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--Downstream earnings of $975 million increase $844 million on improved margins
Chevron Corporation (CVX) today reported earnings of $5.41 billion
($2.70 per share -- diluted) for the second quarter 2010, compared with
$1.75 billion ($0.87 per share -- diluted) in the 2009 second quarter.
Foreign currency effects increased earnings in the 2010 quarter by $241
million, compared with a reduction of $453 million a year earlier.
For the first half of 2010, earnings were $9.96 billion ($4.97 per share
-- diluted), up from $3.58 billion ($1.79 per share -- diluted) in the
first six months of 2009.
Sales and other operating revenues in the second quarter 2010 were $51
billion, up from $40 billion in the year-ago period due mainly to higher
prices for crude oil, natural gas and refined products.
Earnings Summary
Three Months Six Months
Ended June 30 Ended June 30
------------------------ ------------------------
Millions of dollars 2010 2009 2010 2009
------------------------------------- ------------ ------------ ------------ ------------
Earnings by Business Segment
Upstream $4,542 $1,657 $9,266 $3,035
Downstream 975 131 1,171 884
All Other (108) (43) (476) (337)
------------------------------------- ------------ ------------ ------------ ------------
Total (1)(2)(3) $5,409 $1,745 $9,961 $3,582
------------------------------------- ------------ ------------ ------------ ------------
(1) Includes foreign currency effects $241 $(453) $43 $(507)
(2) Net income attributable to Chevron Corporation (See
Attachment 1)
(3) Prior period information conformed to 2010 presentation of
Business Segments.
"We had another very successful quarter -- both operationally and
financially," said Chairman and CEO John Watson. "Current quarter
earnings from upstream operations benefited significantly from higher
prices for crude oil and natural gas and higher net oil-equivalent
production. In the downstream, improved margins for refined petroleum
products contributed to increased earnings."
Watson added, "During the second quarter, we continued to make
significant progress toward building a leading natural gas business to
supply Australia and the Asia-Pacific region. We also progressed several
new upstream opportunities in other areas." Recent upstream achievements
include:
--
Australia -- Two deepwater natural gas discoveries in the
Carnarvon Basin off the northwest coast, Clio-3 in 67 percent-owned
Block WA-205-P and Sappho-1 in 50 percent-owned Block WA-392-P. These
discoveries will contribute to future growth at the company-operated
Gorgon and Wheatstone liquefied natural gas (LNG) projects.
--
Australia -- Signed nonbinding Heads of Agreement (HOA) with
Korea Gas Corporation to take delivery of 1.95 million metric tons per
year of LNG from the Chevron-operated Wheatstone Project and to
acquire an equity share in the field licenses and LNG facilities. HOAs
are now in place representing about 80 percent of the total LNG
available from the foundation project. The project, currently
undergoing front-end engineering and design, has a planned capacity of
8.6 million metric tons per year.
--
Indonesia -- Reached final investment decision for Development
Area 13 of the Duri Field where Chevron holds a 100 percent working
interest. The expansion project is expected to increase crude oil
production by approximately 20,000 barrels per day.
--
Romania -- Successful bidder for three shale-gas exploration
blocks, comprising approximately 675,000 acres in the southeast region
of the country.
--
Canada -- Acquired approximately 200,000 acres of shale-gas
leasehold in Western Canada. The appraisal of this acreage is expected
to begin by the end of 2011.
--
Venezuela -- Formed consortium to work toward commercializing
the Carabobo heavy oil resource.
--
Russia -- Signed nonbinding Heads of Agreement with Rosneft,
Russia’s largest oil company, for a deepwater development partnership
on the Shatsky Ridge in the eastern Black Sea.
In addition, the company has terminated the three-year $15 billion share
repurchase program that had been initiated in September 2007. In its
place, the Board of Directors approved a new, ongoing share repurchase
program with no set term or monetary limits. The company does not plan
to purchase any shares in the third quarter 2010.
UPSTREAM
Worldwide net oil-equivalent production was 2.75 million barrels per day
in the second quarter 2010, up 76,000 barrels per day or 3 percent from
2.67 million barrels per day in the 2009 second quarter. The increase
was primarily driven by new production from major project start-ups and
ramp-ups in the United States and Brazil, and expansion of capacity at
Tengiz in Kazakhstan.
U.S. Upstream
Three Months Six Months
Ended June 30 Ended June 30
------------ ------------
Millions of Dollars 2010 2009 2010 2009
------------------- ------ ------ ------ ------
Earnings $1,090 $280 $2,246 $307
------------------- ------ ------ ------ ------
U.S. upstream earnings of $1.09 billion in the second quarter of 2010
were up $810 million from a year earlier, primarily due to higher crude
oil and natural gas realizations.
The company’s average sales price per barrel of crude oil and natural
gas liquids was approximately $71 in the 2010 quarter, compared with $50
a year ago. The average sales price of natural gas was $4.01 per
thousand cubic feet, up from $3.27 in last year’s second quarter.
Net oil-equivalent production of 708,000 barrels per day in the second
quarter 2010 was up 8,000 barrels per day, or about 1 percent, from a
year earlier. The increase in production was primarily associated with
start-up of the Tahiti Field in second quarter 2009, along with the
restoration of volumes that were offline in the second quarter of 2009
due to 2008 hurricanes in the Gulf of Mexico, partly offset by natural
field declines. The net liquids component of production increased 4
percent in the 2010 second quarter to 488,000 barrels per day, while net
natural gas production declined 6 percent to 1.32 billion cubic feet per
day.
International Upstream
Three Months Six Months
Ended June 30 Ended June 30
------------- -------------
Millions of Dollars 2010 2009 2010 2009
---------------------------------- ------ ------- ------ -------
Earnings* $3,452 $1,377 $7,020 $2,728
---------------------------------- ------ ------- ------ -------
*Includes foreign currency effects $ 107 $ (467) $ 5 $ (434)
International upstream earnings of $3.45 billion increased $2.08 billion
from the second quarter 2009 due mainly to the impact of higher prices
and sales volumes for crude oil. Foreign currency effects increased
earnings by $107 million in the 2010 quarter, compared with a decrease
of $467 million a year earlier.
The average sales price for crude oil and natural gas liquids in the
2010 quarter was $71 per barrel, compared with $53 a year earlier. The
average price of natural gas was $4.40 per thousand cubic feet, up from
$3.73 in last year’s second quarter.
Net oil-equivalent production of 2.04 million barrels per day in the
second quarter 2010 was up 3 percent, or 68,000 barrels per day, from a
year ago. The increase included approximately 72,000 barrels per day
associated with ramp-up of two projects -- the expansion at Tengiz in
Kazakhstan and Frade in Brazil. The impact of higher prices on
cost-recovery volumes and other contractual provisions decreased net
production from last year’s second quarter. The net liquids component of
production increased 4 percent from a year ago to 1.42 million barrels
per day and net natural gas production was up 3 percent to 3.70 billion
cubic feet per day.
DOWNSTREAM
U.S. Downstream
Three Months Six Months
Ended June 30 Ended June 30
------------ ------------
Millions of Dollars 2010 2009 2010 2009
--------------------- ------ ------ ------ ------
Earnings/(Loss) $433 $(51) $515 $85
--------------------- ------ ------ ------ ------
U.S. downstream operations earned $433 million in the second quarter
2010, compared with a loss of $51 million a year earlier. The increase
was due mainly to improved margins on refined products, a favorable
change in effects on derivative instruments and higher earnings from
chemicals operations -- primarily from the 50 percent-owned Chevron
Phillips Chemical Company LLC.
Refinery crude-input of 917,000 barrels per day in the second quarter
2010 decreased 6,000 barrels per day from the year-ago period.
Refined product sales of 1.41 million barrels per day were down 34,000
barrels per day from the second quarter of 2009, mainly due to lower jet
fuel and fuel oil sales. Branded gasoline sales decreased 5 percent to
605,000 barrels per day.
International Downstream
Three Months Six Months
Ended June 30 Ended June 30
------------ ------------
Millions of Dollars 2010 2009 2010 2009
---------------------------------- ------ ------ ------ ------
Earnings* $542 $182 $656 $799
---------------------------------- ------ ------ ------ ------
*Includes foreign currency effects $131 $(28) $35 $ (86)
International downstream operations earned $542 million in the second
quarter 2010, compared with earnings of $182 million a year earlier. The
increase was due mainly to a favorable change in effects on derivative
instruments. Foreign currency effects increased earnings by $131 million
in the 2010 quarter, compared with a reduction of $28 million a year
earlier.
Refinery crude-input of 954,000 barrels per day decreased 16,000 barrels
per day from the second quarter of 2009, mainly due to planned and
unplanned downtime. Total refined product sales of 1.78 million barrels
per day in the 2010 second quarter were 3 percent lower than a year
earlier, due mainly to lower sales of gas oil and fuel oil. Excluding
the impact of 2009 asset sales, sales volumes were down 2 percent
between periods.
ALL OTHER
Three Months Six Months
Ended June 30 Ended June 30
------------ ------------
Millions of Dollars 2010 2009 2010 2009
---------------------------------- ------ ------ ------ ------
Net Charges* $(108) $(43) $(476) $(337)
---------------------------------- ------ ------ ------ ------
*Includes foreign currency effects $ 3 $ 42 $ 3 $ 13
All Other consists of mining operations, power generation businesses,
worldwide cash management and debt financing activities, corporate
administrative functions, insurance operations, real estate activities,
alternative fuels and technology companies.
Net charges in the second quarter 2010 were $108 million, compared with
$43 million in the year-ago period. The change between periods was
mainly due to higher corporate charges. Foreign currency effects reduced
net charges by $3 million in the 2010 quarter, compared with a $42
million reduction in net charges last year.
CAPITAL AND EXPLORATORY EXPENDITURES
Capital and exploratory expenditures in the first six months of 2010
were $9.4 billion, compared with $11.4 billion in the corresponding 2009
period. The amounts included $609 million in 2010 and $577 million in
2009 for the company’s share of expenditures by affiliates, which did
not require cash outlays by the company. Outlays in the 2009 period
included $2 billion for the extension of an upstream concession.
Expenditures for upstream projects represented 88 percent of the
companywide total in 2010.
NOTICE
Chevron’s discussion of second quarter 2010 earnings with security
analysts will take place on Friday, July 30, 2010, 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
Web site at www.chevron.com
under the "Investors" section. Additional financial and operating
information will be contained in the Earnings Supplement that will be
available under "Events and Presentations" in the "Investors" section on
the Web site.
Chevron will post selected third quarter 2010 interim performance
data for the company and industry on its Web site on Tuesday, October
12, 2010, at 2:00 p.m. PDT. Interested parties may view this
interim data at www.chevron.com
under the "Investors" section.
CAUTIONARY STATEMENT RELEVANT TO FORWARD-LOOKING INFORMATION FOR
THE PURPOSE OF "SAFE HARBOR" PROVISIONS OF THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995
This press 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 such as "anticipates,"
"expects," "intends," "plans," "targets," "projects," "believes,"
"seeks," "schedules," "estimates," "budgets" 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, some 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 press 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
chemical margins; 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
equity affiliates; 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 net
production or manufacturing facilities or delivery/transportation
networks due to war, accidents, political events, civil unrest, severe
weather or crude oil production quotas that might be imposed by the
Organization of Petroleum Exporting Countries; the potential liability
for remedial actions or assessments under existing or future
environmental regulations and litigation; significant investment or
product changes under existing or future environmental statutes,
regulations and litigation; the potential liability resulting from other
pending or future litigation; the company’s future acquisition or
disposition of assets and gains and losses from asset dispositions or
impairments; government-mandated sales, divestitures, recapitalizations,
industry-specific taxes, changes in fiscal terms or restrictions on
scope of company operations; foreign currency movements compared with
the U.S. dollar; the effects of changed accounting rules under generally
accepted accounting principles promulgated by rule-setting bodies; and
the factors set forth under the heading "Risk Factors" on pages 30
through 32 of the company’s 2009 Annual Report on Form 10-K. In
addition, such statements could be affected by general domestic and
international economic and political conditions. Unpredictable or
unknown factors not discussed in this press release could also have
material adverse effects on forward-looking statements.
CHEVRON CORPORATION - FINANCIAL REVIEW Attachment 1
(Millions of Dollars, Except Per-Share Amounts)
CONSOLIDATED STATEMENT OF INCOME
--------------------------------------------------------------
(unaudited) Three Months Six Months
Ended June 30 Ended June 30
------------------------- -------------------------
REVENUES AND OTHER INCOME 2010 2009 2010 2009
--------- --------- --------- ---------
Sales and other operating revenues * $ 51,051 $ 39,647 $ 97,792 $ 74,634
Income from equity affiliates 1,650 735 2,885 1,346
Other income 303 (177) 506 355
--------- --------- --------- ---------
Total Revenues and Other Income 53,004 40,205 101,183 76,335
--------- --------- --------- ---------
COSTS AND OTHER DEDUCTIONS
Purchased crude oil and products 30,604 23,678 57,748 44,078
Operating, selling, general and administrative expenses 5,727 5,252 11,358 10,575
Exploration expenses 212 438 392 819
Depreciation, depletion and amortization 3,141 3,099 6,223 5,966
Taxes other than on income * 4,537 4,386 9,009 8,364
Interest and debt expense 17 6 37 14
--------- --------- --------- ---------
Total Costs and Other Deductions 44,238 36,859 84,767 69,816
--------- --------- --------- ---------
Income Before Income Tax Expense 8,766 3,346 16,416 6,519
Income tax expense 3,322 1,585 6,392 2,904
--------- --------- --------- ---------
Net Income 5,444 1,761 10,024 3,615
Less: Net income attributable to noncontrolling interests 35 16 63 33
--------- --------- --------- ---------
NET INCOME ATTRIBUTABLE TO
CHEVRON CORPORATION $ 5,409 $ 1,745 $ 9,961 $ 3,582
========= ========= ========= =========
PER-SHARE OF COMMON STOCK
Net Income Attributable to Chevron Corporation
- Basic $ 2.71 $ 0.88 $ 4.99 $ 1.80
- Diluted $ 2.70 $ 0.87 $ 4.97 $ 1.79
Dividends $ 0.72 $ 0.65 $ 1.40 $ 1.30
Weighted Average Number of Shares Outstanding (000’s)
- Basic 1,996,393 1,991,605 1,995,692 1,991,368
- Diluted 2,006,000 1,999,667 2,005,114 1,999,588
* Includes excise, value-added and similar taxes. $ 2,201 $ 2,034 $ 4,273 $ 3,944
CHEVRON CORPORATION - FINANCIAL REVIEW Attachment 2
(Millions of Dollars)
(unaudited)
EARNINGS BY MAJOR OPERATING AREA Three Months Six Months
---------------------------------------------------------------
Ended June 30 Ended June 30
----------------- -----------------------------
2010 2009 2010 2009
----- ----- ------- ------------
Upstream
United States $ 1,090 $ 280 $ 2,246 $ 307
International 3,452 1,377 7,020 2,728
----- ----- ------- ------------
Total Upstream 4,542 1,657 9,266 3,035
----- ----- ------- ------------
Downstream
United States 433 (51) 515 85
International 542 182 656 799
----- ----- ------- ------------
Total Downstream 975 131 1,171 884
----- ----- ------- ------------
All Other (1) (108) (43) (476) (337)
----- ----- ------- ------------
Total (2) $ 5,409 $ 1,745 $ 9,961 $ 3,582
===== ===== ======= ============
SELECTED BALANCE SHEET ACCOUNT June 30, 2010 Dec. 31, 2009
DATA
--------------------------------------------------------------- ------------- ------------------
Cash and Cash Equivalents $ 9,396 $ 8,716
Time Deposits (3) $ 3,753 $ -
Marketable Securities $ 66 $ 106
Total Assets $ 171,746 $ 164,621
Total Debt $ 10,473 $ 10,514
Total Chevron Corporation Stockholders’ Equity $ 99,569 $ 91,914
Three Months Six Months
Ended June 30 Ended June 30
----------------- -----------------------------
CAPITAL AND EXPLORATORY 2010 2009 2010 2009
EXPENDITURES (4)
--------------------------------------------------------------- ----- ----- ------- ------------
United States
Upstream $ 679 $ 802 $ 1,532 $ 1,827
Downstream 331 584 603 982
Other 68 87 102 156
----- ----- ------- ------------
Total United States 1,078 1,473 2,237 2,965
International
Upstream 3,743 3,203 6,772 7,945
Downstream 218 273 412 504
Other 4 - 4 1
----- ----- ------- ------------
Total International 3,965 3,476 7,188 8,450
----- ----- ------- ------------
Worldwide $ 5,043 $ 4,949 $ 9,425 $ 11,415
===== ===== ======= ============
(1) Includes mining operations, power generation businesses,
worldwide cash management and debt financing activities, corporate
administrative functions, insurance operations, real estate
activities, alternative fuels and technology companies.
(2) Net Income Attributable to Chevron Corporation (See Attachment 1)
(3) Bank time deposits with maturities greater than 90 days,
effective beginning first quarter 2010
(4) Includes interest in affiliates:
United States $ 71 $ 40 $ 154 $ 80
International 240 252 455 497
----- ----- ------- ------------
Total $ 311 $ 292 $ 609 $ 577
===== ===== ======= ============
CHEVRON CORPORATION - FINANCIAL REVIEW Attachment 3
Three Months Six Months
OPERATING STATISTICS Ended June 30 Ended June 30
(1)
------------------------------------------- ----------- ------------
NET LIQUIDS PRODUCTION (MB/D): (2) 2010 2009 2010 2009
-------------- ------ ------
United States 488 467 496 454
International 1,422 1,372 1,425 1,378
------ ----- ------ ------
Worldwide 1,910 1,839 1,921 1,832
====== ===== ====== ======
NET NATURAL GAS PRODUCTION (MMCF/D): (3)
United States 1,317 1,395 1,347 1,387
International 3,699 3,593 3,711 3,618
------ ----- ------ ------
Worldwide 5,016 4,988 5,058 5,005
====== ===== ====== ======
TOTAL NET OIL-EQUIVALENT PRODUCTION (MB/D): (4)
United States 708 700 721 686
International 2,038 1,970 2,043 1,981
------ ----- ------ ------
Worldwide 2,746 2,670 2,764 2,667
====== ===== ====== ======
SALES OF NATURAL GAS (MMCF/D):
United States 5,770 5,721 5,888 6,046
International 4,740 3,962 4,430 4,108
------ ----- ------ ------
Worldwide 10,510 9,683 10,318 10,154
====== ===== ====== ======
SALES OF NATURAL GAS LIQUIDS (MB/D):
United States 171 163 165 157
International 103 110 103 113
------ ----- ------ ------
Worldwide 274 273 268 270
====== ===== ====== ======
SALES OF REFINED PRODUCTS (MB/D):
United States 1,407 1,441 1,378 1,422
International (5) 1,775 1,821 1,751 1,890
------ ----- ------ ------
Worldwide 3,182 3,262 3,129 3,312
====== ===== ====== ======
REFINERY INPUT (MB/D):
United States 917 923 903 931
International 954 970 973 977
------ ----- ------ ------
Worldwide 1,871 1,893 1,876 1,908
====== ===== ====== ======
(1) Includes interest in affiliates.
(2) Includes: Canada - Synthetic Oil 16 26 20 25
Venezuela Affiliate - Synthetic Oil 29 26 29 27
(3) Includes natural gas consumed in operations (MMCF/D):
United States 63 56 65 57
International (6) 431 453 460 473
(4) Oil-equivalent production is the sum of net liquids production
and net gas 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): 541 504 542 497
(6) 2009 conformed with 2010 presentation
SOURCE: Chevron Corporation
Chevron Corporation
Alex Yelland, 925-842-0456
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