Chevron Q3 profit jumps

Chevron Corporation today reported earnings of $5.6 billion ($2.95 per share – diluted) for third quarter 2014, compared with $5.0 billion ($2.57 per share – diluted) in the 2013 third quarter.

Foreign currency effects increased earnings in the 2014 quarter by $366 million, compared with a decrease of $276 million a year earlier. Sales and other operating revenues in third quarter 2014 were $52 billion, compared to $57 billion in the year-ago period.

“Despite a decline in crude oil prices, our third quarter earnings were higher than a year ago,” said Chairman and CEO John Watson. “Cash generation in the quarter was solid, and our financial strength enables us to both reward our investors through distributions and fund value-adding projects.”

“We continue to make good progress on our key development projects,” Watson added. “New production was recently achieved at the Bibiyana Expansion Project in Bangladesh. The Tubular Bells and Jack/St. Malo projects in the deepwater Gulf of Mexico are expected to start up during the fourth quarter and important construction milestones continue to be reached on our Gorgon and Wheatstone LNG projects in Australia. In addition, we continue to make steady progress on the development and Policy, Government and Public Affairs ramp-up of production from our shale and tight resources, particularly in the Permian. These and other major capital projects are expected to deliver significant growth in production, earnings and cash flows in the years ahead.”

Worldwide net oil-equivalent production was 2.57 million barrels per day in third quarter 2014, compared with 2.59 million barrels per day in the 2013 third quarter. Production increases from project ramp-ups in the United States, Argentina, Brazil and Nigeria and improved reliability at Tengizchevroil were more than offset by normal field declines, production entitlement effects in several locations and the effect of asset sales.

U.S. upstream earnings of $929 million in third quarter 2014 were down $97 million from a year earlier, as gains on asset sales, lower exploration expenses and higher crude oil production were more than offset by lower crude oil prices and higher operating expenses.
The company’s average sales price per barrel of crude oil and natural gas liquids was $87 in third quarter 2014, down from $97 a year ago. The average sales price of natural gas was $3.46 per thousand cubic feet, compared with $3.23 in last year’s third quarter.

Net oil-equivalent production of 677,000 barrels per day in third quarter 2014 was up 22,000 barrels per day, or 3 percent, from a year earlier. Production increases in the Permian Basin in Texas and New Mexico and the Marcellus Shale in western Pennsylvania were partially offset by normal field declines elsewhere. The net liquids component of oil-equivalent production increased 4 percent in the 2014 third quarter to 464,000 barrels per day, while net natural gas production increased 3 percent, to 1.28 billion cubic feet per day.

International upstream earnings of $3.72 billion decreased $346 million from third quarter 2013. The decrease between quarters was primarily due to lower realizations and sales volumes for crude oil, and higher depreciation and operating expenses. Foreign currency effects increased earnings by $344 million in the 2014 quarter, compared with a decrease of $188 million a year earlier.

The average sales price for crude oil and natural gas liquids in third quarter 2014 was $93 per barrel, down from $104 a year earlier. The average price of natural gas was $5.73 per thousand cubic feet, compared with $5.88 in last year’s third quarter.

Net oil-equivalent production of 1.89 million barrels per day in third quarter 2014 was down 39,000 barrels per day, or 2 percent, from a year ago. Production increases from project ramp-ups in Argentina, Brazil and Nigeria and improved reliability at Tengizchevroil were more than offset by normal field declines, production entitlement effects in several locations and the effect of asset sales. The net liquids component of oil-equivalent production decreased 3 percent to 1.24 million barrels per day, while net natural gas production increased 1 percent to 3.94 billion cubic feet per day.

Cash flow from operations in the first nine months of 2014 was $25.0 billion, compared with $24.6 billion in the corresponding 2013 period.

Capital and exploratory expenditures in the first nine months of 2014 were $29.0 billion, compared with $28.9 billion in the corresponding 2013 period. The amounts included $2.4 billion in 2014 and $1.8 billion in 2013 for the company’s share of expenditures by affiliates, which did not require cash outlays by the company. Expenditures for upstream represented 93 percent of the company wide total in the first nine months of 2014.