USA: Chevron 3Q Profit Soars on High Oil Prices and Asset Sales

Chevron Corporation today reported earnings of $7.8 billion ($3.92 per share – diluted) for the third quarter 2011, compared with $3.8 billion ($1.87 per share – diluted) in the 2010 third quarter.

Sales and other operating revenues in the third quarter 2011 were $61 billion, up from $48 billion in the year-ago period, mainly due to higher prices for crude oil and refined products.

“We had another successful quarter,” said Chairman and CEO John Watson, “with both strong earnings and cash flow. Current quarter earnings for our upstream operations benefited from higher crude oil prices on world markets. At the same  time, gains on asset sales and improved margins for refined petroleum products contributed to increased earnings for our downstream businesses.”

Watson commented, “We continue to progress our major capital projects. The recent decision to develop the Wheatstone LNG project represents a major milestone in the company’s efforts to commercialize our significant natural gas resource base in Australia. The Wheatstone and Gorgon LNG projects are expected to provide substantial new energy supplies to meet growing demand in the Asia-Pacific region.”

Additional upstream achievements in recent months include:

•  Australia – Signed binding Sales and Purchase Agreement with Kyushu Electric for Wheatstone LNG and for Kyushu Electric to acquire an equity share in the field licenses and LNG facilities.
•  Thailand – Announced first gas at the Platong Gas II natural gas development in the Gulf of Thailand.
• United Kingdom –Reached final investment decision for the Clair Ridge project in the North Sea.
• United States – Announced a new oil discovery at the Moccasin prospect in the deepwater Gulf of Mexico.
•  United States – Reached final investment decision for the Tubular Bells project in the deepwater Gulf of Mexico.

“In the downstream business, we reached a major milestone in our efforts to streamline our asset portfolio with completion of the sale of our refining and marketing assets in the United Kingdom and Ireland, including the Pembroke Refinery,”  Watson added. The company also completed the sale of certain other fuels-marketing and aviation businesses in the Caribbean and South America in the third quarter 2011.

Earlier this week, the company announced an increase in the quarterly dividend of 3.8 percent to $0.81 per share. This follows an increase of 8.3 percent announced in the second quarter 2011. The company purchased $1.25 billion of its common stock in the third quarter 2011 under its share repurchase program.

Worldwide net oil-equivalent production was 2.60 million barrels per day in the third quarter 2011, down from 2.74 million barrels per day in the 2010 third quarter. Production increases from project ramp-ups in Canada, the United States  and Brazil and new volumes stemming from the acquisition of Atlas Energy, Inc. were more than offset by maintenance-related downtime, normal field declines and an approximate 39,000 barrels per day negative effect of higher prices on volumes produced under cost-recovery and variable-royalty contract provisions.

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Source: , October 28, 2011