<p>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.</p>



<p>Sales and
other operating revenues in second quarter 2019 were ;$36 billion, compared
to ;$40 billion ;in the year-ago period.</p>



<p>A
statement by the oil giant, made available to OpenLife stated that “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.</p>



<p> ;&#8220;Net oil-equivalent production was the
highest in the company&#8217;s history, driven by continued growth in
the ;Permian Basin ;and at Wheatstone in ;Australia.&#8221;</p>



<p>“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.</p>



<p>&#8220;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,&#8221; Wirth said.</p>



<p>Additionally, ;Chevron
Phillips Chemical Company LLC, the company&#8217;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.</p>



<p>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.</p>



<p><strong>UPSTREAM</strong></p>



<p>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.</p>



<p>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 increase Permian activity, and higher tax items.</p>



<p>The
company’s average sales price per barrel of crude oil and natural gas liquids
was ;$52 ;in second quarter 2019, down from ;$59a year earlier. The
average sales price of natural gas was ;$0.68 ;per thousand cubic feet
in second quarter 2019, down from ;$1.61in last year’s second quarter.</p>



<p>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&#8217;s
second quarter.</p>



<p>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.</p>



<p>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.</p>



<p>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.</p>



<p>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&#8217;s second quarter.</p>



<p><strong>CAPITAL
AND EXPLORATORY EXPENDITURES</strong></p>



<p>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.</p>

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