Chevron Issues Interim Update for Second Quarter 2007


Chevron Corporation (NYSE: CVX) has issued its interim update for the second quarter of 2007. The company expects second quarter results to benefit from higher commodity prices in Upstream, stronger refining margins in Downstream and a gain on the sale of its interest in Dynegy, partially offset by net charges related to the redemption of debt and other corporate items.

The interim update contains certain industry and company operating data for the second quarter. The production volumes, realizations, margins, and other identified items in the report are based on a portion of the quarter and are not necessarily indicative of Chevron's quarterly results to be reported on July 27, 2007. The reader should not place undue reliance on this data. Unless noted otherwise, all commentary is based on two months of the second quarter 2007 vs. full first quarter 2007 results.


The table that follows includes information on production and price indicators for crude oil and natural gas for specific markets. Actual realizations may vary from indicative pricing due to quality and location differentials and the effect of pricing lags. International results are driven by actual liftings, which may differ from production due to the timing of cargoes and other factors.

                                          2006                2007
                                    2Q     3Q    4Q     1Q  2Q thru 2Q thru
                                                              May     Jun

    U.S. Upstream

    Net Production:
      Liquids                MBD    463    464   466    462     470     n/a

      Natural Gas          MMCFD  1,832  1,846 1,782  1,723   1,714     n/a

      BOE                  MBOED    768    772   763    749     755     n/a

      Avg. WTI Spot
       Price               $/Bbl  70.57  70.56 59.98  58.09   63.70   64.96

      Avg. Midway
       Sunset Posted
       Price               $/Bbl  58.71  59.08 48.20  47.08   53.78   55.18

      Nat. Gas-Henry
       Hub. "Bid Week"
       Avg.                $/MCF   6.81   6.58  6.56   6.80    7.54    7.56

      Nat. Gas-CA
       Border "Bid
       Week" Avg.          $/MCF   5.65   6.09  5.82   6.66    6.68    6.85

      Nat. Gas -Rocky
       Mountain "Bid
       Week" Avg.          $/MCF   5.26   5.31  4.67   5.40    3.96    3.72

    Average Realizations:

      Crude                $/Bbl  62.30  63.98 52.98  51.60   57.62     n/a

      Liquids              $/Bbl  60.07  61.99 51.06  49.91   56.07     n/a

      Natural Gas          $/MCF   5.89   5.93  5.90   6.40    6.56     n/a

      Exploration Expense $MM, B/T   86     76   163    142     n/a     n/a

    International Upstream

    Net Production:
      Liquids                MBD  1,239  1,267 1,346  1,317   1,315     n/a

      Other Produced
       Volumes               MBD    123    141    35     32      30     n/a

        Total                MBD  1,362  1,408 1,381  1,349   1,345     n/a

      Natural Gas          MMCFD  3,234  3,119 3,067  3,271   3,336     n/a

      BOE - incl. Other
       Volumes             MBOED  1,901  1,928 1,892  1,894   1,901     n/a

      Avg. Brent
       Spot Price          $/Bbl  69.39  69.72 59.44  58.26   67.54   68.73

    Average Realizations:
      Liquids              $/Bbl  62.24  61.90 51.77  51.15   59.92     n/a

      Natural Gas          $/MCF   3.82   3.66  3.67   3.85    3.70     n/a

    Exploration Expense   $MM, B/T  179    208   384    164     n/a     n/a

U.S. oil-equivalent production increased 1 percent from the first quarter, as volumes restored from downtime associated with third-party pipeline disruptions were partially offset by a combination of scheduled maintenance and other downtime in the Gulf of Mexico, which continued in June. International oil-equivalent production also rose slightly from the first quarter.

U.S. crude realizations improved by $6.02 per barrel - in line with the increase in WTI and California heavy crude prices. International liquids realizations increased $8.77 per barrel, consistent with the increase in Brent spot prices. In June, benchmark pricing continued to rise worldwide.

U.S. natural gas realizations increased $0.16 per thousand cubic feet, while bid week pricing was mixed, with Henry Hub increasing and Rocky Mountain decreasing.

International Upstream results are expected to include charges of approximately $100 million for write-offs associated with exploratory wells and other assets.


The table that follows includes industry benchmark indicators for refining and marketing margins. Actual margins realized by the company may differ significantly due to location and product mix effects, planned and unplanned shutdown activity and other company-specific and operational factors.

2006 2007 2Q 3Q 4Q 1Q 2Q thru 2Q thru May Jun Downstream Market Indicators $/Bbl Refining Margins USWC - ANS 5-3-1-1 29.06 19.36 20.55 26.69 33.30 30.28 USGC LHD - Avg of Mogas + Dist, less Fuel Oil 37.04 34.10 27.58 28.85 38.24 37.17 Singapore - Dubai 3-1-1-1 8.77 4.07 1.96 5.79 9.19 8.87 N.W. Europe - Brent 3-1-1-1 1.65 (0.22) (2.06) (0.53) 2.97 2.08 Marketing Margins U.S. West - LA Mogas DTW to Spot 1.65 11.08 4.32 2.63 4.57 5.12 U.S. East - Houston Mogas Rack to Spot 4.96 7.31 4.64 5.21 3.68 3.99 Asia-Pacific / Middle East / Africa 3.27 4.42 5.91 4.39 3.27 n/a United Kingdom 5.70 7.31 4.89 4.98 5.05 n/a Latin America 5.28 5.92 5.84 6.08 7.22 n/a Actual Volumes: U.S. Refinery Input MBD 935 967 916 729 943 n/a Int'l Refinery Input MBD 1,063 1,055 987 1,070 918 n/a U.S. Branded Mogas Sales MBD 613 625 622 622 628 n/a

U.S. refinery crude-input volumes increased about 30 percent on completion of the first quarter's turnaround at the company's Richmond, California, refinery. In June, an extensive planned turnaround of a crude distillation unit at the company's El Segundo, California refinery was initiated. The unit was out-of-service for the entire month of June and work continues into the third quarter. Due to inventory on hand, product supplies to customers were uninterrupted during the maintenance outage. Outside the United States, refinery input volumes declined, largely on the sale of the Nerefco Refinery at the end of the first quarter and a planned turnaround at the Yeosu Refinery in South Korea.

The U.S. West Coast industry refining indicator improved by about $3.60 per barrel during the three months of the second quarter; however, the company did not fully benefit from the increase because of the downtime at the El Segundo Refinery that began in June. The U.S. Gulf Coast light-heavy-differential marker averaged about $8.30 per barrel higher in the full second quarter. Outside the United States, benchmark refining margins were also higher. However, for the first two months of the quarter, actual refining margins realized were lower than indicator margins.

During the full second quarter, the Los Angeles mogas marketing margin indicator improved by about $2.50 per barrel, while the Houston mogas indicator declined by about $1.20 per barrel. For the first two months of the quarter, actual marketing margins realized in the United States were lower than indicator margins reflecting different product and location mix effects. Outside the United States, indicative marketing margins were mixed.

Downstream results for the second quarter will include charges for environmental remediation items in excess of $50 million.