03:31 PM EDT, 10/02/2024 (MT Newswires) -- Chevron ( CVX ) upcoming Q3 results are expected to reflect continued strong performance in the Permian Basin in the southwestern US, which is seen as one of the key drivers for future growth, UBS said in a note emailed Wednesday.

Upcoming projects including the Tengizchevroil Future Growth Project in Kazakhstan and startups in the Gulf of Mexico are also seen as key drivers for growth over the next 12 months, the investment firm said.

"We see another positive Permian update, with operated well performance improvement and strong non-op activity leading to potential upside to CVX's FY24 15% y-o-y basin growth outlook," UBS said.

The TCO-FGP project in Kazakhstan is on schedule for a startup in the first half of 2025, expected to drive a $6 billion plus increase in free cash flow in 2025 even with a projected $5 per barrel drop in crude oil prices from 2024 levels, UBS said.

The main risk is uncertainty around the Hess (HES) acquisition, but UBS still expect it to close by Q3 of 2025, the note said.

For Q3, UBS estimates the company's earnings per share at $2.48, down from a prior forecast of $2.89 and below Wall Street estimates of $2.71, due to upstream downtime, lower US gas prices, and weaker refining margins, while Permian production is expected to rise 3.5% quarter-on-quarter, keeping Chevron ( CVX ) on track for 15% year-over-year Permian basin production growth, the note said.

UBS maintained a buy rating on Chevron ( CVX ) ahead of the company's Q3 results with a price target of $189.

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