Chevron hits record quarterly production in third quarter
Chevron Corporation reported third-quarter earnings of US$4 billion compared with $2 billion earned in third-quarter 2017.
Included in the current quarter were a write-off, an asset impairment, and a nonrecurring contractual settlement totalling US$930 million in the upstream business, and a gain of US$350 million on the sale of southern Africa refining, marketing, and lubricant assets.
Foreign currency effects decreased earnings in the third quarter by $51 million compared with a decrease of US$112 million a year earlier.
Sales and other operating revenues in the third quarter were US$42 billion compared with US$34 billion in the year-ago period.
“Quarterly cash flow from operations of US$9.6 billion was the highest it has been in nearly five years,” noted Chairman and Chief Executive Officer Michael Wirth.
“Net oil-equivalent production of 2.96 million b/d 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% over the prior year quarter.”
Upstream
Worldwide net production was 2.96 million boe/d in the third quarter compared with 2.72 million boe/d from a year ago.
US upstream operations earned US$828 million in the third quarter compared with a loss of US$26 million a year earlier. The improvement reflected higher crude oil realisations and production, partially offset by higher depreciation and exploration expenses, primarily reflecting a US$550-million write-off of the Tigris project in the Gulf of Mexico.
Net production of 831,000 boe/d in the third quarter was up 150,000 boe/d 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 b/d.
The net liquids component of production in the third quarter increased 25% to 654,000 boe/d, while net natural gas production increased 14% to 1.06 bcfd.
International upstream operations earned US$2.55 billion in the third quarter compared with US$515 million a year ago. The increase was mainly due to higher oil and gas realisations and higher gas sales volumes.
Foreign currency effects had a favourable impact on earnings of US$122 million between periods. The third quarter included charges totalling US$380 million for an asset impairment and a contractual settlement.
The average sales price for oil and natural gas liquids in the third quarter was US$69/bbl, up from US$48/bbl a year earlier. The average sales price of gas was USUS$6.73/Mcf in the quarter compared with $4.76/Mcf in last year’s third quarter.
Net production of 2.13 million boe/d in the third quarter was up 89,000 boe/d 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 production decreased 5% to 1.13 million boe/d in the third quarter, while net natural gas production increased 18% to 5.95 bcfd.
Downstream
US downstream operations earned US$748 million in the third quarter compared with earnings of US$640 million a year earlier. The increase was primarily due to higher equity earnings from the 50%-owned Chevron Phillips Chemical Company LLC and lower tax expense, partially offset by higher operating expenses.
Refinery crude oil input in the third quarter decreased 2% to 915,000 b/d from the year-ago period.
Refined product sales of 1.23 million b/d were unchanged from third quarter 2017.
Refinery crude oil input of 710,000 b/d in the third quarter decreased 91,000 b/d 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.
Source: Oil & Gas Journal