- Record quarterly oil-equivalent
production of 2.96 million barrels per day, 9 percent higher than a
year earlier
- Third quarter cash flow from
operations of $9.6 billion
- Share repurchases of $750
million
Chevron Corporation (NYSE: CVX) today reported earnings of $4.0
billion ($2.11 per share – diluted) for third quarter 2018,
compared with $2.0 billion ($1.03 per share – diluted) in the third
quarter of 2017. Included in the current quarter were a write-off,
an asset impairment, and a non-recurring contractual settlement
totaling $930 million in the upstream segment, and a gain of $350
million on the sale of southern Africa refining, marketing and
lubricant assets. Foreign currency effects decreased earnings in
the 2018 third quarter by $51 million, compared with a decrease of
$112 million a year earlier.
Sales and other operating revenues in third quarter 2018 were
$42 billion, compared to $34 billion in the year-ago period.
Earnings Summary
Three MonthsEnded Sept.
30
Nine MonthsEnded Sept.
30
Millions of dollars
2018
2017 2018 2017
Earnings by business segment Upstream
$3,379 $489 $10,026 $2,859 Downstream 1,373 1,814 2,939 3,935 All
Other (705) (351) (1,871)
(710)
Total (1)(2)
$4,047 $1,952
$11,094 $6,084
(1) Includes foreign currency effects
$(51) $(112) $343 $(351)
(2) Net income attributable to Chevron
Corporation (See Attachment 1)
“Third quarter earnings more than doubled from a year ago,” said
Chairman and CEO Michael Wirth. “Our strong financial results
reflect higher production and crude oil prices coupled with a
continued focus on efficiency and productivity.”
“Quarterly cash flow from operations of $9.6 billion was the
highest it has been in nearly five years,” Wirth added. “This
allowed us to pay the dividend, fund our capital program,
strengthen the balance sheet, and repurchase $750 million of the
company’s common stock.”
“Net oil-equivalent production of 2.96 million barrels per day
represents our highest quarter ever. Ramp-up of Wheatstone in
Australia and the Permian Basin in Texas and New Mexico drove a
production increase of 9 percent over the prior year quarter.”
“We also completed the sale of our southern Africa refining,
marketing and lubricant assets, keeping us on track to meet our
asset sales targets,” Wirth added.
UPSTREAM
Worldwide net oil-equivalent production was
2.96 million barrels per day in third quarter 2018, compared with
2.72 million barrels per day from a year ago.
U.S. Upstream
Three Months
Ended Sept. 30
Nine Months
Ended Sept. 30
Millions of dollars
2018
2017 2018
2017 Earnings $ 828 $ (26
) $ 2,314 $ (48 )
U.S. upstream operations earned $828 million in third quarter
2018, compared with a loss of $26 million a year earlier. The
improvement reflected higher crude oil realizations and production,
partially offset by higher depreciation and exploration expenses,
primarily reflecting a $550 million write-off of the Tigris Project
in the Gulf of Mexico.
The company’s average sales price per barrel of crude oil and
natural gas liquids was $62 in third quarter 2018, up from $42 a
year earlier. The average sales price of natural gas was $1.80 per
thousand cubic feet in third quarter 2018, unchanged from the prior
year’s third quarter.
Net oil-equivalent production of 831,000 barrels per day in
third quarter 2018 was up 150,000 barrels per day from a year
earlier. Production increases from shale and tight properties in
the Permian Basin in Texas and New Mexico and base business in the
Gulf of Mexico were partially offset by the impact of asset sales
of 19,000 barrels per day. The net liquids component of
oil-equivalent production in third quarter 2018 increased 25
percent to 654,000 barrels per day, while net natural gas
production increased 14 percent to 1.06 billion cubic feet per
day.
International Upstream
Three Months
Ended Sept. 30
Nine Months
Ended Sept. 30
Millions of dollars
2018
2017 2018
2017 Earnings* $ 2,551
$ 515 $ 7,712 $ 2,907
*Includes foreign currency effects $ (42 ) $
(164 ) $ 295 $ (441 )
International upstream operations earned $2.55 billion in third
quarter 2018, compared with $515 million a year ago. The increase
in earnings was mainly due to higher crude oil and natural gas
realizations, and higher natural gas sales volumes. Foreign
currency effects had a favorable impact on earnings of $122 million
between periods. The 2018 quarter included charges totaling $380
million for an asset impairment and a contractual settlement.
The average sales price for crude oil and natural gas liquids in
third quarter 2018 was $69 per barrel, up from $48 a year earlier.
The average sales price of natural gas was $6.73 per thousand cubic
feet in the quarter, compared with $4.76 in last year’s third
quarter.
Net oil-equivalent production of 2.13 million barrels per day in
third quarter 2018 was up 89,000 barrels per day from a year
earlier. Production increases from major capital projects,
primarily Wheatstone and Gorgon in Australia, were partially offset
by maintenance-related downtime, production entitlement effects and
normal field declines. The net liquids component of oil-equivalent
production decreased 5 percent to 1.13 million barrels per day in
the 2018 third quarter, while net natural gas production increased
18 percent to 5.95 billion cubic feet per day.
DOWNSTREAM
U.S. Downstream
Three Months
Ended Sept. 30
Nine Months
Ended Sept. 30
Millions of dollars
2018
2017 2018 2017
Earnings $ 748 $ 640 $
1,847 $ 1,743
U.S. downstream operations earned $748 million in third quarter
2018, compared with earnings of $640 million a year earlier. The
increase was primarily due to higher equity earnings from the 50
percent-owned Chevron Phillips Chemical Company LLC and lower tax
expense, partially offset by higher operating expenses.
Refinery crude oil input in third quarter 2018
decreased 2 percent to 915,000 barrels per day from the year-ago
period. Refined product sales of 1.23 million barrels per day were
unchanged from third quarter 2017.
International Downstream
Three Months
Ended Sept. 30
Nine Months
Ended Sept. 30
Millions of dollars
2018
2017 2018 2017
Earnings* $625 $1,174
$1,092 $2,192 *Includes foreign currency effects $(7)
$15 $48 $(27)
International downstream operations earned $625 million in third
quarter 2018, compared with $1.17 billion a year earlier. The
decrease in earnings was largely due to lower gains on asset sales.
The absence of third quarter 2017 gains on asset sales more than
offset the current quarter gain from the southern Africa asset
sale. Lower margins on refined product sales also contributed to
the decrease, partially offset by lower operating expenses. The
sale of the company’s Canadian assets in third quarter 2017
contributed to the lower margins and operating expenses. Foreign
currency effects had an unfavorable impact on earnings of $22
million between periods.
Refinery crude oil input of 710,000 barrels per day in third
quarter 2018 decreased 91,000 barrels per day from the year-ago
period, mainly due to the sale of the company’s Canadian refining
asset in third quarter 2017 and crude unit maintenance at the
refineries in Thailand and Singapore.
Total refined product sales of 1.44 million barrels per day in
third quarter 2018 were down 8 percent from the year-ago period,
primarily due to lower diesel, gasoline and jet fuel sales
partially offset by higher fuel oil sales.
ALL OTHER
Three Months
Ended Sept. 30
Nine Months
Ended Sept. 30
Millions of dollars
2018
2017 2018 2017 Net
Charges* $ (705 ) $ (351 )
$ (1,871 ) $ (710 ) *Includes foreign currency
effects $ (2 ) $ 37 $ 0 $ 117
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 third quarter 2018 were $705 million, compared
with $351 million in the year-ago period. The change between
periods was mainly due to higher tax items and interest expense,
partially offset by lower employee expense. Foreign currency
effects had an unfavorable impact on earnings of $39 million
between periods.
CASH FLOW FROM OPERATIONS
Cash flow from operations in the first nine months of 2018 was
$21.5 billion, compared with $14.2 billion in the corresponding
2017 period. Excluding working capital effects, cash flow from
operations in 2018 was $23.3 billion, compared with $14.8 billion
in the corresponding 2017 period. The 2017 results were
retrospectively adjusted to conform to new accounting standards
that became effective for the company in first quarter 2018.
CAPITAL AND EXPLORATORY EXPENDITURES
Capital and exploratory expenditures in the first nine months of
2018 were $14.3 billion, compared with $13.4 billion in the
corresponding 2017 period. The amounts included $4.1 billion in
2018 and $3.3 billion in 2017 for the company’s share of
expenditures by affiliates, which did not require cash outlays by
the company. Expenditures for upstream represented 88 percent of
the companywide total in the first nine months of 2018.
NOTICE
Chevron’s discussion of third quarter 2018 earnings with
security analysts will take place on Friday, November 2, 2018, 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 website at www.chevron.com under the “Investors”
section. Additional financial and operating information and other
complementary materials will be available under “Events and
Presentations” in the “Investors” section on the Chevron
website.
As used in this press release, the term “Chevron” and such terms
as “the company,” “the corporation,” “our,” “we,” “us” and “its”
may refer to Chevron Corporation, one or more of its consolidated
subsidiaries, or to all of them taken as a whole. All of these
terms are used for convenience only and are not intended as a
precise description of any of the separate companies, each of which
manages its own affairs.
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,”
“will,” “budgets,” “outlook,” “trends,” ”guidance,” “focus,” “on
schedule,” “on track,” "is slated,” “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 the
company’s 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, tariffs,
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 impact of the 2017 U.S. tax legislation on the
company’s future results; 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 19 through 22 of the company’s 2017 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.
CHEVRON CORPORATION - FINANCIAL
REVIEW
Attachment 1 (Millions of Dollars, Except Per-Share
Amounts)
CONSOLIDATED
STATEMENT OF INCOME
(unaudited)
Three Months Nine Months Ended
September 30 Ended September 30 REVENUES AND OTHER
INCOME 2018 2017 2018 2017 Sales
and other operating revenues (1)
$ 42,105 $ 33,892
$ 118,564 $ 98,293 Income from equity affiliates
1,555 1,036
4,685 3,502 Other income
327 1,277
738 2,311
Total Revenues and Other Income
43,987 36,205
123,987 104,106
COSTS AND OTHER
DEDUCTIONS Purchased crude oil and products
24,681
18,776
70,658 54,607 Operating, selling, general and
administrative expenses (2)
6,003 5,956
17,657 16,869
Exploration expenses
625 239
960 508 Depreciation,
depletion and amortization
5,380 5,109
14,167 14,614
Taxes other than on income (1)
1,259 3,213
3,966
9,149 Interest and debt expense
182 35
558 134 Other
components of net periodic benefit costs (2)
158 219
344 485
Total Costs and Other Deductions
38,288 33,547
108,310 96,366
Income Before Income
Tax Expense 5,699 2,658
15,677 7,740 Income tax
expense
1,643 672
4,540 1,589
Net Income
4,056 1,986
11,137 6,151 Less: Net income
attributable to noncontrolling interests
9 34
43 67
NET INCOME ATTRIBUTABLE TO CHEVRON
CORPORATION
$ 4,047 $ 1,952
$ 11,094 $ 6,084
PER-SHARE OF COMMON STOCK Net Income Attributable to
Chevron Corporation - Basic $ 2.13 $ 1.03
$ 5.84 $ 3.23
- Diluted $ 2.11 $
1.03
$ 5.79 $ 3.21
Weighted Average Number
of Shares Outstanding (000's) - Basic 1,900,717
1,882,650
1,899,044 1,881,026
- Diluted
1,917,474 1,895,879
1,916,562 1,894,764
(1) The three-month and nine-month
comparative periods ended September 30, 2017, include excise,
value-added and similar taxes of $1,867 million and $5,315 million,
respectively, collected on behalf of third parties. Beginning in
2018, these taxes are netted in "Taxes other than on income" in
accordance with ASU 2014-09.
(2) 2017 adjusted to conform to ASU
2017-07 - Employee Compensation (Topic 715).
CHEVRON CORPORATION - FINANCIAL REVIEW Attachment 2
(Millions of Dollars) (unaudited)
EARNINGS BY MAJOR
OPERATING AREA
Three Months Nine Months Ended September 30
Ended September 30 2018 2017 2018
2017 Upstream United States
$ 828 $ (26)
$ 2,314 $ (48) International
2,551 515
7,712 2,907 Total Upstream
3,379 489
10,026
2,859 Downstream United States
748 640
1,847 1,743
International
625 1,174
1,092 2,192 Total Downstream
1,373 1,814
2,939 3,935 All Other (1)
(705)
(351)
(1,871) (710)
Total (2) $
4,047 $ 1,952
$ 11,094 $ 6,084
SELECTED BALANCE
SHEET ACCOUNT DATA
Sep. 30, 2018 Dec. 31, 2017 Cash and Cash
Equivalents
$ 9,686 $ 4,813 Marketable Securities
$ 60 $ 9 Total Assets
$ 256,606 $
253,806 Total Debt
$ 36,110 $ 38,763 Total Chevron
Corporation Stockholders' Equity
$ 153,575 $ 148,124
Nine Months Ended September 30
CASH FLOW FROM
OPERATIONS (Preliminary) (3)
2018 2017 Net Cash Provided by Operating Activities
$ 21,467 $ 14,245 Net Decrease (Increase) in
Operating Working Capital
$ (1,882) $ (548) Net Cash
Provided by Operating Activities Excluding Working Capital
$
23,349 $ 14,793
Three Months Nine
Months Ended September 30 Ended September 30
CAPITAL AND
EXPLORATORY EXPENDITURES (4)
2018 2017 2018 2017 United
States Upstream
$ 1,903 $ 1,201
$
5,166 $ 3,406 Downstream
377 367
1,155 1,049
Other
72 63
156 132
Total United States
2,352 1,631
6,477 4,587
International
Upstream
2,639 2,715
7,524 8,501 Downstream
132 110
341 297 Other
1 -
3 1
Total
International 2,772 2,825
7,868 8,799
Worldwide $ 5,124 $ 4,456
$
14,345 $ 13,386
(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) 2017 adjusted to conform to Accounting
Standards Updates 2016-15 and 2016-18 - Statement of Cash Flow
(Topic 230). (4) Includes interest in affiliates: United States
$ 61 $ 130
$ 218 $ 476 International
1,350 984
3,897 2,776 Total
$ 1,411 $
1,114
$ 4,115 $ 3,252
CHEVRON CORPORATION - FINANCIAL REVIEW
Attachment 3 Three Months Nine
Months
OPERATING
STATISTICS (1)
Ended September 30 Ended September 30 NET LIQUIDS
PRODUCTION (MB/D): (2) 2018 2017
2018 2017 United States
654 525
599 520 International
1,133 1,194
1,155 1,206
Worldwide 1,787 1,719
1,754 1,726
NET NATURAL GAS PRODUCTION (MMCF/D): (3) United
States
1,061 932
1,011 988 International
5,951
5,053
5,731 5,001
Worldwide 7,012 5,985
6,742 5,989
TOTAL NET OIL-EQUIVALENT PRODUCTION
(MB/D): (4) United States
831 681
768 684
International
2,125 2,036
2,110 2,040
Worldwide 2,956 2,717
2,878 2,724
SALES OF NATURAL GAS (MMCF/D): United States
3,334
3,455
3,343 3,288 International
5,681 4,978
5,379 5,018
Worldwide 9,015 8,433
8,722
8,306
SALES OF NATURAL GAS LIQUIDS (MB/D): United
States
188 137
178 142 International
96 90
96 94
Worldwide 284 227
274 236
SALES OF REFINED PRODUCTS (MB/D): United States
1,234
1,225
1,220 1,206 International (5)
1,435 1,556
1,449 1,484
Worldwide 2,669 2,781
2,669
2,690
REFINERY INPUT (MB/D): United States
915
931
900 924 International
710 801
721 760
Worldwide 1,625 1,732
1,621 1,684 (1)
Includes interest in affiliates. (2) Includes net production of
synthetic oil: Canada
54 56
53 52 Venezuela Affiliate
24 29
24 29 (3) Includes natural gas consumed in
operations (MMCF/D): United States
34 34
34 37
International
567 545
569 523
(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):
368 369
369 360
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Chevron CorporationSean Comey, +1 925-842-5509
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