- Upstream volumes up 9 percent from prior year; includes
Permian unconventional production of 421,000 barrels per
day
- Second quarter cash flow from operations of $8.8
billion
- Share repurchases of $1.0 billion in second quarter
Chevron Corporation (NYSE: CVX) today reported earnings of $4.3
billion ($2.27 per share - diluted) for second quarter 2019,
compared with $3.4 billion ($1.78 per share - diluted) in the
second quarter of 2018. Included in the current quarter were
earnings of $740 million associated with the Anadarko merger
termination fee and a non-cash tax benefit of $180 million related
to a reduction in the Alberta, Canada corporate income tax rate.
Foreign currency effects increased earnings in the 2019 second
quarter by $15 million.
Sales and other operating revenues in second quarter 2019 were
$36 billion, compared to $40 billion in the year-ago period.
Earnings Summary
Three Months Ended June
30
Six Months Ended June
30
Millions of dollars
2019
2018
2019
2018
Earnings by business segment
Upstream
$3,483
$3,295
$6,606
$6,647
Downstream
729
838
981
1,566
All Other
93
(724)
(633)
(1,166)
Total (1)(2)
$4,305
$3,409
$6,954
$7,047
(1) Includes foreign currency effects
$15
$265
$(122)
$394
(2) Net income attributable to Chevron
Corporation (See Attachment 1)
“Second quarter earnings and cash flow benefited from record
quarterly production volumes and the receipt of the Anadarko merger
termination fee, partially offset by the impact of lower oil and
gas prices,” said Michael Wirth, Chevron’s chairman of the board
and chief executive officer. "Net oil-equivalent production was the
highest in the company's history, driven by continued growth in the
Permian Basin and at Wheatstone in Australia."
“Our strong financial and operational results reflect consistent
execution, allowing us to pay our dividend, fund our attractive
capital program, further strengthen our balance sheet and return
surplus cash to our shareholders. After suspending our share
repurchases while in merger discussions with Anadarko, we resumed
buybacks in May and expect to be at our planned repurchase rate of
$5 billion per year in the third quarter,” Wirth added.
"We continue to high-grade our portfolio and made progress on
our three-year target of $5-10 billion of asset sale proceeds.
During the quarter, we executed a sales agreement for our U.K.
Central North Sea upstream assets, which we expect to close later
this year. We also completed the acquisition of the Pasadena
refinery in Texas, which will enable us to supply more of our
retail market with Chevron-produced products and process more
domestic light crude oil," Wirth said.
Additionally, Chevron Phillips Chemical Company LLC, the
company's 50 percent-owned affiliate, recently announced plans to
jointly develop petrochemical projects in the U.S. Gulf Coast and
Qatar with start-ups expected in 2024 and 2025, respectively.
The company also recently entered into agreements to invest in
renewable natural gas plants in California and to purchase
renewable power in Texas for its Permian Basin operations.
UPSTREAM
Worldwide net oil-equivalent production was 3.08 million barrels
per day in second quarter 2019, an increase of 9 percent from 2.83
million barrels per day from a year ago.
U.S. Upstream
Three Months Ended June
30
Six Months Ended June
30
Millions of dollars
2019
2018
2019
2018
Earnings
$896
$838
$1,644
$1,486
U.S. upstream operations earned $896 million in second quarter
2019, compared with $838 million a year earlier. The increase was
primarily due to higher crude oil production, partially offset by
lower crude oil and natural gas realizations, higher operating and
depreciation expenses primarily related to increased Permian
activity, and higher tax items.
The company’s average sales price per barrel of crude oil and
natural gas liquids was $52 in second quarter 2019, down from $59 a
year earlier. The average sales price of natural gas was $0.68 per
thousand cubic feet in second quarter 2019, down from $1.61 in last
year’s second quarter.
Net oil-equivalent production of 898,000 barrels per day in
second quarter 2019 was up 159,000 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 normal field declines. The
net liquids component of oil-equivalent production in second
quarter 2019 increased 23 percent to 710,000 barrels per day, while
net natural gas production increased 15 percent to 1.13 billion
cubic feet per day, compared to last year's second quarter.
Second quarter unconventional production in the Permian Basin
was 421,000 barrels per day, representing growth of over 50 percent
compared to a year ago, as the company continues to invest in high
return opportunities in this key region.
International Upstream
Three Months Ended June
30
Six Months Ended June
30
Millions of dollars
2019
2018
2019
2018
Earnings*
$2,587
$2,457
$4,962
$5,161
*Includes foreign currency effects
$22
$217
$(146)
$337
International upstream operations earned $2.59 billion in second
quarter 2019, compared with $2.46 billion a year ago. The increase
in earnings was mostly due to higher natural gas sales volumes, tax
benefits mostly associated with a reduction in the Alberta, Canada
corporate income tax rate, lower operating expenses, and higher
gains on asset sales. Partially offsetting these effects were lower
crude oil and natural gas realizations. Foreign currency effects
had an unfavorable impact on earnings of $195 million between
periods.
The average sales price for crude oil and natural gas liquids in
second quarter 2019 was $62 per barrel, down from $68 a year
earlier. The average sales price of natural gas was $5.43 per
thousand cubic feet in the quarter, compared with $5.64 in last
year’s second quarter.
Net oil-equivalent production of 2.19 million barrels per day in
second quarter 2019 was up 99,000 barrels per day from a year
earlier. Production increases from Wheatstone and other major
capital projects, base business, and shale and tight properties,
were partially offset by normal field declines and the effect of
asset sales. The net liquids component of oil-equivalent production
was relatively flat at 1.15 million barrels per day in the 2019
second quarter, while net natural gas production increased 10
percent to 6.20 billion cubic feet per day, compared to last year's
second quarter.
DOWNSTREAM
U.S. Downstream
Three Months Ended June
30
Six Months Ended June
30
Millions of dollars
2019
2018
2019
2018
Earnings
$465
$657
$682
$1,099
U.S. downstream operations earned $465 million in second quarter
2019, compared with earnings of $657 million a year earlier. The
decrease was primarily due to lower margins on refined product
sales and lower equity earnings from the 50 percent-owned Chevron
Phillips Chemical Company LLC.
Refinery crude oil input in second quarter 2019 increased 12
percent to 960,000 barrels per day from the year-ago period,
primarily due to the absence of second quarter 2018 planned
turnaround activity and the purchase of the Pasadena refinery in
Texas. Refined product sales of 1.28 million barrels per day were
up 3 percent from second quarter 2018.
International Downstream
Three Months Ended June
30
Six Months Ended June
30
Millions of dollars
2019
2018
2019
2018
Earnings*
$264
$181
$299
$467
*Includes foreign currency effects
$(9)
$44
$22
$55
International downstream operations earned $264 million in
second quarter 2019, compared with $181 million a year earlier. The
increase in earnings was largely due to higher margins on refined
product sales and a post-close working capital true-up related to
the 2018 sale of the Cape Town refinery in South Africa. Foreign
currency effects had an unfavorable impact on earnings of $53
million between periods.
Refinery crude oil input of 599,000 barrels per day in second
quarter 2019 decreased 140,000 barrels per day from the year-ago
period, mainly due to the sale of the company’s interest in the
Cape Town refinery in third quarter 2018 and maintenance at the GS
Caltex refinery in Yeosu, South Korea in second quarter 2019.
Total refined product sales of 1.26 million barrels per day in
second quarter 2019 were down 14 percent from the year-ago period,
mainly due to the sale of the southern Africa refining and
marketing business in third quarter 2018.
ALL OTHER
Three Months Ended June
30
Six Months Ended June
30
Millions of dollars
2019
2018
2019
2018
Earnings/(Net Charges)*
$93
$(724)
$(633)
$(1,166)
*Includes foreign currency effects
$2
$4
$2
$2
All Other consists of worldwide cash management and debt
financing activities, corporate administrative functions, insurance
operations, real estate activities and technology companies.
Net earnings in second quarter 2019 were $93 million, compared
with net charges of $724 million in the year-ago period. The change
between periods was mainly due to the receipt of the Anadarko
termination fee and lower corporate expenses. Foreign currency
effects had an unfavorable impact on earnings of $2 million between
periods.
CASH FLOW FROM OPERATIONS
Cash flow from operations in the first six months of 2019 was
$13.8 billion, compared with $11.9 billion in the corresponding
2018 period. Included in cash flow from operations during second
quarter 2019 was $1.0 billion associated with the receipt of the
Anadarko merger termination fee. Excluding working capital effects,
cash flow from operations in 2019 was $14.1 billion, compared with
$14.2 billion in the corresponding 2018 period.
CAPITAL AND EXPLORATORY EXPENDITURES
Capital and exploratory expenditures in the first six months of
2019 were $10.0 billion, compared with $9.2 billion in the
corresponding 2018 period. The amounts included $3.1 billion in
2019 and $2.7 billion in 2018 for the company’s share of
expenditures by affiliates, which did not require cash outlays by
the company. Expenditures for upstream represented 85 percent of
the companywide total in 2019. Included in 2019 were $0.4 billion
of inorganic expenditures, primarily associated with the
acquisition of the Pasadena refinery in Texas.
NOTICE
Chevron’s discussion of second quarter 2019 earnings with
security analysts will take place on Friday, August 2, 2019, 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 news 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 news 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,” “poised” 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 news 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 and other producing 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 pending or future litigation; the
company’s future acquisitions or dispositions 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,
sanctions, 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 18 through 21 of the company’s 2018 Annual Report
on Form 10-K and in subsequent filings with the U.S. Securities and
Exchange Commission. Other unpredictable or unknown factors not
discussed in this news release could also have material adverse
effects on forward-looking statements.
CHEVRON CORPORATION -
FINANCIAL REVIEW
Attachment 1
(Millions of Dollars, Except
Per-Share Amounts)
(unaudited)
CONSOLIDATED
STATEMENT OF INCOME
Three Months Ended June
30
Six Months Ended June
30
REVENUES AND OTHER INCOME
2019
2018
2019
2018
Sales and other operating revenues
$
36,323
$
40,491
$
70,512
$
76,459
Income from equity affiliates
1,196
1,493
2,258
3,130
Other income
1,331
252
1,280
411
Total Revenues and Other Income
38,850
42,236
74,050
80,000
COSTS AND OTHER DEDUCTIONS
Purchased crude oil and products
20,835
24,744
40,538
45,977
Operating expenses *
6,360
6,332
12,331
11,840
Exploration expenses
141
177
330
335
Depreciation, depletion and
amortization
4,334
4,498
8,428
8,787
Taxes other than on income
1,047
1,363
2,108
2,707
Interest and debt expense
198
217
423
376
Total Costs and Other
Deductions
32,915
37,331
64,158
70,022
Income Before Income Tax
Expense
5,935
4,905
9,892
9,978
Income tax expense
1,645
1,483
2,960
2,897
Net Income
4,290
3,422
6,932
7,081
Less: Net income (loss) attributable to
noncontrolling interests
(15
)
13
(22
)
34
NET INCOME ATTRIBUTABLE TO CHEVRON
CORPORATION
$
4,305
$
3,409
$
6,954
$
7,047
PER-SHARE OF COMMON STOCK
Net Income Attributable to Chevron
Corporation
- Basic
$
2.28
$
1.79
$
3.68
$
3.71
- Diluted
$
2.27
$
1.78
$
3.66
$
3.68
Weighted Average Number of Shares
Outstanding (000's)
- Basic
1,889,265
1,900,375
1,888,637
1,898,194
- Diluted
1,902,977
1,918,949
1,901,869
1,916,099
* Includes operating expense, selling,
general and administrative expense, and other components of net
periodic benefit costs
CHEVRON CORPORATION -
FINANCIAL REVIEW
Attachment 2
(Millions of Dollars)
(unaudited)
EARNINGS BY MAJOR
OPERATING AREA
Three Months Ended June
30
Six Months Ended June
30
2019
2018
2019
2018
Upstream
United States
$
896
$
838
$
1,644
$
1,486
International
2,587
2,457
4,962
5,161
Total Upstream
3,483
3,295
6,606
6,647
Downstream
United States
465
657
682
1,099
International
264
181
299
467
Total Downstream
729
838
981
1,566
All Other (1)
93
(724
)
(633
)
(1,166
)
Total (2)
$
4,305
$
3,409
$
6,954
$
7,047
SELECTED BALANCE
SHEET ACCOUNT DATA (Preliminary)
Jun 30, 2019
Dec 31, 2018
Cash and Cash Equivalents
$
8,513
$
9,342
Time Deposits
$
—
$
950
Marketable Securities
$
58
$
53
Total Assets
$
255,878
$
253,863
Total Debt
$
30,649
$
34,459
Total Chevron Corporation Stockholders'
Equity
$
156,395
$
154,554
Three Months Ended June
30
Six Months Ended June
30
CAPITAL AND
EXPLORATORY EXPENDITURES (3)
2019
2018
2019
2018
United States
Upstream
$
1,956
$
1,687
$
3,827
$
3,263
Downstream
671
379
1,054
778
Other
52
48
131
84
Total United States
2,679
2,114
5,012
4,125
International
Upstream
2,415
2,572
4,736
4,885
Downstream
189
128
266
209
Other
5
2
8
2
Total International
2,609
2,702
5,010
5,096
Worldwide
$
5,288
$
4,816
$
10,022
$
9,221
(1) Includes worldwide cash management and
debt financing activities, corporate administrative functions,
insurance operations, real estate activities, and technology
companies.
(2) Net Income Attributable to Chevron
Corporation (See Attachment 1).
(3) Includes interest in affiliates:
United States
$
81
$
49
$
171
$
157
International
1,531
1,360
2,973
2,547
Total
$
1,612
$
1,409
$
3,144
$
2,704
CHEVRON CORPORATION -
FINANCIAL REVIEW
Attachment 3
(Billions of Dollars)
(unaudited)
SUMMARIZED
STATEMENT OF CASH FLOWS (Preliminary)
Six Months Ended June
30
OPERATING ACTIVITIES
2019
2018
Net Income
$
6.9
$
7.1
Adjustments
Depreciation, depletion and
amortization
8.4
8.8
Distributions less than income from equity
affiliates
(1.3
)
(1.8
)
Loss (gain) on asset retirements and
sales
(0.1
)
(0.1
)
Deferred income tax provision
0.4
0.5
Net decrease (increase) in operating
working capital
(0.3
)
(2.3
)
Other operating activity
(0.2
)
(0.3
)
Net Cash Provided by Operating
Activities
$
13.8
$
11.9
INVESTING ACTIVITIES
Capital expenditures
(6.5
)
(6.2
)
Proceeds and deposits related to asset
sales and returns of investment
0.9
0.8
Other investing activity(1)
0.3
—
Net Cash Used for Investing
Activities
$
(5.3
)
$
(5.4
)
FINANCING ACTIVITIES
Net change in debt
(4.1
)
(0.4
)
Cash dividends — common stock
(4.5
)
(4.3
)
Net sales (purchases) of treasury
shares
(0.8
)
1.0
Distributions to noncontrolling
interests
—
(0.1
)
Net Cash Used for Financing Activities
(2)
$
(9.4
)
$
(3.7
)
EFFECT OF EXCHANGE RATE CHANGES ON
CASH, CASH EQUIVALENTS AND RESTRICTED CASH
—
—
NET CHANGE IN CASH, CASH EQUIVALENTS
AND RESTRICTED CASH (2)
$
(0.8
)
$
2.8
(1) Primarily net maturities of time
deposits, partly offset by borrowings of loans by equity
affiliates.
(2) May not match sum of parts due to
presentation in billions.
CHEVRON CORPORATION -
FINANCIAL REVIEW
Attachment 4
(unaudited)
OPERATING
STATISTICS (1)
Three Months Ended June
30
Six Months Ended June
30
NET LIQUIDS PRODUCTION (MB/D):
(2)
2019
2018
2019
2018
United States
710
575
700
571
International
1,153
1,148
1,169
1,167
Worldwide
1,863
1,723
1,869
1,738
NET NATURAL GAS PRODUCTION (MMCF/D):
(3)
United States
1,130
980
1,146
986
International
6,197
5,636
6,006
5,618
Worldwide
7,327
6,616
7,152
6,604
TOTAL NET OIL-EQUIVALENT PRODUCTION
(MB/D): (4)
United States
898
739
891
736
International
2,186
2,087
2,170
2,103
Worldwide
3,084
2,826
3,061
2,839
SALES OF NATURAL GAS (MMCF/D):
United States
3,744
3,289
3,998
3,349
International
6,007
4,979
5,922
5,225
Worldwide
9,751
8,268
9,920
8,574
SALES OF NATURAL GAS LIQUIDS
(MB/D):
United States
204
190
202
173
International
120
97
116
96
Worldwide
324
287
318
269
SALES OF REFINED PRODUCTS
(MB/D):
United States
1,278
1,243
1,235
1,214
International (5)
1,263
1,475
1,339
1,456
Worldwide
2,541
2,718
2,574
2,670
REFINERY INPUT (MB/D):
United States
960
856
911
892
International
599
739
634
726
Worldwide
1,559
1,595
1,545
1,618
(1) Includes interest in affiliates.
(2) Includes net production of synthetic
oil:
Canada
49
50
50
52
Venezuela Affiliate
0
24
5
24
(3) Includes natural gas consumed in
operations (MMCF/D):
United States
31
32
34
34
International
614
568
611
570
(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):
340
378
365
370
View source
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Sean Comey -- +1 925-842-5509
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