Chevron’s profit soars on record production

Chevron, the US-based energy company and the operator of the giant Gorgon and Wheatstone LNG projects in Australia, reported a jump in profit in the second quarter of the year. 

The company reported a profit of $4.3 billion, which compares to $3.4 billion in the corresponding quarter last year.

Included in the current quarter were earnings of $740 million associated with the Anadarko merger termination fee and a noncash tax benefit of $180 million related to a reduction in the Alberta, Canada corporate income tax rate.

Sales and other operating revenues in the second quarter of 2019 were $36 billion, compared to $40 billion in the year-ago period.

“Second-quarter earnings and cash flow benefited from record quarterly production volumes and the receipt of the Anadarko merger termination fee, partially offset by the impact of lower oil and gas prices,” said Michael Wirth, Chevron’s chairman of the board and chief executive officer.

“Net oil-equivalent production was the highest in the company’s history, driven by continued growth in the Permian Basin and at Wheatstone in Australia,” he said.

Chevron’s net oil-equivalent production was 3.08 million barrels per day in the second quarter of 2019, an increase of 9 percent from 2.83 million barrels per day from a year ago.

U.S. upstream operations earned $896 million in the second quarter of 2019, compared with $838 million a year earlier. The increase was primarily due to higher crude oil production, partially offset by lower crude oil and natural gas realizations, higher operating and depreciation expenses primarily related to increased Permian activity, and higher tax items.

U.S. downstream operations earned $465 million in the second quarter of 2019, compared with earnings of $657 million a year earlier. The decrease was primarily due to lower margins on refined product sales and lower equity earnings from the 50 percent-owned Chevron Phillips Chemical Company.