Chevron Posts $1.5 billion in Second-Quarter Earnings

Fri, Aug 11, 2017 | By publisher


Oil & Gas

|  By Anayo Ezugwu  |  Aug 11, 2017 @ 1:00 GMT  |

CHEVRON Corporation has announced second-quarter earnings of $1.5 billion. The quarter earnings included impairments and other non-cash charges totalling $430 million. The corporation stated that foreign currency effects increased earnings in the 2017 second quarter by $3 million, compared with an increase of $279 million a year earlier. Sales and other operating revenues in second quarter 2017 were $33 billion, compared to $28 billion in the year-ago period.

John Watson, chairman and chief executive officer, Chevron, said the second quarter results improved substantially from a year ago and year-to-date net cash flow is positive. “We’re delivering higher production with lower capital and operatingh expenditures. Oil and gas production was up 10 percent in the second quarter from a year ago. Our Gorgon LNG Project in Australia closed the quarter running above nameplate capacity and we had record production from our shale and tight resource in the Permian Basin.

“First production from the Wheatstone LNG Project is expected next month. Operating expenses were down 10 percent and capital spending was down 25 percent in the first six months of the year versus 2016,” Watson said.

Chevron’s second-quarter worldwide net production was 2.78 million barrels per day up from 2.53 million barrels per day in second-quarter of 2016. Production gains were noted from major capital projects, base business, and shale and tight properties, and lower maintenance-related downtime. The gains were partially offset by normal field declines, production entitlement effects in several locations, and the effect of 2016 asset sales.

The report noted that the firm’s international upstream operations during the second quarter earned $955 million, compared with a loss of $1.35 billion in second-quarter 2016. Chevron said the increase in earnings reflected lower impairment charges, partially offset by higher depreciation expenses from increased production. The improvement also included lower tax items, higher natural gas sales volumes, higher crude oil realizations and volumes, and lower operating expenses

Chevron’s international production during the second quarter was 2.08 million barrels per day, up 233,000 barrels per day from a year earlier. Production increases from major capital projects and base business in multiple areas and lower maintenance-related downtime were partially offset by production entitlement effects in several locations and normal field declines, the firm said. Net liquids production increased 3 percent year-over-year to 1.22 million barrels per day, while net gas production increased 30 percent year-over-year to 5.14 barrels per day.

The firm’s US upstream operations incurred a second-quarter loss of $102 million compared with a loss of $1.11 billion a year earlier. The improvement reflected lower impairment charges, higher oil and gas realizations, higher gains on asset sales, and lower operating expenses. US net production of 701,000 barrels per day for the firm during the second quarter was up 19,000 barrels per day from a year earlier.

Production increases from shale and tight properties in the Permian basin in Texas and New Mexico, base business, and the Jack-St. Malo major capital project in the Gulf of Mexico were partially offset by the effect of 2016 asset sales and normal field declines. Net liquids production increased 6 percent to 530,000 barrels per day, while net gas production fell 6 percent to 1.03 billion cubic feet per day primarily as a result of 2016 asset sales.

Chevron’s international downstream operations in the second quarter earned $561 million, down from $741 million a year earlier. The firm said the decline was primarily due to the absence of second-quarter gains on asset sales. Higher margins on refined product sales partially offset the decrease. International refinery crude input for the firm of 726,000 barrels per day in the second quarter was down 38,000 barrels per day from the year-ago period mainly due to crude unit maintenance at the Star Petroleum Refining Co. in Thailand and a major planned turnaround at the company’s refinery in Cape Town.

The firm’s US downstream operations in the second quarter earned $634 million, up from $537 million a year earlier. The rise was primarily due to higher margins on refined product sales and lower operating expenses. Partially offsetting the increases were the absence of second-quarter asset sale gains and higher tax items. US refinery crude input in the second quarter decreased 3 percent from the year-ago period to 928,000 barrels per day.

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