Chevron Sees Quarterly Profit Slide

Chevron Corporation, a California based oil and gas exploration and production company,  today reported earnings of $5.4 billion ($2.77 per share – diluted) for the second quarter 2013, compared with $7.2 billion ($3.66 per share – diluted) in the 2012 second quarter.

Sales and other operating revenues in the second quarter 2013 were $55 billion, compared to $60 billion in the year-ago period.

“Our second quarter earnings were down from the very strong level of a year ago,” said Chairman and CEO John Watson. “The decrease was largely due to softer market conditions for crude oil and refined products. Earnings were also reduced as a result of repair and maintenance activities in our U.S. refineries.”

“We continue to advance our major capital projects. An important milestone was achieved in the second quarter with the loading of the first cargo of liquefied natural gas at the Angola LNG project, one of the largest energy projects on the African continent.” Watson continued, “This marks an important step in the development of our LNG business. Additional LNG growth is expected in the coming years from our Gorgon and Wheatstone projects in Australia.”

Upstream

Worldwide net oil-equivalent production was 2.58 million barrels per day in the second quarter 2013, down from 2.62 million barrels per day in the 2012 second quarter. Production increases from project ramp-ups in the United States and a project start-up in Angola were more than offset by normal field declines.

U.S. upstream earnings of $1.08 billion in the second quarter 2013 were down $235 million from a year earlier, due to higher operating and depreciation expenses, and lower crude oil production. Lower crude oil realizations were mostly offset by higher natural gas realizations.

The company’s average sales price per barrel of crude oil and natural gas liquids was $92 in the second quarter 2013, down from $97 a year ago. The average sales price of natural gas was $3.78 per thousand cubic feet, compared with $2.17 in last year’s second quarter.

Net oil-equivalent production of 659,000 barrels per day in the second quarter 2013 was unchanged from a year earlier. Production increases in the Marcellus Shale in western Pennsylvania, the Delaware Basin in New Mexico and at Perdido in the Gulf of Mexico were offset by normal field declines elsewhere. The net liquids component of oil-equivalent production decreased 1 percent in the 2013 second quarter to 455,000 barrels per day, while net natural gas production increased 3 percent to 1.23 billion cubic feet per day.

International upstream earnings of $3.87 billion decreased $436 million from the second quarter 2012. The decline between quarters was primarily due to lower volumes and realizations for crude oil, as well as higher operating expenses, partially offset by lower exploration expenses. Foreign currency effects increased earnings by $275 million in the 2013 quarter, compared with an increase of $219 million a year earlier.

The average sales price for crude oil and natural gas liquids in the 2013 second quarter was $94 per barrel, down from $99 a year earlier. The average price of natural gas was $5.93 per thousand cubic feet, compared with $6.10 in last year’s second quarter.

Net oil-equivalent production of 1.92 million barrels per day in the second quarter 2013 was down 42,000 barrels per day from a year ago. Production decreased primarily due to normal field declines, partially offset by a project start-up in Angola. The net liquids component of oil-equivalent production decreased 4 percent to 1.26 million barrels per day, while net natural gas production increased 2 percent to 3.99 billion cubic feet per day.

Capex

Capital and exploratory expenditures in the first six months of 2013 were $18.3 billion, compared with $14.2 billion in the corresponding 2012 period. The amounts included $1.1 billion in 2013 and $827 million in 2012 for the company’s share of expenditures by affiliates, which did not require cash outlays by the company. Also included were amounts related to the acquisition of additional shale acreage in several locations. Expenditures for upstream represented 92 percent of the companywide total in the first six months of 2013.

 August 2, 2013

 

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