Chevron reports first quarter net income of $3.6bn – sweetcrudereports gas zone edenvale

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27 April 2018, Sweetcrude, Houston, Texas – Chevron Corporation Friday reported earnings of $3.6 billion ($1.90 per share – diluted) for first quarter 2018, compared with $2.7 billion ($1.41 per share – diluted) in the first quarter of 2017.

Foreign currency effects increased earnings in the 2018 first quarter by $129 million, compared with a decrease of $241 million a year earlier. Sales and other operating revenues in first quarter 2018 were $36 billion, compared to $32 billion in the year-ago period.

First quarter earnings and cash flow improved significantly from a year ago,” said Chairman and CEO Michael Wirth. “We benefitted from growing production and higher prices.” “Our cash flow continues to increase with the powerful combination of expanding upstream margins and volumes,” Wirth added.

“Oil and gas production is increasing, most notably in our Gorgon and Wheatstone LNG Projects in Australia, and our shale developments in the Permian Basin where production grew 65 percent from a year ago.” “Upstream volumes are expected to continue to increase in future quarters,” Wirth added. “In the downstream, we reached a significant milestone,” Wirth commented.

At peak production, the unit is expected to produce 1.5 million metric tons per year and to be one of the largest and most energy efficient ethane crackers in the world. “In addition, we continue our asset sale programme,” Wirth continued. The company sold its interest in the Elk Hills Field in California in early April and expects to complete the sale of its southern Africa refining, marketing and lubricant assets later in the year.

The company’s average sales price per barrel of crude oil and natural gas liquids was $56 in first quarter 2018, up from $45 a year earlier. The average sales price of natural gas was $2.02 per thousand cubic feet in first quarter 2018, compared with $2.39 in last year’s first quarter.

Net oil-equivalent production of 733,000 barrels per day in first quarter 2018 was up 61,000 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 39,000 barrels per day and normal field declines.

International upstream operations earned $2.70 billion in first quarter 2018, compared with $1.44 billion a year ago. The increase in earnings was mainly due to higher crude oil and natural gas realizations, higher natural gas sales volumes and lower tax items, partially offset by the absence of a gain of approximately $600 million from the 2017 sale of the Indonesia geothermal business and higher depreciation expenses associated with higher production.

Foreign currency effects had a favorable impact on earnings of $394 million between periods. The average sales price for crude oil and natural gas liquids in first quarter 2018 was $61 per barrel, up from $49 a year earlier. The average sales price of natural gas was $5.85 per thousand cubic feet in the quarter, compared with $4.36 in last year’s first quarter.

Net oil-equivalent production of 2.12 million barrels per day in first quarter 2018 was up 115,000 barrels per day from a year earlier. Production increases from major capital projects, primarily Gorgon and Wheatstone in Australia, were partially offset by production entitlement effects in several locations, normal field declines and the impact of asset sales of 22,000 barrels per day.

U.S. downstream operations earned $442 million in first quarter 2018, compared with earnings of $469 million a year earlier. The decrease was primarily due to lower margins on refined product sales and higher expenses from planned turnaround activity at the El Segundo, California refinery.

These were partially offset by lower tax expense, and higher equity earnings from the 50 percent-owned Chevron Phillips Chemical Company LLC. Refinery crude oil input in first quarter 2018 increased 2 percent to 930,000 barrels per day from the year-ago period.

International downstream operations earned $286 million in first quarter 2018, compared with $457 million a year earlier. The decrease in earnings was largely due to lower margins on refined product sales, partially offset by lower operating expenses.

Foreign currency effects had a favorable impact on earnings of $57 million between periods. Refinery crude oil input of 712,000 barrels per day in first quarter 2018 decreased 41,000 barrels per day from the year-ago period mainly due to sale of the company’s Canadian refining asset in third quarter 2017.