OIL & GAS

Chevron records $4.3 billion in Q2

&NewLine;<p>Included&NewLine;in the current quarter were earnings of&nbsp&semi;&dollar;740 million&nbsp&semi;associated with&NewLine;the Anadarko merger termination fee and a non-cash tax benefit of&nbsp&semi;&dollar;180&NewLine;million&nbsp&semi;related to a reduction in the&nbsp&semi;Alberta&comma; Canada&nbsp&semi;corporate&NewLine;income tax rate&period; Foreign currency effects increased earnings in the 2019 second&NewLine;quarter by&nbsp&semi;&dollar;15 million&period;<&sol;p>&NewLine;&NewLine;&NewLine;&NewLine;<p>Sales and&NewLine;other operating revenues in second quarter 2019 were&nbsp&semi;&dollar;36 billion&comma; compared&NewLine;to&nbsp&semi;&dollar;40 billion&nbsp&semi;in the year-ago period&period;<&sol;p>&NewLine;&NewLine;&NewLine;&NewLine;<p>A&NewLine;statement by the oil giant&comma; made available to OpenLife stated that &OpenCurlyDoubleQuote;Second&NewLine;quarter earnings and cash flow benefited from record quarterly production&NewLine;volumes and the receipt of the Anadarko merger termination fee&comma; partially&NewLine;offset by the impact of lower oil and gas prices&comma;” said&nbsp&semi;Michael Wirth&comma;&NewLine;Chevron’s chairman of the board and chief executive officer&period;<&sol;p>&NewLine;&NewLine;&NewLine;&NewLine;<p>&nbsp&semi;&&num;8220&semi;Net oil-equivalent production was the&NewLine;highest in the company&&num;8217&semi;s history&comma; driven by continued growth in&NewLine;the&nbsp&semi;Permian Basin&nbsp&semi;and at Wheatstone in&nbsp&semi;Australia&period;&&num;8221&semi;<&sol;p>&NewLine;&NewLine;&NewLine;&NewLine;<p>&OpenCurlyDoubleQuote;Our&NewLine;strong financial and operational results reflect consistent execution&comma; allowing&NewLine;us to pay our dividend&comma; fund our attractive capital program&comma; further strengthen&NewLine;our balance sheet and return surplus cash to our shareholders&period; After suspending&NewLine;our share repurchases while in merger discussions with Anadarko&comma; we resumed buybacks&NewLine;in May and expect to be at our planned repurchase rate of&nbsp&semi;&dollar;5&NewLine;billion&nbsp&semi;per year in the third quarter&comma;” Wirth added&period;<&sol;p>&NewLine;&NewLine;&NewLine;&NewLine;<p>&&num;8220&semi;We&NewLine;continue to high-grade our portfolio and made progress on our three-year target&NewLine;of&nbsp&semi;&dollar;5-10 billion&nbsp&semi;of asset sale proceeds&period; During the quarter&comma; we&NewLine;executed a sales agreement for our&nbsp&semi;U&period;K&period; Central North Sea&nbsp&semi;upstream&NewLine;assets&comma; which we expect to close later this year&period; We also completed the&NewLine;acquisition of the&nbsp&semi;Pasadena refinery&nbsp&semi;in&nbsp&semi;Texas&comma; which will enable&NewLine;us to supply more of our retail market with&nbsp&semi;Chevron-produced products and&NewLine;process more domestic light crude oil&comma;&&num;8221&semi; Wirth said&period;<&sol;p>&NewLine;&NewLine;&NewLine;&NewLine;<p>Additionally&comma;&nbsp&semi;Chevron&NewLine;Phillips Chemical Company LLC&comma; the company&&num;8217&semi;s 50 percent-owned affiliate&comma;&NewLine;recently announced plans to jointly develop petrochemical projects in&NewLine;the&nbsp&semi;U&period;S&period; Gulf Coast&nbsp&semi;and&nbsp&semi;Qatar&nbsp&semi;with start-ups expected in&NewLine;2024 and 2025&comma; respectively&period;<&sol;p>&NewLine;&NewLine;&NewLine;&NewLine;<p>The&NewLine;company also recently entered into agreements to invest in renewable natural&NewLine;gas plants in&nbsp&semi;California&nbsp&semi;and to purchase renewable power&NewLine;in&nbsp&semi;Texas&nbsp&semi;for its&nbsp&semi;Permian Basin&nbsp&semi;operations&period;<&sol;p>&NewLine;&NewLine;&NewLine;&NewLine;<p><strong>UPSTREAM<&sol;strong><&sol;p>&NewLine;&NewLine;&NewLine;&NewLine;<p>Worldwide&NewLine;net oil-equivalent production was 3&period;08 million barrels per day in second&NewLine;quarter 2019&comma; an increase of 9 percent from 2&period;83 million barrels per day from a&NewLine;year ago&period;<&sol;p>&NewLine;&NewLine;&NewLine;&NewLine;<p>U&period;S&period;&NewLine;upstream operations earned&nbsp&semi;&dollar;896 million&nbsp&semi;in second quarter 2019&comma;&NewLine;compared with&nbsp&semi;&dollar;838 million&nbsp&semi;a year earlier&period; The increase was primarily&NewLine;due to higher crude oil production&comma; partially offset by lower crude oil and&NewLine;natural gas realizations&comma; higher operating and depreciation expenses primarily&NewLine;related to increase Permian activity&comma; and higher tax items&period;<&sol;p>&NewLine;&NewLine;&NewLine;&NewLine;<p>The&NewLine;company’s average sales price per barrel of crude oil and natural gas liquids&NewLine;was&nbsp&semi;&dollar;52&nbsp&semi;in second quarter 2019&comma; down from&nbsp&semi;&dollar;59a year earlier&period; The&NewLine;average sales price of natural gas was&nbsp&semi;&dollar;0&period;68&nbsp&semi;per thousand cubic feet&NewLine;in second quarter 2019&comma; down from&nbsp&semi;&dollar;1&period;61in last year’s second quarter&period;<&sol;p>&NewLine;&NewLine;&NewLine;&NewLine;<p>Net&NewLine;oil-equivalent production of 898&comma;000 barrels per day in second quarter 2019 was&NewLine;up 159&comma;000 barrels per day from a year earlier&period; Production increases from shale&NewLine;and tight properties in the&nbsp&semi;Permian&NewLine;Basin&nbsp&semi;in&nbsp&semi;Texas&nbsp&semi;and&nbsp&semi;New Mexico&comma; and base business in the&NewLine;Gulf of&nbsp&semi;Mexico&comma; were partially offset by normal field declines&period; The net&NewLine;liquids component of oil-equivalent production in second quarter 2019 increased&NewLine;23 percent to 710&comma;000 barrels per day&comma; while net natural gas production&NewLine;increased 15 percent to 1&period;13 billion cubic feet per day&comma; compared to last year&&num;8217&semi;s&NewLine;second quarter&period;<&sol;p>&NewLine;&NewLine;&NewLine;&NewLine;<p>Second&NewLine;quarter unconventional production in the&nbsp&semi;Permian Basin&nbsp&semi;was 421&comma;000&NewLine;barrels per day&comma; representing growth of over 50 percent compared to a year ago&comma;&NewLine;as the company continues to invest in high return opportunities in this key&NewLine;region&period;<&sol;p>&NewLine;&NewLine;&NewLine;&NewLine;<p>International&NewLine;upstream operations earned&nbsp&semi;&dollar;2&period;59 billion&nbsp&semi;in second quarter 2019&comma;&NewLine;compared with&nbsp&semi;&dollar;2&period;46 billion&nbsp&semi;a year ago&period; The increase in earnings was&NewLine;mostly due to higher natural gas sales volumes&comma; tax benefits mostly associated&NewLine;with a reduction in the&nbsp&semi;Alberta&comma; Canada&nbsp&semi;corporate income tax rate&comma; lower&NewLine;operating expenses&comma; and higher gains on asset sales&period; Partially offsetting these&NewLine;effects were lower crude oil and natural gas realizations&period; Foreign currency&NewLine;effects had an unfavorable impact on earnings of&nbsp&semi;&dollar;195 million&nbsp&semi;between&NewLine;periods&period;<&sol;p>&NewLine;&NewLine;&NewLine;&NewLine;<p>The&NewLine;average sales price for crude oil and natural gas liquids in second quarter&NewLine;2019 was&nbsp&semi;&dollar;62&nbsp&semi;per barrel&comma; down from&nbsp&semi;&dollar;68&nbsp&semi;a year earlier&period; The&NewLine;average sales price of natural gas was&nbsp&semi;&dollar;5&period;43&nbsp&semi;per thousand cubic feet&NewLine;in the quarter&comma; compared with&nbsp&semi;&dollar;5&period;64&nbsp&semi;in last year’s second quarter&period;<&sol;p>&NewLine;&NewLine;&NewLine;&NewLine;<p>Net&NewLine;oil-equivalent production of 2&period;19 million barrels per day in second quarter&NewLine;2019 was up 99&comma;000 barrels per day from a year earlier&period; Production increases&NewLine;from Wheatstone and other major capital projects&comma; base business&comma; and shale and&NewLine;tight properties&comma; were partially offset by normal field declines and the effect&NewLine;of asset sales&period; The net liquids component of oil-equivalent production was&NewLine;relatively flat at 1&period;15 million barrels per day in the 2019 second quarter&comma;&NewLine;while net natural gas production increased 10 percent to 6&period;20 billion cubic&NewLine;feet per day&comma; compared to last year&&num;8217&semi;s second quarter&period;<&sol;p>&NewLine;&NewLine;&NewLine;&NewLine;<p><strong>CAPITAL&NewLine;AND EXPLORATORY EXPENDITURES<&sol;strong><&sol;p>&NewLine;&NewLine;&NewLine;&NewLine;<p>Capital&NewLine;and exploratory expenditures in the first six months of 2019 were&nbsp&semi;&dollar;10&period;0&NewLine;billion&comma; compared with&nbsp&semi;&dollar;9&period;2 billion&nbsp&semi;in the corresponding 2018 period&period;&NewLine;The amounts included&nbsp&semi;&dollar;3&period;1 billion&nbsp&semi;in 2019 and&nbsp&semi;&dollar;2&period;7&NewLine;billion&nbsp&semi;in 2018 for the company’s share of expenditures by affiliates&comma;&NewLine;which did not require cash outlays by the company&period; Expenditures for upstream&NewLine;represented 85 percent of the companywide total in 2019&period; Included in 2019&NewLine;were&nbsp&semi;&dollar;0&period;4 billion&nbsp&semi;of inorganic expenditures&comma; primarily associated&NewLine;with the acquisition of the&nbsp&semi;Pasadena refinery&nbsp&semi;in&nbsp&semi;Texas&period;<&sol;p>&NewLine;

Openlife Reporter

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