Chevron Corporation recorded a significant increase in its quarterly earnings and revenues boosted by tax benefits as well as higher oil prices.
Chevron on Friday reported earnings of $3.1 billion for fourth quarter 2017, compared with $415 million in the 2016 fourth quarter.
Included in the quarter were non-cash provisional tax benefits of $2.02 billion related to U.S. tax reform and a non-cash charge of $190 million related to a former mining asset. Foreign currency effects decreased earnings in the 2017 fourth quarter by $96 million.
Sales and other operating revenues in fourth quarter 2017 were $36 billion, compared to $30 billion in the year-ago period.
Chevron’s full-year 2017 earnings were $9.2 billion compared with a loss of $497 million in 2016. Included in 2017 were non-cash provisional tax benefits of $2.02 billion related to U.S. tax reform, gains on asset sales of $1.44 billion, and impairments and other non-cash charges of $840 million. Foreign currency effects decreased earnings in 2017 by $446 million.
“Earnings and cash flow grew significantly in 2017,” said Chairman and CEO Michael Wirth.
“We achieved our objective of being cash flow positive through deliberate actions to reduce capital expenditures, lower our cost structure, start and ramp-up projects, and conclude planned asset sales. Higher commodity prices helped as well. These improvements give us the confidence to increase the dividend by $0.04 per share, which puts us on track to make 2018 the 31st consecutive year with an increase in annual dividend payout.”
Wirth continued: “Our net oil-equivalent production grew by 5 percent in 2017, including the effects of asset sales.
“Importantly, we expect that our 2018 production will continue to grow by 4 to 7 percent, driven primarily by Australian LNG and the acceleration of development activities in the Permian, where investment economics continue to improve.”
Chevron’s worldwide net oil-equivalent production was 2.74 million barrels per day in fourth quarter 2017, compared with 2.67 million barrels per day from a year ago. Net oil-equivalent production for the full year 2017 was 2.73 million barrels per day, compared with 2.59 million barrels per day from the prior year.
U.S. upstream operations earned $3.69 billion in fourth quarter 2017, compared with earnings of $121 million from a year earlier. The improvement reflected a benefit of $3.33 billion from U.S. tax reform along with higher crude oil realizations, partially offset by the absence of gains on fourth quarter 2016 asset sales.
The company’s average sales price per barrel of crude oil and natural gas liquids was $50 in fourth quarter 2017, up from $40 a year earlier. The average sales price of natural gas was $1.86 per thousand cubic feet in fourth quarter 2017, compared with $1.98in last year’s fourth quarter.
Capital and exploratory expenditures in 2017 were $18.8 billion, compared with $22.4 billion in 2016.
Offshore Energy Today Staff