Chevron Corporation (NYSE:CVX) today reported earnings of $1.5
billion ($0.77 per share – diluted) for second quarter 2017,
compared with a loss of $1.5 billion ($0.78 per share – diluted) in
the second quarter of 2016. Included in the quarter were
impairments and other non-cash charges totaling $430 million,
partially offset by gains on asset sales of $160 million. 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.
Earnings Summary
Three Months
Ended June 30
Six Months
Ended June 30
Millions of dollars
2017 2016
2017 2016 Earnings
by Business Segment Upstream $853 $(2,462 ) $2,370
$(3,921 ) Downstream 1,195 1,278 2,121 2,013 All Other (598
) (286 ) (359 ) (287 )
Total
(1)(2) $1,450 $(1,470
) $4,132 $(2,195 )
(1) Includes foreign currency effects $3 $279 $(238 ) $(40 ) (2)
Net income (loss) attributable to Chevron Corporation (See
Attachment 1)
“Second quarter results improved substantially from a year ago
and year-to-date net cash flow is positive,” said Chairman and CEO
John Watson. “We’re delivering higher production with lower capital
and operating expenditures.”
“Oil and gas production was up 10 percent in the second quarter
from a year ago,” Watson added. “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 commented.
UPSTREAM
Worldwide net oil-equivalent production was 2.78 million barrels
per day in second quarter 2017, compared with 2.53 million barrels
per day from a year ago. Production increases were noted from major
capital projects, base business, and shale and tight properties,
and lower maintenance-related downtime. These impacts were
partially offset by normal field declines, production entitlement
effects in several locations and the effect of 2016 asset
sales.
U.S. Upstream
Three Months
Ended June 30
Six Months
Ended June 30
Millions of dollars
2017 2016
2017 2016 Earnings
$(102 ) $(1,113 ) $(22 ) $(1,963 )
U.S. upstream operations incurred a loss of $102 million in
second quarter 2017 compared with a loss of $1.11 billion from a
year earlier. The improvement reflected lower impairment charges,
higher crude oil and natural gas realizations, higher gains on
asset sales, and lower operating expenses.
The company’s average sales price per barrel of crude oil and
natural gas liquids was $41 in second quarter 2017, up from $36 a
year earlier. The average sales price of natural gas was $2.32 per
thousand cubic feet in second quarter 2017, compared with $1.21 in
last year’s second quarter.
Net oil-equivalent production of 701,000 barrels per day in
second quarter 2017 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 were partially offset by the
effect of 2016 asset sales and normal field declines. The net
liquids component of oil-equivalent production in second quarter
2017 increased 6 percent to 530,000 barrels per day, while net
natural gas production decreased 6 percent to 1.03 billion cubic
feet per day primarily as a result of 2016 asset sales.
International Upstream
Three Months
Ended June 30
Six Months
Ended June 30
Millions of dollars
2017 2016
2017 2016
Earnings* $955 $(1,349 ) $2,392
$(1,958 ) *Includes foreign currency effects $(4 )
$329 $(278 ) $31
International upstream operations earned $955 million in second
quarter 2017 compared with a loss of $1.35 billion a year ago. 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. Foreign currency effects decreased earnings by
$4 million in the 2017 second quarter, compared with an increase of
$329 million a year earlier.
The average sales price for crude oil and natural gas liquids in
second quarter 2017 was $45 per barrel, up from $40 a year earlier.
The average price of natural gas was $4.39 per thousand cubic feet
in the quarter, compared with $3.93 in last year’s second
quarter.
Net oil-equivalent production of 2.08 million barrels per day in
second quarter 2017 was 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 net liquids component of
oil-equivalent production increased 3 percent to 1.22 million
barrels per day in the 2017 second quarter, while net natural gas
production increased 30 percent to 5.14 billion cubic feet per
day.
DOWNSTREAM
U.S. Downstream
Three Months
Ended June 30
Six Months
Ended June 30
Millions of dollars
2017 2016
2017 2016 Earnings $634 $537
$1,103 $784
U.S. downstream operations earned $634 million in second quarter
2017 compared with earnings of $537 million a year earlier. The
increase in earnings was primarily due to higher margins on refined
product sales and lower operating expenses. Partially offsetting
these effects were the absence of second quarter 2016 asset sale
gains and higher tax items.
Refinery crude oil input in second quarter 2017 decreased 3
percent from the year-ago period to 928,000 barrels per day.
Refined product sales of 1.24 million barrels per day decreased 2
percent from second quarter 2016. Branded gasoline sales of 542,000
barrels per day were essentially unchanged from the 2016 period.
Both refinery crude oil input and refined product sales were lower
due to divestment of the Hawaii refining and marketing assets in
fourth quarter 2016.
International Downstream
Three Months
Ended June 30
Six Months
Ended June 30
Millions of dollars
2017 2016
2017 2016 Earnings*
$561 $741 $1,018 $1,229
*Includes foreign currency effects $3 $(26 ) $(43 )
$(74 )
International downstream operations earned $561 million in
second quarter 2017 compared with $741 million a year earlier. The
decrease in earnings was primarily due to the absence of second
quarter 2016 gains on asset sales. Higher margins on refined
product sales partially offset the decrease in earnings. Foreign
currency effects increased earnings by $3 million compared with a
decrease of $26 million in last year’s second quarter.
Refinery crude oil input of 726,000 barrels per day in second
quarter 2017 decreased 38,000 barrels per day from the year-ago
period mainly due to crude unit maintenance at the Star Petroleum
Refining Company in Thailand and a major planned turnaround at the
company’s refinery in Cape Town, South Africa.
Total refined product sales of 1.45 million barrels per day in
second quarter 2017 were essentially unchanged from the year-ago
period.
ALL OTHER
Three Months
Ended June 30
Six MonthsEnded June 30
Millions of dollars
2017 2016
2017 2016 Net
Charges* $(598 ) $(286 ) $(359 ) $(287
) *Includes foreign currency effects $4 $(24 ) $83 $3
All Other consists of worldwide cash management and debt
financing activities, corporate administrative functions, insurance
operations, real estate activities and technology companies.
Net charges in second quarter 2017 were $598 million, compared
with $286 million a year earlier. The change between periods was
mainly due to higher tax items and an impairment of an asset.
Partially offsetting the increase were lower interest and employee
expenses. Foreign currency effects decreased net charges by $4
million for the second quarter of 2017, compared with an increase
of $24 million in the 2016 period.
CASH FLOW FROM OPERATIONS
Cash flow from operations in the first six months of 2017 was
$8.9 billion, compared with $3.7 billion in the corresponding 2016
period. Excluding working capital effects, cash flow from
operations in 2017 was $10.1 billion, compared with $5.8 billion in
the corresponding 2016 period.
CAPITAL AND EXPLORATORY EXPENDITURES
Capital and exploratory expenditures in the first six months of
2017 were $8.9 billion, compared with $12.0 billion in the
corresponding 2016 period. The amounts included $2.1 billion in
2017 and $1.7 billion in 2016 for the company’s share of
expenditures by affiliates, which did not require cash outlays by
the company. Expenditures for upstream represented 89 percent of
the companywide total in second quarter 2017.
NOTICE
Chevron’s discussion of second quarter 2017 earnings with
security analysts will take place on Friday, July 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,” “trends,” ”guidance,” “focus,” “on schedule,”
“on track,” “goals,” “objectives,” “strategies,” “opportunities,”
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 MonthsEnded June 30 Six
MonthsEnded June 30 REVENUES AND OTHER INCOME
2017 2016 2017 2016 Sales
and other operating revenues *
$ 32,877 $ 27,844
$ 64,401 $ 50,914 Income from equity affiliates
1,316 752
2,466 1,328 Other income
287 686
1,034 593
Total Revenues and Other
Income 34,480 29,282
67,901 52,835
COSTS AND OTHER DEDUCTIONS Purchased crude oil and products
18,325 15,278
35,831 26,503 Operating, selling,
general and administrative expenses
5,653 6,087
11,179 12,489 Exploration expenses
125 214
269
584 Depreciation, depletion and amortization
5,311 6,721
9,505 11,124 Taxes other than on income *
3,065 2,973
5,936 5,837 Interest and debt expense
48 79
99 79
Total Costs and Other Deductions
32,527 31,352
62,819 56,616
Income
(Loss) Before Income Tax Expense 1,953 (2,070 )
5,082 (3,781 ) Income tax expense (benefit)
487 (607
)
917 (1,611 )
Net Income (Loss) 1,466 (1,463
)
4,165 (2,170 ) Less: Net income attributable to
noncontrolling interests
16 7
33 25
NET INCOME (LOSS) ATTRIBUTABLE TO CHEVRON CORPORATION
$ 1,450 $ (1,470 )
$ 4,132 $ (2,195 )
PER-SHARE OF COMMON STOCK Net Income (Loss)
Attributable to Chevron Corporation - Basic $
0.77 $ (0.78 )
$ 2.20 $ (1.17 )
-
Diluted $ 0.77 $ (0.78 )
$ 2.18 $
(1.17 )
Dividends $ 1.08 $ 1.07
$
2.16 $ 2.14
Weighted Average Number of Shares
Outstanding (000's) - Basic 1,881,019 1,871,995
1,880,200 1,870,885
- Diluted 1,893,014
1,871,995
1,894,197 1,870,885 * Includes excise,
value-added and similar taxes.
$ 1,771 $ 1,784
$ 3,448 $ 3,436
Attachment 2
CHEVRON CORPORATION - FINANCIAL REVIEW(Millions of
Dollars)(unaudited)
EARNINGS BY MAJOR
OPERATING AREA
Three Months Six Months Ended June 30 Ended
June 30 2017 2016 2017
2016 Upstream United States
$
(102 ) $ (1,113 )
$ (22 ) $
(1,963 ) International
955 (1,349 )
2,392
(1,958 ) Total Upstream
853 (2,462 )
2,370 (3,921 ) Downstream United States
634
537
1,103 784 International
561 741
1,018 1,229 Total Downstream
1,195
1,278
2,121 2,013 All Other (1)
(598 ) (286 )
(359 ) (287 )
Total (2) $ 1,450 $ (1,470 )
$ 4,132 $ (2,195 )
SELECTED BALANCE
SHEET ACCOUNT DATA
June 30, 2017 Dec 31, 2016 Cash and Cash Equivalents
$ 4,762 $ 6,988 Marketable Securities
$
13 $ 13 Total Assets
$ 254,599 $ 260,078 Total
Debt
$ 42,864 $ 46,126 Total Chevron Corporation
Stockholders' Equity
$ 146,203 $ 145,556
Six MonthsEnded June 30
CASH FLOW FROM
OPERATIONS (Preliminary)
2017 2016 Net Cash Provided by
Operating Activities
$ 8,915 $ 3,672 Net Increase in
Operating Working Capital
$ (1,198 ) $ (2,091
) Net Cash Provided by Operating Activities Excluding Working
Capital
$ 10,113 $ 5,763
Three
MonthsEnded June 30 Six MonthsEnded June
30
CAPITAL AND
EXPLORATORY EXPENDITURES (3)
2017 2016 2017
2016 United States Upstream
$
1,154 $ 1,204
$ 2,205 $ 2,480 Downstream
361 332
682 753 Other
35 53
69 75
Total United States 1,550
1,589
2,956 3,308
International Upstream
2,870 3,818
5,786 8,508 Downstream
118 116
187 175 Other
- -
1 1
Total International 2,988 3,934
5,974 8,684
Worldwide $
4,538 $ 5,523
$ 8,930 $
11,992
(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
$ 169 $ 232
$ 346 $ 568
International
1,030 680
1,792
1,135 Total
$ 1,199 $ 912
$ 2,138 $ 1,703
Attachment 3
CHEVRON CORPORATION - FINANCIAL REVIEW
OPERATING
STATISTICS (1)
Three MonthsEnded June 30 Six MonthsEnded
June 30 NET LIQUIDS PRODUCTION (MB/D): (2)
2017 2016 2017 2016 United
States
530 501
517 495 International
1,221
1,188
1,213 1,240
Worldwide 1,751 1,689
1,730 1,735
NET NATURAL GAS PRODUCTION
(MMCF/D): (3) United States
1,027 1,088
1,017 1,177 International
5,144 3,943
4,973
3,994
Worldwide 6,171 5,031
5,990 5,171
TOTAL NET OIL-EQUIVALENT PRODUCTION (MB/D): (4)
United States
701 682
686 692 International
2,079 1,846
2,042 1,905
Worldwide 2,780
2,528
2,728 2,597
SALES OF NATURAL GAS
(MMCF/D): United States
3,265 3,154
3,204 3,481
International
5,142 4,503
5,038 4,531
Worldwide 8,407 7,657
8,242 8,012
SALES OF NATURAL GAS LIQUIDS (MB/D): United States
154 141
145 135 International
104 92
96
90
Worldwide 258 233
241 225
SALES
OF REFINED PRODUCTS (MB/D): United States
1,237 1,263
1,195 1,237 International (5)
1,451 1,449
1,448 1,442
Worldwide 2,688 2,712
2,643
2,679
REFINERY INPUT (MB/D): United States
928
955
920 956 International
726 764
740 780
Worldwide 1,654 1,719
1,660 1,736
(1)
Includes interest in affiliates.
(2)
Includes net production of synthetic
oil:
Canada
50 43
50 46 Venezuela Affiliate
29 28
29 28
(3)
Includes natural gas consumed in
operations (MMCF/D):
United States
40 71
39 69 International
511
430
511 430
(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):
349 362
355 366
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version on businesswire.com: http://www.businesswire.com/news/home/20170728005105/en/
Chevron CorporationMelisa Ritchiemritchie@chevron.com
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