USA: Chevron’s First Quarter Earnings Drop to $6.2 Billion

Chevron Corporation reported earnings of $6.2 billion ($3.18 per share – diluted) for the first quarter 2013, compared with $6.5 billion ($3.27 per share – diluted) in the 2012 first quarter.

Sales and other operating revenues in the first quarter 2013 were $54 billion, down from $59 billion in the year-ago period, mainly due to lower prices for crude oil.

“Our first quarter earnings were strong,” said Chairman and CEO John Watson. “Our consistent financial performance has enabled us to significantly increase the dividend again, and fund major development projects that are the foundation of the company’s future growth in production, earnings and cash flows.”

“Our key development projects remain on track,” Watson added. “Construction is progressing well on the Gorgon and Wheatstone LNG projects in Australia. Important milestones have been reached recently for our Jack/St. Malo and Big Foot deepwater projects in the Gulf of Mexico, and both remain on schedule for start-up in 2014.”

Other recent upstream milestones include:

• Australia – Signed binding long-term Sales and Purchase Agreements with Chubu Electric Power Company for Wheatstone LNG. More than 80 percent of Chevron’s equity LNG offtake from Wheatstone is covered under long-term agreements.

• Australia – Reached agreement to acquire interests in two onshore natural gas blocks in the Cooper Basin.

• Australia – Announced a natural gas discovery, Elfin-1, in the Carnarvon Basin in 50 percent-owned Block WA-268-P.

• Republic of the Congo – Reached final investment decision on the deepwater Moho Nord joint development.

• United States – Announced a crude oil discovery at the Coronado prospect in the deepwater Gulf of Mexico.

• United States – Announced a successful production test of a St. Malo well in the deepwater Gulf of Mexico.

The company’s Board of Directors approved an 11.1 percent increase in the quarterly dividend, to $1.00 per share, payable in June 2013. The company purchased $1.25 billion of its common stock in first quarter 2013 under its share repurchase program.

UPSTREAM

Worldwide net oil-equivalent production was 2.65 million barrels per day in the first quarter 2013, up from 2.63 million barrels per day in the 2012 first quarter. Production increases from project ramp-ups in the United States and Nigeria were largely offset by normal field declines.

U.S. upstream earnings of $1.13 billion in the first quarter 2013 were down $397 million from a year earlier. The decrease was primarily due to lower crude oil realizations and higher operating expenses.

The company’s average sales price per barrel of crude oil and natural gas liquids was $94 in the first quarter 2013, down from $102 a year ago. The average sales price of natural gas was $3.11 per thousand cubic feet, compared with $2.48 in last year’s first quarter.

Net oil-equivalent production of 664,000 barrels per day in the first quarter 2013 increased 13,000 barrels per day, or 2 percent, from a year earlier. The increase in production was primarily due to further ramp-up of projects in the Gulf of Mexico, the Marcellus Shale in western Pennsylvania and the recently acquired Delaware Basin properties in New Mexico, partially offset by normal field declines. The net liquids component of oil-equivalent production was largely unchanged in the 2013 first quarter at 455,000 barrels per day, while net natural gas production increased 7 percent to 1.26 billion cubic feet per day.

International Upstream

International upstream earnings of $4.8 billion increased $142 million from the first quarter 2012. Lower crude oil production and realizations were partially offset by favorable tax items and lower exploration expenses. Foreign currency effects increased earnings by $172 million, compared with a decrease of $208 million a year earlier.

The average sales price for crude oil and natural gas liquids in the first quarter 2013 was $102 per barrel, compared with $110 a year earlier. The average price of natural gas was $6.07 per thousand cubic feet, up from $5.88 in last year’s first quarter.

Net oil-equivalent production of 1.98 million barrels per day in the first quarter 2013 was unchanged from a year ago. Production increases from project ramp-ups in Nigeria and improved operational efficiency at Tengizchevroil were largely offset by the continued shut-in of the Frade Field in Brazil, and normal field declines. The net liquids component of oil-equivalent production decreased 2 percent to 1.31 million barrels per day, while net natural gas production increased 5 percent to 4.05 billion cubic feet per day.

Full Results

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Press Release, April 26, 2013