Chevron earnings down to USD 4.5 bln

Chevron Corporation today reported earnings of $4.5 billion ($2.36 per share – diluted) for the first quarter 2014, compared with $6.2 billion ($3.18 per share – diluted) in the 2013 first quarter. Sales and other operating revenues in the first quarter 2014 were $51 billion, compared to $54 billion in the year-ago period.

“Our first quarter earnings were down from a year ago,” said Chairman and CEO John Watson, “Primarily due to lower prices and volumes for crude oil. Crude prices were tempered by global economic factors, while our current year production volumes were affected by weather-related, unplanned downtime, particularly in Kazakhstan.”

“We continue to advance our key development projects,” Watson added, “and we are anticipating production growth in 2015 and beyond as a result of these investments. Significant progress has been made on the construction of our Gorgon and Wheatstone projects in Australia. Our Jack/St. Malo and Big Foot projects in the Gulf of Mexico are also progressing, with first production planned for late 2014 and mid-2015, respectively. Our financial strength continues to allow us to fund these important growth projects which are expected to support a 20 percent increase in production by 2017, and to grow shareholder distributions.”

Recent upstream milestones include:

• Argentina – Signed additional agreements to continue the development of the Loma Campana Project in the Vaca Muerta Shale and to begin exploration in the Narambuena area of the Neuquén Basin;

• Australia – Received and installed the final two Gorgon gas turbine generators. All five of the generators have now been installed in preparation for LNG plant start-up in mid-2015;

• Australia – Commenced the development well drilling campaign for the Wheatstone Project;

• Azerbaijan – Achieved first production from the Chirag Oil Project in the Caspian Sea;

• Myanmar – Announced the acquisition of offshore shallow water acreage.

“In the downstream, mechanical completion of the premium lubricants base-oil facility in Pascagoula, Mississippi, was achieved in April and ramp-up to full production is planned for mid-year. In addition, Chevron Phillips Chemical Company LLC, the company’s 50 percent-owned affiliate, announced the start of construction of its U.S. Gulf Coast Petrochemicals Project.”

The company’s Board of Directors approved a 7 percent increase in the quarterly dividend to $1.07 per share, payable in June 2014. The company purchased $1.25 billion of its common stock in first quarter 2014 under its share repurchase program.

UPSTREAM

Worldwide net oil-equivalent production was 2.59 million barrels per day in the first quarter 2014, down from 2.65 million barrels per day in the 2013 first quarter. Production increases from project ramp-ups in Nigeria, Angola and the United States were more than offset by normal field declines and weather-related, unplanned downtime, particularly in Kazakhstan.

U.S. upstream earnings of $912 million in the first quarter 2014 were down $220 million from a year earlier due to lower crude oil production and realizations and higher operating and depreciation expenses, partially offset by higher natural gas realizations.

The company’s average sales price per barrel of crude oil and natural gas liquids was $91 in the first quarter 2014, down from $94 a year ago. The average sales price of natural gas was $4.77 per thousand cubic feet, compared with $3.11 in last year’s first quarter.

Net oil-equivalent production of 640,000 barrels per day in the first quarter 2014 was down 24,000 barrels per day, or 4 percent, from a year earlier. Production increases in the Marcellus Shale in western Pennsylvania and the Delaware Basin in New Mexico were more than offset by normal field declines. The net liquids component of oil-equivalent production decreased 4 percent in the 2014 first quarter to 438,000 barrels per day, while net natural gas production decreased 3 percent to 1.21 billion cubic feet per day.

International upstream earnings of $3.4 billion decreased $1.4 billion from the first quarter 2013. The decrease between quarters was primarily due to lower crude oil production and realizations and higher tax, depreciation and exploration expenses. Foreign currency effects decreased earnings by $53 million in the 2014 quarter, compared with an increase of $172 million a year earlier.

The average sales price for crude oil and natural gas liquids in the first quarter 2014 was $99 per barrel, down from $102 a year earlier. The average price of natural gas was $6.02 per thousand cubic feet, compared with $6.07 in last year’s first quarter.

Net oil-equivalent production of 1.95 million barrels per day in the first quarter 2014 was down 33,000 barrels per day, or 2 percent, from a year ago. Production increases due to project ramp-ups in Nigeria and Angola were more than offset by normal field declines and weather-related, unplanned downtime, particularly in Kazakhstan. The net liquids component of oil-equivalent production decreased 2 percent to 1.28 million barrels per day, while net natural gas production was essentially unchanged at 4.04 billion cubic feet per day.

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Press Release, May 02, 2014