Chevron Swings to 2Q Loss as Oil Demand Slumped
July 31 2020 - 7:39AM
Dow Jones News
By Dave Sebastian
Chevron Corp. posted steep losses in the second quarter as lower
oil and gas prices sapped production gains and the drop in global
travel crimped fuel demand amid the Covid-19 pandemic.
The San Ramon, Calif.-based oil giant on Friday posted a
second-quarter loss of $8.27 billion, or $4.44 a share, compared
with a profit of $4.3 billion, or $2.27 a share, in the comparable
quarter last year.
Adjusted losses were $1.59 a share. Analysts polled by FactSet
were expecting adjusted losses of 93 cents a share.
The company said it booked impairments and other charges of $1.8
billion for the quarter to account for downward revisions in its
commodity price outlook, severance charges of $780 million and a
gain of $310 million on the sale of Azerbaijan assets.
Chevron also impaired its $2.6 billion in investment in
Venezuela due to the operating environment's uncertainty, it said.
Chevron's peers, such as BP PLC, Hess Corp. and Occidental
Petroleum Corp., have taken multibillion-dollar impairments amid
the pandemic-induced economic slowdown.
Revenue fell 65% to $13.49 billion from the year-ago period.
Analysts were looking for $21.87 billion.
"The past few months have presented unique challenges," said
Michael Wirth, Chevron's chairman and chief executive. "The
economic impact of the response to COVID-19 significantly reduced
demand for our products and lowered commodity prices."
The company earlier in July agreed to buy Noble Energy Inc. for
about $5 billion, injecting the first signs of life in
energy-sector deal-making in what would be the largest oil-path
tie-up since the pandemic delivered a shock to the industry. Buying
the company would expand Chevron's presence in the DJ Basin of
Colorado and the Permian Basin, which spans West Texas and New
Mexico. Chevron also said the acquisition would yield it potential
annual cost savings of $300 million.
Write to Dave Sebastian at dave.sebastian@wsj.com
(END) Dow Jones Newswires
July 31, 2020 07:24 ET (11:24 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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