USA: Chevron Expects Higher Profit in Q4

Chevron Expects Q4 Higher Profit

Chevron Corporation reported in its interim update that earnings for the fourth quarter 2012 are expected to be notably higher than third quarter 2012.

Upstream results are projected to be higher between sequential quarters, reflecting increased gains on asset transactions and higher liftings. Downstream earnings in the fourth quarter are also expected to be higher, largely reflecting a positive swing in timing effects, despite a sharp decline in industry refining margins.

Basis for Comparison in Interim Update

This interim update contains certain industry and company operating data for the fourth quarter 2012.

The production volumes, realizations, margins and certain other items in the report are based on a portion of the quarter and are not necessarily indicative of Chevron’s full quarterly results to be reported on February 1, 2013.

UPSTREAM

U.S. net oil-equivalent production increased 39,000 barrels per day during the first two months of the fourth quarter, reflecting recovery from the impacts of Hurricane Isaac and an increase in production associated with recently acquired acreage in the Permian Basin. International net oil-equivalent production during the first two months of the fourth quarter increased 107,000 barrels per day, mainly due to the absence of planned maintenance in Kazakhstan and the United Kingdom.

International upstream earnings in the fourth quarter are expected to include a gain of approximately $1.4 billion from a previously announced asset exchange in Australia, compared to a gain of $600 million in the third quarter associated with the sale of an equity interest in the Wheatstone project.

U.S. crude oil realizations increased $0.27, to $97.61 per barrel during the first two months of the fourth quarter, consistent with the typical monthly lag on pricing in the Gulf of Mexico. International liquids realizations increased $1.86, to $100.06 per barrel. U.S. natural gas realizations increased $0.51 to $3.14 per thousand cubic feet, while international natural gas realizations decreased $0.09 to $5.94 per thousand cubic feet during the first two months of the fourth quarter.

The company’s general guidance for the quarterly net after-tax charges related to corporate and other activities is between $300 million and $400 million. Due to the potential for non-ratable accruals related to income taxes, pension settlements, environmental and other matters, actual results may significantly differ from the guidance range. Total net charges for the fourth quarter are expected to be notably higher than the general guidance range.

[mappress]
LNG World News Staff, January 11, 2013