Chevron’s Q1 2025 earnings report, combined with a detailed analysis of rig activity data, paints a clear picture of a supermajor shifting gears. The emphasis? Sharpening operational efficiency, maximizing returns, and strategically adjusting to a lower-margin environment.
Here’s what you need to know about capital discipline, contractor activity, and where the Permian momentum is headed.
📉 Capital Expenditures Down, Yet Production Holds Strong
In Q1 2025, Chevron reported $3.9 billion in capital expenditures, down from $4.1 billion in Q1 2024. Affiliate CapEx also declined, particularly at TCO in Kazakhstan, following the completion of the Future Growth Project. Notably, Permian Basin production rose 12% year-over-year, despite rig count pressures.
“Our resilient portfolio, strong balance sheet, and consistent focus on capital and cost discipline position us to deliver industry-leading free cash flow growth by 2026.”
— Mike Wirth, Chairman & CEO, Chevron
The bottom line: Chevron is producing more with less — thanks to technological innovations like triple-frac completions, AI-enabled drilling, and electric-powered frac fleets.
📊 Quarterly Drilling Activity Slips, But Efficiency Up
While Chevron’s Permian production rose, overall Q1 2025 drilling activity declined:
- Q1 2024: 149 records
- Q1 2025: 113 records
- Change: ▼24%
This drop reflects capital discipline and strategic drilling, rather than operational weakness. Chevron is shifting from rig volume to completion speed and well quality.
🛠️ Drilling Contractors: Top Performers in Q1 2024 & 2025 Combined
Here are the leading rigs by combined activity across both quarters:
Contractor and Rig Q1 2024 Count Q1 2025 Count Total Q1 Activity True 41 11 10 21 H&P 517 10 11 21 Nabors X10 11 7 18 Patterson 272 12 3 15 Patterson 812 8 7 15
⚙️ Key Efficiency Trends
- Triple-Frac Expands: Chevron aims to use triple-frac on 50–60% of Permian wells in 2025 (up from 20% in 2024), reducing completion time by 25% and cost by 12%.
- Digital Integration: AI tools are being deployed for real-time optimization across drilling ops.
- Asset Pruning: East Texas gas assets and midstream facilities were sold, streamlining the portfolio.
🗺️ Top 5 Provinces (States) by Q1 Drilling Activity
| Province | Q1 2024 Count | Q1 2025 Count | Total Q1 Activity |
|---|---|---|---|
| Texas | 38 | 39 | 77 |
| Colorado | 46 | 21 | 67 |
| North Dakota | 33 | 25 | 58 |
| New Mexico | 29 | 25 | 54 |
| FO GULF | 1 | 3 | 4 |
Texas continues to lead drilling activity, but Colorado and North Dakota remain vital contributors, with New Mexico’s Lea and Eddy counties showing sustained investment.
🧭 Final Takeaway
Chevron’s Q1 2025 performance tells a story of capital discipline paired with operational intensity. While rig activity tapered, Permian output rose, underscoring how efficiency — not just investment — now drives competitive advantage.
As other operators follow suit, the race isn’t just to drill more — it’s to drill smarter.
