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Chevron Reports Second Quarter Net Income of $1.5 Billion

Chevron Corporation (NYSE:CVX) today reported earnings of $1.5 billion ($0.77 per share – diluted) for second quarter 2017, compared with a loss of $1.5 billion ($0.78 per share – diluted) in the second quarter of 2016. Included in the quarter were impairments and other non-cash charges totaling $430 million, partially offset by gains on asset sales of $160 million. Foreign currency effects increased earnings in the 2017 second quarter by $3 million, compared with an increase of $279 million a year earlier.

Sales and other operating revenues in second quarter 2017 were $33 billion, compared to $28 billion in the year-ago period.

“Second quarter results improved substantially from a year ago and year-to-date net cash flow is positive,” said Chairman and CEO John Watson. “We’re delivering higher production with lower capital and operating expenditures.”

“Oil and gas production was up 10 percent in the second quarter from a year ago,” Watson added. “Our Gorgon LNG Project in Australia closed the quarter running above nameplate capacity and we had record production from our shale and tight resource in the Permian Basin. First production from the Wheatstone LNG Project is expected next month.”

“Operating expenses were down 10 percent and capital spending was down 25 percent in the first six months of the year versus 2016,” Watson commented.

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Worldwide net oil-equivalent production was 2.78 million barrels per day in second quarter 2017, compared with 2.53 million barrels per day from a year ago. Production increases were noted from major capital projects, base business, and shale and tight properties, and lower maintenance-related downtime. These impacts were partially offset by normal field declines, production entitlement effects in several locations and the effect of 2016 asset sales.

U.S. upstream operations incurred a loss of $102 million in second quarter 2017 compared with a loss of $1.11 billion from a year earlier. The improvement reflected lower impairment charges, higher crude oil and natural gas realizations, higher gains on asset sales, and lower operating expenses.

The company’s average sales price per barrel of crude oil and natural gas liquids was $41 in second quarter 2017, up from $36 a year earlier. The average sales price of natural gas was $2.32 per thousand cubic feet in second quarter 2017, compared with $1.21 in last year’s second quarter.

Net oil-equivalent production of 701,000 barrels per day in second quarter 2017 was up 19,000 barrels per day from a year earlier. Production increases from shale and tight properties in the Permian Basin in Texas and New Mexico, base business, and the Jack/St. Malo major capital project were partially offset by the effect of 2016 asset sales and normal field declines. The net liquids component of oil-equivalent production in second quarter 2017 increased 6 percent to 530,000 barrels per day, while net natural gas production decreased 6 percent to 1.03 billion cubic feet per day primarily as a result of 2016 asset sales.

International upstream operations earned $955 million in second quarter 2017 compared with a loss of $1.35 billion a year ago. The increase in earnings reflected lower impairment charges, partially offset by higher depreciation expenses from increased production. The improvement also included lower tax items, higher natural gas sales volumes, higher crude oil realizations and volumes, and lower operating expenses. Foreign currency effects decreased earnings by $4 million in the 2017 second quarter, compared with an increase of $329 million a year earlier.

The average sales price for crude oil and natural gas liquids in second quarter 2017 was $45 per barrel, up from $40 a year earlier. The average price of natural gas was $4.39 per thousand cubic feet in the quarter, compared with $3.93 in last year’s second quarter.

Net oil-equivalent production of 2.08 million barrels per day in second quarter 2017 was up 233,000 barrels per day from a year earlier. Production increases from major capital projects and base business in multiple areas, and lower maintenance-related downtime were partially offset by production entitlement effects in several locations and normal field declines. The net liquids component of oil-equivalent production increased 3 percent to 1.22 million barrels per day in the 2017 second quarter, while net natural gas production increased 30 percent to 5.14 billion cubic feet per day.

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Source: Chevron Corporation

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