Chevron Corporation (CVX) shares rose 1.54% in premarket trading on Friday to $195.53, after gaining 0.23% on Thursday to close at $192.31. The move followed a strong second-quarter report showing earnings of $12.1 billion, supported by higher production, stronger refining margins, and favorable commodity prices. Chevron also announced a long-term power supply agreement with Microsoft, highlighting a broader push beyond traditional energy markets.

The company reported diluted earnings of $6.11 per share for the quarter, up from $1.45 in the same period a year earlier. On an adjusted basis, Chevron posted profits of $12.0 billion and adjusted earnings per share of $6.06. The results included a $230 million gain from asset sales and $86 million in pension-related expenses.

Operating cash flow climbed to $22.6 billion from $8.6 billion a year earlier. Free cash flow increased to $18.1 billion, helped by operational improvements and working capital optimization. Chevron also reduced debt by $8.4 billion during the quarter, a record amount that strengthened the company's balance sheet.

The board approved a quarterly dividend of $1.78 per share, payable on September 10, 2026. Shareholders of record as of August 19, 2026, will receive the payment.

Production averaged 4.07 million oil-equivalent barrels per day, up 20% from the same quarter last year. The increase was driven mainly by the Hess acquisition, along with continued growth in the Permian Basin and the Gulf of America. U.S. production reached a quarterly record of 2.08 million oil-equivalent barrels per day. The Hess deal, completed earlier in 2026 after a prolonged regulatory and arbitration process, was one of the largest consolidation transactions in the oil and gas sector in recent years, giving Chevron a larger stake in Guyana's prolific Stabroek Block alongside operator ExxonMobil.

Upstream earnings rose to $8.18 billion from $2.73 billion a year earlier. Chevron said higher crude prices, stronger sales volumes, and reliable operations supported results across its domestic and international portfolio. Production in the Neutral Zone shared with Saudi Arabia and Kuwait was constrained by regional conflicts.

Chevron said it generated $1.5 billion in synergies from the Hess transaction within one year of closing, exceeding the original projection by 50% and arriving ahead of schedule. The company also said it achieved its $3 billion annual structural cost-reduction target six months early.

Chevron entered into a 20-year agreement to supply 2.67 gigawatts of power capacity for Microsoft's planned data center complex in West Texas. The arrangement is expected to provide contracted revenue and expand Chevron's role in large-scale power infrastructure for the technology sector. The deal comes as major technology companies face surging electricity demand from artificial intelligence workloads, prompting hyperscalers to secure long-term power agreements directly with energy producers rather than relying solely on grid-supplied electricity.

Separately, Chevron said it continued discussions with Iraqi authorities on possible oil development projects, including the West Qurna 2 field, Nasiriyah opportunities, and export pipeline infrastructure. The company also advanced portfolio optimization through downstream asset divestitures in Asia-Pacific markets.

Capital expenditures totaled $4.5 billion in the quarter, partly reflecting the addition of former Hess operations. Refinery throughput averaged 1.07 million barrels per day, and utilization rates exceeded 97%.

The combination of stronger earnings, higher cash generation, debt reduction, and the Microsoft power contract contributed to the stock's positive premarket move.