Chevron's January-February Results Concern Investors

Chevron Corp. said Wednesday its oil production and refining-business activity was lower in the first two months of 2013 than the full first quarter of 2012 because of widespread maintenance issues.

Chevron, the second-largest U.S. oil company in market value after Exxon Mobil Corp., produced 2.636 million barrels a day of oil and natural gas in January and February, essentially flat with its production in the entire first quarter of 2012, according to the company's interim earnings report.

Meanwhile, the first two months of this year featured lower global oil production, oil prices and fuel sales than in the first three months of last year, analysts now expect the oil company to post flat earnings for the first quarter.

Shares fell 0.3% to $119.32 in after-hours trading.

Chevron said its global oil production for the first two months of 2013 averaged 1.754 million barrels a day, down from a daily output of 1.794 barrels in the first full quarter of 2012. U.S. oil prices in January and February dropped 7.7% from the first quarter of 2012 to an average of $94.07 a barrel, and international oil prices shed 5.2% to fall to $104.27, Chevron said.

Realized U.S. natural-gas prices averaged $3.06 per thousand cubic feet in the first two months of this year, up from $2.48 in the 2012 first quarter but down from $3.22 in the fourth quarter. Natural-gas prices outside the U.S. averaged $6.03 in January and February, up from $5.88 in last year's first quarter.

Over all, Chevron is "looking at flatish earnings" for the first quarter, Oppenheimer & Co. senior analyst Fadel Gheit said.

Unlike in the fourth quarter, Chevron may not be able to count on its fuel-refining business to make up for any shortfalls in its oil and natural-gas business. Chevron experienced a major cut in its fuel production business because of maintenance at its refineries, including planned maintenace at its refinery in Pascagoula, Miss., and repairs at its refinery in Richmond, Calif., that was damaged in an August fire.

Chevron said its refineries processed 1.41 million barrels a day of oil during the first two months of 2013, down from 1.7 million barrels a day in the first quarter of 2012. U.S. gasoline sales were 491,000 barrels a day through Febuary, down 2.8% from last year's first quarter, Chevron said.

Chevron is slated to report full first-quarter results April 26.

Through Wednesday's close, the stock was up 11% since the start of the year.

Kristin Jones contributed to this article.

Copyright (c) 2012 Dow Jones & Company, Inc.


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