the Delaware. And again, most of our program is in the Delaware, 85% as we look at 2025, so even a little bit more than we saw last year. Last thing maybe I'll say on that, Ryan, is sometimes we had questions when I meet with investors on gas oil ratio. We are right now seeing an oil cut that's somewhere in the range of 43% to 45%. We think that's going to continue as we move through the end of the decade.
It may move around a little bit by quarter based on POP timing and geography. But we expect that to be pretty stable. And also on New Mexico, we're going to see more POPs into Mexico this year than we did last year. And overall, those tend to be bigger wells. They're more productive wells. They produce more oil. They also produce more gas. But very pleased with performance in the Permian and feel very good about the outlook for this year.

Operator

Paul Cheng, Scotiabank.

Paul Cheng

It seems like -- there's some good news from Cyprus. You guys signed with the government that to allow the gas project to go to proceed. Can you give us some idea that maybe update us on -- in terms of the timeline, what's the next step, the size of the project in terms of the gas warning? And any color that you can provide?

Michael Wirth

Yes. You bet, Paul. I'll start by saying we're excited about our entire portfolio in the Eastern Mediterranean, and that is a tribute to the people at Noble. This is largely a legacy Noble Energy position. We've got some good exploration acreage in the offshore Egypt area that we brought to the table as well and the expectations for some exploration wells there in the coming couple of years.
But it was a nice milestone to see that we've got an agreed field development plan for Aphrodite, some updates to the PSA there. And the initial development plan, Paul, is going to be a flow production unit in the -- in Sipat Waters, production of about 800 million cubic feet of gas per day. The gas would flow to Egypt, a market that's growing and has a need for more gas. The demand there is very strong. We entered pre-FEED activities in the first quarter we're working to ensure that we can get competitive returns out of this project, there's some commercial work that needs to be done as well.
And all that needs to be done before we move to a potential FID. So -- we are again pleased that we've got an agreement on that. That gives you a little bit of the scale of the project in the first phase here, and we'll talk about it more as we move through the pre-FEED and into FEED.

Operator

Stephen Richardson, Evercore ISI.

Stephen Richardson

I was wondering if you could give us your -- curious on your recent thoughts on CPChem, obviously, in the middle of some pretty significant investments in that business through what looks to be a trough, at least in the olefins side of the business. But maybe your current thoughts on the business and then also how are you thinking about potentially maybe owning more of it over time and how that fits into your current thoughts?

Michael Wirth

Sure. Thanks, Steve. Well, first of all, I'll say we like the longer-term fundamentals of the Chemicals business. We've been in a tough part of the cycle here recently as we've seen some capacity additions into the market. So it's going to take time for the market to absorb those. So we think we're still a few years away from returning to mid-cycle.
But CPChem has been a great business for us, and we've got 25 years of history roughly now. And they've been a good operator. They've been a good project executor. It's a portfolio that's significantly advantaged due to their feedstock position, which is primarily ethane in the US Gulf Coast and the Middle East. They've had a very good low-cost operator. And we've got a couple of growth projects underway, one in Qatar, one in Texas, on track to come online end of '26, early '27-ish. And so it's been a very successful partnership for us over more than two decades.
Getting a larger share of a business that you like is always something that you would take a look at. We have advised the partner in CPChem that we'd be interested in acquiring the other half at a reasonable value for both parties, and we'll see how that plays out.

Operator

Josh Silverstein, UBS.

Josh Silverstein

Chevron has a pretty unique asset in the Permian given your mix of operated, non-op and royalty volumes. Can you provide us some details as to what you're seeing across the non-op royalty side now and any reduction in activity there and how that may play into the kind of the plateau level for Chevron.

Michael Wirth

Yes. So at this point, we don't really see any actions that have been taken to pull back by our partners. We haven't always identified exactly who our partners are, but three-quarters of our production come from larger mega-cap companies, people that you cover and know. And most of that production comes in the -- in core parts of the basin, areas that have got low breakevens and are very proven.
So on NOJV, we've got a line of sight to essentially all of the AFEs and most of the POPs have already spud. The planned POPs for this year in our NOJV, the wells have already been spud. So I think there's a pretty high degree of confidence that we're going to see that go.
On royalty, maybe not quite as high a number, but close on POPs that are also in execution. So we do have interest in, I want to say it's 1 in every 4 acres in the Permian. And a lot of that exposure gives us the ability to see exactly what's going on with other operators. And at this point, I think people are -- what we see as people pretty well stay in the course.

Operator

Lucas Herrmann, BNP Paribas.

Lucas Herrmann

Probably what -- just a question on cash flow for Eimear. It looks as though the equity contribution or dividend contribution that you're anticipating this year is now $2 billion relative to -- I think you had guided towards $1 billion of excess, et cetera, the full year stage. Am I correct that you've changed your expectation? And if so, is that a consequence of higher expected dividends? Or I don't think it's a change in lower net income. So any comment -- appreciated.

Eimear Bonner

Yes. Lucas, I think maybe the two things to point are the impact of the TCO DD&A. So given that we started up the project in January and ramped up ahead of our original schedule, the earnings guidance going forward reflects the DD&A update. In addition to that, we've got some CPChem outlook for margins has been updated as well. So those will be the two main factors. Everything else is consistent.

Michael Wirth

And Lucas, the affiliate dividend guidance for the full year is unchanged as it was. So it's just a difference between the 2.

Operator

Roger Read, Wells Fargo

Roger Read

I guess, maybe with the macro in a lot of people's minds at risk of lower oil prices. Just wondering, Mike, with all the changes here or project completions, Gulf of Mexico, fairly essentially through its process, Kazakhstan up and running, the Permian kind of flat lining.
When we think about the resiliency of Chevron, of, say, a $50 oil world, what do you think has been sort of the change in the whether you want to call it a base decline rate or the sustaining CapEx? Like how should we think about kind of cash flows and cash CapEx commitments in a possibly softer oil price world.

Michael Wirth

Yes. I mean there's two things that I might point to, Roger. Number 1 is we've got a portfolio now that has a much larger percentage of it in large and very flat production profile assets, i.e., low decline assets. So big LNG projects in Australia and Western Africa, the expansion of TCO. And frankly, the way we've been able in a very capital efficient way move towards kind of plateau-ish production with relatively highly efficient investments in some of the unconventionals.
And so if I go back a decade ago, we were fighting decline, and that required a lot of capital investments and just to hold even, let alone to show some growth. And we've been showing growth here in recent years with a much lower capital budget. The second thing that's really important is the flexibility that we have in our capital budget. So we've already come down $1 billion from last year from $16 billion to $15 billion. Our CapEx as a percentage of cash from ops is, I think, the lowest in the industry.
And almost two-thirds of our capital is either short-cycle shale or project that's -- project spend that's completing over the next year or so. And so we've got a lot of flexibility if we need to exercise that. We've shown, I would call discipline coming into this year by tightening our belt a notch and bringing capital down a little bit. But if we needed to bring capital down further, we certainly could do so. We showed in 2020, we started the year at a $20 billion capital budget. I think we finished the year at $12 billion. So we've got the ability to flex that capital if we need to. We've not made that decision at this point. But certainly, that's -- I would say those are the two big things that are different if you look back to days gone by.

Operator

Phillip Jungwirth, BMO.

Phillip Jungwirth

Congrats on the start-up of Ballymore Anchor well before that. As we think about what's next in the Gulf of America, can you just talk about your optimism around future prospects, Paleogene or brownfield tiebacks. And generally, how do you see the cost structure or breakeven now for deepwater versus shale?

Michael Wirth

Yes. So thanks for the congratulations. What I would say is in the relative near term, you're going to see us focus on infill and stage developments. We've got a long history here of projects that once we've got a new hub in place, they have multiple stages of development. We've seen that at Jack St. Malo at Tahiti, at Mad Dog and Perdido. And we're working on future state of some of these recent start-ups.
So an Anchor Phase 2, a Ballymore 2, a Whale 2. And I would fully expect that you'll see us extend the life of those projects with some highly efficient and very returns accretive further development. If you look at our exploration portfolio, 80% of it is within tieback range of existing hubs.
And so Ballymore is a great example of a strategy to really focus on identifying opportunities to develop accumulations that might not support a new greenfield development but are highly economic to tie in as a brownfield project. And so we'll continue to focus our exploration portfolio in that. We've had -- we've been a participant in a discovery that's already been announced earlier this year and are very optimistic about our exploration program. And then the other 20%, you would maybe describe as more frontier. Breakevens have come down a lot.
And there was a time again and maybe in kind of linking Roger's question about what's changed. A decade ago, we needed oil prices that were well north of what we see today to get very modest return. Development costs were up. They were in the 20s headed to the 30s and higher. We're now down in the teens and push into the low teens on development costs through a whole different approach to facility design and construction standardization.
And so we've seen the breakevens there become very competitive, they had to because we had such good opportunities in other parts of our business. So we've got one of the best portfolios in the industry and Wood Mac data shows that we've got the lowest upstream breakeven in the industry. And I think a big part of that is what we've been able to see in deepwater development.

Operator

Betty Jiang, Barclays.

Betty Jiang

I want to ask about the progress on the Power Ventures. I mean it's clear that the AI power demand is not slowing down, and you guys have the timing advantage. How are the customer conversations going? You've spent $400 million of inorganic CapEx in the JV in 1Q. Just want to see how that spending trends over time, especially considering some of the inflationary pressure that we're hearing in the space?

Michael Wirth

Yes. So we've been actively engaging with prospective customers and are still seeing very strong demand in those conversations. We're trying to narrow, frankly, because there are so many people that are interested in trying to partner up when you can move quickly as we can with these turbines. So we're also narrowing down the potential sites. We screened a lot of potential locations in different geographies around the country. We have narrowed those significantly and are moving towards engineering and EPC options on the sites that we find to work the best for us and for customers, which is an important part of that.
We're working toward an FID before the end of the year. As you note, speed to market is an important differentiator here we will remain disciplined. There are cost pressures on some of the components of building out a power complex like this. We've secured pricing on the turbines themselves. There's other elements of the buildouts that are also required and between market demand, potential tariffs and other effects. We have to keep an eye on that. So we're going to stay very disciplined because this needs to generate returns that will compete in our portfolio.
And if we can achieve those kinds of returns. These projects will move forward. If we can't, we will need to look at our alternatives. But right now, I would say everything is moving fast, as you said. There's a tremendous amount of interest tremendous amount of activity. And I'm very pleased that we're in a first-mover position on this call it an early mover position.

Operator

Devin McDermott, Morgan Stanley.

Devin McDermott

So Mike, in your response to Roger's question before, you talked a bit about flexibility of the capital program, and Eimear, you had similar comments in your prepared remarks. Given the cash flow growth you've already highlighted the low upstream breakeven strength of the balance sheet, there's probably no need to make adjustments on capital even in somewhat softer oil prices probably more just about optimizing returns.
But I wanted to ask about how you think about some of the parameters or market conditions that might make you make some adjustments to some of your short-cycle investments in places like the Permian.

Michael Wirth

Yes. I think you've read the situation right, Devin. We're prepared. You get into an environment like this and you pull out the playbook. And we've looked at different market scenarios in both the depth and duration of a potential commodity cycle. And we've looked at our business and how we're postured today from a production standpoint, a cash generation standpoint, a debt standpoint and all the different levers that we have to pull and have identified the things we could do based on time posts and a view on the market.
It's very early to, I think, have a high degree of confidence in terms of how this all plays out. The trade and tariff situation has been dynamic, and we need to see how that manifests itself over time. And of course, the OPEC change is one that is relatively recent as well, and we have to see how that plays out. And so we're very well prepared, and we've been through these kinds of things before.
I would say, I've been in one of the senior positions in '08 when we had the financial crisis in '14 when we saw prices dropped in '20 when we had COVID and again now, I don't think we've ever been in a better position to navigate it and have had more levers available at our disposal and more strength to come through a cycle than we have today.

Eimear Bonner

Devin, I would just add that our balance sheet is in a really strong position at 14% and net debt. Our credit rating is AA. So as part of being prepared, it's ensuring that our balance sheet is strong. And so that's good. I'd also mention that the cost reduction program and the capital reduction that is underway, actions that we took last year put us in a strong position as well. And cost and capital discipline always matter in our business. And so we are focused on delivering on the plants that are behind those reductions and they're picking up piece, and we're doing well there. So I mean, it's preparation. We have leading indicators that we're monitoring, signpost and we don't need to do anything additional today, but we'll be ready with those signpost act if needed.

Operator

John Royall, J.P. Morgan.

John Royall

So I was hoping for a little more color on expansion at Pasadena and how that's running and the benefits you're seeing overall to your Gulf Coast system? I know it was partly about synergies with Pascagoula. So maybe just a little more color on that and how the project is contributing several months into the start-up.

Michael Wirth

Yes. Thanks, John. The project is complete and online. We had FEED the crude unit, the first week of December. And we've been ramping up to full capacity here this quarter. We had stable operations in the first quarter at about 110,000 barrels a day of crude feed, and we're really learning how to optimize that plant now at these higher FEED rates. It will allow us to run more of our own equity from the Permian.
And as we look at export markets that can be attractive to capture full value chain margins here in the US. It will take it up by about 50% before we could run about 85,000 barrels a day. This will take us up by 40,000 to 125,000 barrels a day. And so we've got the ability to support supply more products to our customers in the Gulf Coast. We've got a big market position in Texas, which historically has been served through product exchanges or purchases.
We can integrate fully into that now with our own production. There are very significant synergies we can realize with Pascagoula on immediate streams that can be moved from one facility to the other for upgrading the high-value products. It also helps during turnarounds to be able to store inventories, to move intermediates back and forth or finished products back and forth. And we've got US flagged tonnage that allows us to move those streams between the two facilities. And so a good project to improve flexibility and margin capture here on the Gulf Coast.

Operator

Jason Gabelman, TD Cowen.

Jason Gabelman

Yes. I wanted to go back to the buyback guidance, if I could. -- you've cut to the low end of the range, but it is still a pretty wide range. And I think we see your peers either guiding to a percentage of cash flow or a fixed amount that gives more visibility to where the buyback will be quarter-to-quarter and year-to-year.
So I was wondering if you could provide any additional color on how to think of the pace of buybacks through the balance of the year, if it's going to oscillate between the low end to the high end of the range or where it will oscillate in between? And then the other point on that is if you could just talk about where the buybacks are going to be following the Hess acquisition, you had a prior guidance of $5 billion. I'm wondering -- per quarter, sorry, I'm wondering if you have any update on that figure?

Michael Wirth

Yes, Jason. First of all, it’s not a formula that we're going to announce a percentage of this or that because that really, in some ways, defeats the purpose of what we've tried to do, which is to be steady through cycles and not expose investors the uncertainty that volatile markets can introduce into this. And so you've seen our range has been consistent -- we introduced as I said, more than two years ago as we've issued quarterly guidance and executed. That's also been fairly consistent with the guidance and with the then current market conditions, and as we have seen market conditions change, and we've modified our guidance, I would expect to remain consistent if we're in a market like the one that we're in right now.
And so we don't intend to yo-yo this around if that was kind of the question. And I think our track record, if you lay it out and look at it versus others, it speaks for itself that we have been able to stay steadfast and consistent, as I mentioned earlier, 18 out of 22 years, including during downturns. And the absolute of the range that we've issued now, $10 billion to $20 billion are above anything we ever did prior to COVID.
Even in the kind of late 2000s, before the financial crisis, when we were seeing $140, $150 oil markets, we were repurchasing, at max, one year, $8 billion. And we've now had three years, I think the trailing three years, the number is $50 billion in aggregate, and the $10 billion to $20 billion going forward is a very strong and robust range that you can expect us to stay within.

Eimear Bonner

Yes. And then maybe just specific to the guide rate that we issued for the quarter, 2.5 as well within the $10 billion to $20 billion annual, putting it into the context of what we've done in the last couple of years. I mean prices have been seen to $20 higher when we've delivered a $15 billion program, and we'll deliver something between 11 and 13 if we just project it. So it's still a very strong program. We're still buying a significant mind of our shares. And that's on top of a dividend that's growing faster than our peers in the S&P 500.

Operator

Bob Brackett, Bernstein Research.

Bob Brackett

Question around the tariff situation and how it might impact either CapEx or projects. What are some of the things you can do to adjust to tariffs in terms of controlling costs.

Michael Wirth

Yes, Bob, we're watching this very closely and preparing and actually in the process of taking some actions to mitigate the impacts. Our direct exposure is relatively limited. Energy has been largely exempted from tariffs. And if you're looking at our cost structure of goods that we buy of our third-party spend, roughly 80% of it is on services, not on goods. Of the 20% that is spent on goods, a lot of that tends to be sourced locally or regionally.
And our US, for example, where our largest portion of our capital spend is we've got strong domestic sourcing on most of the goods that we use in our unconventional programs in the DJ and the Permian for instance. Our current estimate is we may see a 1% impact on the cost of a shale well. So it's a dynamic environment, and we'll watch how these things evolve. But we've got strong engagement with our suppliers. We've got sourcing from multiple locations. -- and we've been anticipating this and preparing for it. So the impact is not zero, but I think the impact is manageable and it's -- you've seen announcements in other industries where they're more directly exposed than we are.

Jake Spiering

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

Operator

Thank you. This concludes Chevron's First Quarter 2025 Earnings Conference Call. You may now disconnect.