Oil major Chevron saw its first quarter 2019 earnings slip when compared to the prior-year period due to lower oil prices and weaker downstream margins.
Chevron on Friday reported earnings of $2.6 billion for the first quarter 2019, compared with $3.6 billion in the first quarter of 2018.
Foreign currency effects decreased earnings in the 2019 first quarter by $137 million.
Sales and other operating revenues in first quarter 2019 were $34 billion, compared to $36 billion in the year-ago period.
Michael Wirth, Chevron’s chairman of the board and chief executive officer, said: “Upstream production volumes were up 7 percent from a year ago, primarily in the Permian Basin and at Wheatstone in Australia. The company’s net oil-equivalent production exceeded 3 million barrels per day for the second quarter in a row. First quarter earnings declined from a year ago, largely due to lower crude oil prices and weaker downstream and chemicals margins.”
Chevron’s worldwide net oil-equivalent production was 3.04 million barrels per day in first quarter 2019, an increase of 7 percent from 2.85 million barrels per day from a year ago.
U.S. upstream operations earned $748 million in first quarter 2019, compared with $648 million a year earlier. The increase was primarily due to higher crude oil production partially offset by lower crude oil and natural gas realizations.
The company’s average sales price per barrel of crude oil and natural gas liquids was $48 in first quarter 2019, down from $56 a year earlier. The average sales price of natural gas was $1.64 per thousand cubic feet in first quarter 2019, down from $2.02 in last year’s first quarter.
Net oil-equivalent production of 884,000 barrels per day in first quarter 2019 was up 151,000 barrels per day from a year earlier. Production increases from shale and tight properties in the Permian Basin in Texas and New Mexico, and major capital projects and base business in the Gulf of Mexico, were partially offset by normal field declines and the impact of asset sales.
Capital and exploratory expenditures in the first three months of 2019 were $4.7 billion, compared with $4.4 billion in the corresponding 2018 period.
It is worth mentioning that Chevron recently entered into a definitive agreement with Anadarko Petroleum Corporation to acquire all of the outstanding shares of Anadarko in a stock and cash transaction valued at $33 billion, or $65 per share.
However, the U.S. oil firm Occidental Petroleum has entered into a race with Chevron by also offering to buy Anadarko.
Anadarko said it would carefully review Oxy’s Wednesday bid and advised shareholders not to take action regarding the bid.
Offshore Energy Today Staff
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