Chevron Corporation (NYSE: CVX) today reported earnings of $2.7
billion ($1.41 per share – diluted) for first quarter 2017,
compared with a loss of $725 million ($0.39 per share – diluted) in
the 2016 first quarter. Included in the quarter was a gain of
approximately $600 million from the sale of an upstream asset.
Foreign currency effects decreased earnings in first quarter 2017
by $241 million, compared with a decrease of $319 million a year
earlier.
Sales and other operating revenues in first quarter 2017 were
$32 billion, compared to $23 billion in the year-ago period.
Earnings Summary
Three MonthsEnded March
31
Millions of dollars
2017
2016 Earnings by business segment Upstream $
1,517 $ (1,459 ) Downstream 926 735 All Other
239 (1 )
Total
(1)(2) $ 2,682
$ (725 ) (1) Includes foreign
currency effects $ (241 ) $ (319 ) (2) Net income (loss)
attributable to Chevron Corporation (See Attachment 1)
“First quarter earnings and cash flow improved significantly
from a year ago,” said Chairman and CEO John Watson. “We benefitted
from increasing crude oil prices and ongoing efficiencies being
implemented across the company.”
“We continue to make good progress on reducing our spend,”
Watson added. “Our operating expenses were reduced by about 14
percent from first quarter 2016 and our capital spending declined
over 30 percent from a year ago. We started up several new projects
and have all three trains at Gorgon online. We also progressed our
asset sales program. The combination of these actions contributed
to a cash positive first quarter.”
“Overall net oil-equivalent production in the first quarter
increased 3 percent compared to the 2016 full year and we are on
track to meet the 4-9 percent growth goal for 2017 before the
effect of asset sales,” Watson added.
Recent company milestones include:
- Angola – Commenced production from the
main production facility of the Mafumeira Sul Project.
- Australia – Achieved first LNG from
Train 3 at the Gorgon Project.
- Bangladesh – Announced agreement to
sell upstream operations.
- Canada – Signed agreement to sell
refining and marketing assets in British Columbia and Alberta.
- Indonesia – Completed the sale of the
geothermal business.
- South Africa and Botswana – Signed
agreement to sell refining, fuels and lubricants assets.
UPSTREAM
Worldwide net oil-equivalent production was 2.68 million barrels
per day in first quarter 2017, compared with 2.67 million barrels
per day in the 2016 first quarter. Production increases from major
capital projects and base business were largely offset by
production entitlement effects in several locations, normal field
declines and the impact of asset sales.
U.S. Upstream
Three MonthsEnded March
31
Millions of Dollars
2017
2016 Earnings $ 80 $
(850)
U.S. upstream operations earned $80 million in first quarter
2017, compared with a loss of $850 million from a year earlier. The
increase was primarily due to higher crude oil realizations and
lower depreciation and operating expenses.
The company’s average sales price per barrel of crude oil and
natural gas liquids was $45 in first quarter 2017, up from $26 a
year ago. The average sales price of natural gas was $2.39 per
thousand cubic feet, compared with $1.32 in last year’s first
quarter.
Net oil-equivalent production of 672,000 barrels per day in
first quarter 2017 was down 29,000 barrels per day, or 4 percent,
from a year earlier. Production increases from base business in the
Gulf of Mexico, shale and tight properties in the Permian Basin in
Texas and New Mexico, and the Jack/St. Malo major capital project
were more than offset by the impact of asset sales of 68,000
barrels per day, and normal field declines. The net liquids
component of oil-equivalent production increased 3 percent in first
quarter 2017 to 504,000 barrels per day, while net natural gas
production decreased 21 percent to 1.01 billion cubic feet per
day.
International Upstream
Three MonthsEnded March
31
Millions of Dollars
2017
2016 Earnings* $ 1,437
$ (609 ) *Includes foreign currency effects $ (274 )
$ (298 )
International upstream operations earned $1.4 billion in first
quarter 2017, compared with a loss of $609 million a year earlier.
The increase was due to higher crude oil realizations, a gain of
approximately $600 million from the sale of the Indonesia
geothermal business, higher natural gas sale volumes and lower
operating expenses, partially offset by higher depreciation expense
and higher tax items. Foreign currency effects decreased earnings
by $274 million in first quarter 2017, compared with a decrease of
$298 million a year earlier.
The average sales price for crude oil and natural gas liquids in
first quarter 2017 was $49 per barrel, up from $29 a year earlier.
The average price of natural gas was $4.36 per thousand cubic feet,
compared with $3.91 in last year’s first quarter.
Net oil-equivalent production of 2.00 million barrels per day in
first quarter 2017 increased 39,000 barrels per day, or 2 percent,
from a year ago. Production increases from major capital projects
and base business were partially offset by production entitlement
effects in several locations, normal field declines and the effects
of civil unrest in Nigeria. The net liquids component of
oil-equivalent production decreased 7 percent to 1.20 million
barrels per day in first quarter 2017, while net natural gas
production increased 19 percent to 4.80 billion cubic feet per
day.
DOWNSTREAM
U.S. Downstream
Three MonthsEnded March
31
Millions of Dollars
2017
2016 Earnings $ 469 $ 247
U.S. downstream operations earned $469 million in first quarter
2017, compared with earnings of $247 million a year earlier. The
increase was primarily due to the absence of a first quarter 2016
asset impairment, lower operating expenses as a result of decreased
planned turnaround activity, and higher margins on refined product
sales.
Refinery crude oil input in first quarter 2017 decreased 5
percent to 912,000 barrels per day from the year-ago period.
Refined product sales of 1.15 million barrels per day decreased 5
percent from first quarter 2016. Branded gasoline sales of 511,000
barrels per day were essentially unchanged from the 2016 period.
Both refinery crude oil input and refined product sales were down
due to divestment of the Hawaii refining and marketing assets.
International Downstream
Three MonthsEnded March
31
Millions of Dollars
2017
2016 Earnings* $ 457
$ 488 *Includes foreign currency effects $ (46 )
$ (48 )
International downstream operations earned $457 million in first
quarter 2017, compared with $488 million a year earlier. The
decrease was primarily due to lower margins on refined product
sales. Foreign currency effects decreased earnings by $46 million
in first quarter 2017, compared with a decrease of $48 million a
year earlier.
Refinery crude oil input of 753,000 barrels per day in first
quarter 2017 decreased 42,000 barrels per day from the year-ago
period, mainly due to planned turnaround activity at the company’s
refinery in Cape Town, South Africa.
Refined product sales of 1.45 million barrels per day in first
quarter 2017 increased 1 percent from the year-ago period due to
higher gas oil and fuel oil sales, partially offset by lower
gasoline sales.
ALL OTHER
Three MonthsEnded March
31
Millions of Dollars
2017
2016 Earnings/(Charges)* $ 239
$ (1 ) *Includes foreign currency effects $ 79
$ 27
All Other consists of worldwide cash management and debt
financing activities, corporate administrative functions, insurance
operations, real estate activities and technology companies.
Net earnings in first quarter 2017 were $239 million, compared
with net charges of $1 million in the year-ago period. The change
between periods was mainly due to lower employee expenses and
favorable corporate tax items. Foreign currency effects increased
earnings by $79 million in the first three months of 2017, compared
with a benefit of $27 million in the 2016 period.
CASH FLOW FROM OPERATIONS
Cash flow from operations in first quarter 2017 was $3.9
billion, compared with $1.1 billion in the corresponding 2016
period. Excluding working capital effects, cash flow from
operations in first quarter 2017 was $4.8 billion, compared with
$2.1 billion in the corresponding 2016 period.
CAPITAL AND EXPLORATORY EXPENDITURES
Capital and exploratory expenditures in first quarter 2017 were
$4.4 billion, compared with $6.5 billion in the corresponding 2016
period. The amounts included $939 million in first quarter 2017 and
$791 million in the corresponding 2016 period for the company’s
share of expenditures by affiliates, which did not require cash
outlays by the company. Expenditures for upstream represented 90
percent of the companywide total in first quarter 2017.
NOTICE
Chevron’s discussion of first quarter 2017 earnings with
security analysts will take place on Friday, April 28, 2017, at
8:00 a.m. PDT. A webcast of the meeting will be available in a
listen-only mode to individual investors, media, and other
interested parties on Chevron’s Web site at www.chevron.com under the “Investors”
section. Additional financial and operating information will be
contained in the Earnings Supplement that will be available under
“Events and Presentations” in the “Investors” section on the Web
site.
CAUTIONARY STATEMENTS RELEVANT TO
FORWARD-LOOKING INFORMATION FOR THE PURPOSE OF “SAFE HARBOR”
PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995
This press release contains forward-looking statements relating
to Chevron’s operations that are based on management’s current
expectations, estimates and projections about the petroleum,
chemicals and other energy-related industries. Words or phrases
such as “anticipates,” “expects,” “intends,” “plans,” “targets,”
“forecasts,” “projects,” “believes,” “seeks,” “schedules,”
“estimates,” “positions,” “pursues,” “may,” “could,” “should,”
“budgets,” “outlook,” “focus,” “on schedule,” “on track,” “goals,”
“objectives,” “strategies” and similar expressions are intended to
identify such forward-looking statements. These statements are not
guarantees of future performance and are subject to certain risks,
uncertainties and other factors, many of which are beyond the
company’s control and are difficult to predict. Therefore, actual
outcomes and results may differ materially from what is expressed
or forecasted in such forward-looking statements. The reader should
not place undue reliance on these forward-looking statements, which
speak only as of the date of this press release. Unless legally
required, Chevron undertakes no obligation to update publicly any
forward-looking statements, whether as a result of new information,
future events or otherwise.
Among the important factors that could cause actual results to
differ materially from those in the forward-looking statements are:
changing crude oil and natural gas prices; changing refining,
marketing and chemicals margins; the company's ability to realize
anticipated cost savings and expenditure reductions; actions of
competitors or regulators; timing of exploration expenses; timing
of crude oil liftings; the competitiveness of alternate-energy
sources or product substitutes; technological developments; the
results of operations and financial condition of the company's
suppliers, vendors, partners and equity affiliates, particularly
during extended periods of low prices for crude oil and natural
gas; the inability or failure of the company’s joint-venture
partners to fund their share of operations and development
activities; the potential failure to achieve expected net
production from existing and future crude oil and natural gas
development projects; potential delays in the development,
construction or start-up of planned projects; the potential
disruption or interruption of the company’s operations due to war,
accidents, political events, civil unrest, severe weather, cyber
threats and terrorist acts, crude oil production quotas or other
actions that might be imposed by the Organization of Petroleum
Exporting Countries, or other natural or human causes beyond its
control; changing economic, regulatory and political environments
in the various countries in which the company operates; general
domestic and international economic and political conditions; the
potential liability for remedial actions or assessments under
existing or future environmental regulations and litigation;
significant operational, investment or product changes required by
existing or future environmental statutes and regulations,
including international agreements and national or regional
legislation and regulatory measures to limit or reduce greenhouse
gas emissions; the potential liability resulting from other pending
or future litigation; the company’s future acquisition or
disposition of assets or shares or the delay or failure of such
transactions to close based on required closing conditions; the
potential for gains and losses from asset dispositions or
impairments; government-mandated sales, divestitures,
recapitalizations, industry-specific taxes, changes in fiscal terms
or restrictions on scope of company operations; foreign currency
movements compared with the U.S. dollar; material reductions in
corporate liquidity and access to debt markets; the effects of
changed accounting rules under generally accepted accounting
principles promulgated by rule-setting bodies; the company's
ability to identify and mitigate the risks and hazards inherent in
operating in the global energy industry; and the factors set forth
under the heading “Risk Factors” on pages 20 through 22 of the
company’s 2016 Annual Report on Form 10-K. Other unpredictable or
unknown factors not discussed in this press release could also have
material adverse effects on forward-looking statements.
Attachment 1 CHEVRON CORPORATION - FINANCIAL
REVIEW (Millions of Dollars, Except Per-Share Amounts)
CONSOLIDATED
STATEMENT OF INCOME
(unaudited)
Three Months Ended March 31 REVENUES
AND OTHER INCOME 2017 2016 Sales and other
operating revenues *
$ 31,524 $ 23,070 Income from
equity affiliates
1,150 576 Other income (loss)
747
(93 )
Total Revenues and Other Income 33,421 23,553
COSTS AND OTHER DEDUCTIONS Purchased crude oil and
products
17,506 11,225 Operating, selling, general and
administrative expenses
5,526 6,402 Exploration expenses
144 370 Depreciation, depletion and amortization
4,194 4,403 Taxes other than on income *
2,871 2,864
Interest and debt expense
51 -
Total Costs and
Other Deductions 30,292 25,264
Income (Loss)
Before Income Tax Expense 3,129 (1,711 ) Income tax
expense (benefit)
430 (1,004 )
Net Income (Loss)
2,699 (707 ) Less: Net income attributable to noncontrolling
interests
17 18
NET INCOME (LOSS) ATTRIBUTABLE TO
CHEVRON CORPORATION
$ 2,682 $ (725 )
PER-SHARE OF COMMON
STOCK Net Income (Loss) Attributable to Chevron
Corporation - Basic $ 1.43 $ (0.39 )
-
Diluted $ 1.41 $ (0.39 )
Dividends
$ 1.08 $ 1.07
Weighted Average Number of
Shares Outstanding (000's) - Basic 1,879,372
1,869,775
- Diluted 1,895,393 1,869,775 *
Includes excise, value-added and similar taxes.
$
1,677 $ 1,652
Attachment 2 CHEVRON CORPORATION - FINANCIAL REVIEW
(Millions of Dollars) (unaudited)
EARNINGS BY MAJOR
OPERATING AREA
Three Months Ended March 31 2017 2016
Upstream United States
$ 80 $ (850 ) International
1,437 (609 ) Total Upstream
1,517
(1,459 ) Downstream United States
469 247 International
457 488 Total Downstream
926 735
All Other (1)
239 (1 )
Total (2)
$ 2,682 $ (725 )
SELECTED BALANCE
SHEET ACCOUNT DATA
Mar. 31,2017
Dec. 31,2016
Cash and Cash Equivalents
$ 6,983 $ 6,988 Marketable
Securities
$ 11 $ 13 Total Assets
$
259,111 $ 260,078 Total Debt
$ 45,256 $ 46,126
Total Chevron Corporation Stockholders' Equity
$
146,592 $ 145,556
Three Months Ended March
31
CASH FLOW FROM
OPERATIONS
2017 2016 Net Cash Provided by Operating Activities
$ 3,879 $ 1,141 Net Increase in Operating Working
Capital
$ (957 ) $ (993 ) Net Cash Provided by
Operating Activities Excluding Working Capital
$
4,836 $ 2,134
Three Months Ended March
31
CAPITAL AND
EXPLORATORY EXPENDITURES (3)
2017 2016 United States Upstream
$
1,051 $ 1,276 Downstream
321 421 Other
34
22
Total United States 1,406 1,719
International Upstream
2,916 4,690 Downstream
69 59 Other
1 1
Total
International 2,986 4,750
Worldwide
$ 4,392 $ 6,469
(1) Includes worldwide cash management and
debt financing activities, corporate administrative functions,
insurance operations, real estate activities, and technology
companies.
(2) Net Income (Loss) Attributable to
Chevron Corporation (See Attachment 1)
(3) Includes interest in affiliates: United States
$
177 $ 336 International
762 455 Total
$ 939 $ 791
Attachment
3 CHEVRON CORPORATION - FINANCIAL REVIEW
Three Months
OPERATING
STATISTICS (1)
Ended March 31 NET LIQUIDS PRODUCTION (MB/D):
(2) 2017 2016 United
States
504 490 International
1,204 1,291
Worldwide 1,708 1,781
NET NATURAL GAS
PRODUCTION (MMCF/D): (3) United States
1,006
1,266 International
4,801 4,044
Worldwide
5,807 5,310
TOTAL NET OIL-EQUIVALENT PRODUCTION
(MB/D): (4) United States
672 701 International
2,004 1,965
Worldwide 2,676 2,666
SALES OF NATURAL GAS (MMCF/D): United States
3,142
3,808 International
4,933 4,558
Worldwide
8,075 8,366
SALES OF NATURAL GAS LIQUIDS
(MB/D): United States
135 129 International
88 88
Worldwide 223 217
SALES OF REFINED PRODUCTS
(MB/D): United States
1,153 1,210 International (5)
1,445 1,436
Worldwide 2,598 2,646
REFINERY INPUT (MB/D): United States
912 957
International
753 795
Worldwide 1,665 1,752
(1) Includes interest in affiliates. (2) Includes net
production of synthetic oil: Canada
51 49 Venezuela
Affiliate
29 27 (3) Includes natural gas consumed in
operations (MMCF/D): United States
37 67 International
512 428
(4) Oil-equivalent production is the sum
of net liquids production, net natural gas production and synthetic
production. The oil-equivalent gas conversion ratio is 6,000 cubic
feet of natural gas = 1 barrel of crude oil.
(5) Includes share of affiliate sales (MB/D):
361 369
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Chevron CorporationMelissa Ritchie, 925-842-0455
Chevron (NYSE:CVX)
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