Chevron Reports $6.5B in 1Q 2012

Chevron Corporation reported earnings of $6.5 billion ($3.27 per share – diluted) for the first quarter 2012, compared with $6.2 billion in the 2011 first quarter.

Sales and other operating revenues in the first quarter 2012 were $59 billion, compared to $58 billion in the year-ago period.

"In the first quarter, we continued to post strong earnings and healthy cash flows," said Chairman and CEO John Watson. "This has enabled us to both reward our shareholders with a substantial dividend increase, our third in just over a year, and to reinvest in profitable growth projects to help meet rising global energy demand. Our key development projects remain on track to deliver compelling volume growth over the next five years." Watson continued, "New production is coming on as planned, and we continue to see strong customer interest in our Australia LNG projects that underpin our future growth."

Important recent upstream milestones include:

  • Nigeria – First production at the deepwater Usan project.
  • United States – First production at the Caesar/Tonga project in the deepwater Gulf of Mexico.
  • Australia – Signing a nonbinding Heads of Agreement with Japan's Chubu Electric for Wheatstone LNG, bringing the total amount of Chevron's equity LNG covered by long-term agreements for this major project to more than 70 percent.

The company's Board of Directors approved an 11.1 percent increase in the quarterly dividend, to $0.90 per share, payable in June 2012. The company purchased $1.25 billion of its common stock in the first quarter 2012 under its share repurchase program.

Worldwide net oil-equivalent production was 2.63 million barrels per day in the first quarter 2012, down from 2.76 million barrels per day in the 2011 first quarter. Production increases from project ramp-ups in Thailand and the United States were more than offset by normal field declines, maintenance-related downtime and dispositions.

U.S. upstream earnings of $1.53 billion in the first quarter 2012 were up $80 million from a year earlier. The benefit of higher crude oil realizations was partly offset by lower production and lower natural gas realizations.

The company's average sales price per barrel of crude oil and natural gas liquids was $102 in the first quarter 2012, up from $89 a year ago. The average sales price of natural gas was $2.48 per thousand cubic feet, compared with $4.04 in last year's first quarter.

Net oil-equivalent production of 651,000 barrels per day in the first quarter 2012 was down 43,000 barrels per day, or 6 percent, from a year earlier. The decrease in production was associated with normal field declines and an absence of volumes associated with the Cook Inlet, Alaska, asset sale in 2011. Partially offsetting this decrease was further ramp-up at the Perdido project in the Gulf of Mexico. The net liquids component of oil-equivalent production decreased 5 percent in the 2012 first quarter to 456,000 barrels per day, while net natural gas production decreased 8 percent to 1.17 billion cubic feet per day.

International upstream earnings of $4.64 billion increased $114 million from the first quarter 2011. Higher realizations for crude oil and natural gas increased earnings between quarters. This benefit was partly offset by higher tax expenses, lower volumes, and higher operating and exploration expenses. Foreign currency effects decreased earnings by $208 million, compared with a decrease of $116 million a year earlier.

The average sales price for crude oil and natural gas liquids in the 2012 first quarter was $110 per barrel, up from $95 a year earlier. The average price of natural gas was $5.88 per thousand cubic feet, compared with $5.03 in last year's first quarter.

Net oil-equivalent production of 1.98 million barrels per day in the first quarter 2012 was down 86,000 barrels per day from a year ago. Production increases from a project ramp-up in Thailand were more than offset by maintenance-related downtime and normal field declines. The net liquids component of oil-equivalent production decreased 6 percent to 1.34 million barrels per day, while net natural gas production increased 1 percent to 3.85 billion cubic feet per day.

Capital and Exploratory Expenditures

Capital and exploratory expenditures in the first quarter 2012 were $6.4 billion, compared with $5.0 billion in the corresponding 2011 period. The amounts included approximately $350 million in 2012 and $200 million in 2011 for the company's share of expenditures by affiliates, which did not require cash outlays by the company. Expenditures for upstream represented 92 percent of the companywide total in 2012.

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