Chevron Gains In Earnings Based On Increase In Prices

Chevron Corporation reported in its interim update for the first quarter 2008 that upstream earnings are expected to benefit from an increase in prices for crude oil and natural gas from the fourth quarter 2007. Corporate and other charges are anticipated to be higher between periods. Additionally, foreign exchange effects are expected to have a more adverse impact on first quarter results than in the fourth quarter 2007.

The interim update contains certain industry and company operating data for the first quarter 2008. The production volumes, realizations, margins and certain other 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 May 2, 2008. The reader should not place undue reliance on this data.

Unless noted otherwise, all commentary is based on two months of the first quarter 2008 vs. full fourth quarter 2007 results.

U.S. liquids production declined about 3 percent during the first two months of the first quarter due to various minor operational issues, scheduled maintenance and weather related shut-ins. International liquids production volumes declined by nearly 5 percent during the first two months, partially due to lower entitlement volumes from production-sharing contracts. Based on preliminary information, full first quarter international liquids liftings are expected to be lower than production due to the timing of cargoes. International gas production increased about 11 percent reflecting a favorable unitization adjustment in Indonesia.

U.S. crude oil realizations rose $5.17 per barrel to $86.74 while international liquids realizations averaged $83.36 per barrel, up nearly $3 per barrel from the fourth quarter. U.S. natural gas realizations of $7.03 per thousand cubic feet were up $0.95, consistent with the increases in "bid week" average prices.