Chevron Reports Biggest Quarterly Earnings Ever

U.S. supermajor Chevron has reported earnings of $11.6 billion for the second quarter of 2022 – the biggest quarterly earnings ever, compared with $3.1 billion in the second quarter of 2021.

Chevron said that foreign currency effects increased earnings by $668 million. Adjusted earnings of $11.4 billion in the second quarter of 2022 compared to adjusted earnings of $3.3 billion in the second quarter of 2021. Sales and other operating revenues in the second quarter of 2022 were $65 billion, compared to $36 billion in the year-ago period.

“Second quarter financial performance improved as we delivered a return on capital employed of 26 percent,” said Mike Wirth, Chevron’s chairman and chief executive officer.

The company also strengthened its balance sheet, lowering its debt ratio to under 15 percent, and increased the top end of its annual share repurchase guidance range to $15 billion.

“We more than doubled investment compared to last year to grow both traditional and new energy business lines,” Wirth added. “With Permian production more than 15 percent higher than a year ago and now as one of the leading renewable fuel producers in the United States, Chevron is increasing energy supplies to help meet the challenges facing global markets,” Wirth concluded.

During the second quarter, the company sanctioned the Ballymore project in the deepwater U.S. Gulf of Mexico, which is expected to require a gross investment of approximately $1.6 billion. The field is planned to be produced through an existing facility with an allocated capacity of 75,000 barrels of crude oil per day.

As for upstream operations, worldwide net oil-equivalent production was 2.90 million barrels per day in the second quarter of 2022. International production decreased 13 percent primarily due to the end of concessions in Thailand and Indonesia, while U.S. production increased 3 percent compared to the same period a year ago mainly in the Permian Basin.

U.S. upstream operations earned $3.37 billion in the second quarter of 2022, compared with $1.45 billion a year earlier. The improvement was primarily due to higher realizations, partially offset by higher operating expenses largely due to early contract termination.

The company’s average sales price per barrel of crude oil and natural gas liquids was $89 in the second quarter of 2022, up from $54 a year earlier. The average natural gas sales price was $6.22 per thousand cubic feet in the second quarter of 2022, up from $2.16 in last year’s second quarter.

Net oil-equivalent production of 1.17 million barrels per day in the second quarter of 2022 was up 36,000 barrels per day from a year earlier. The increase was primarily due to net production increases in the Permian Basin.

Cash flow from operations in the first six months of 2022 was $21.8 billion, compared with $11.2 billion in 2021. Excluding working capital effects, cash flow from operations in the first six months of 2022 was $22.2 billion, compared with $12.2 billion in 2021.

Capex, including equity affiliates in the first six months of 2022 was $6.7 billion, compared with $5.3 billion in 2021. The amounts included $1.5 billion in 2022 and $1.5 billion in 2021 for the company’s share of expenditures by affiliates, which did not require cash outlays by the company. Expenditures for upstream represented 79 percent of the company-wide total in 2022. 

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