Chevron Reports on Interim Upstream Earnings for 2Q 2008

In its interim update for the second quarter 2008, Chevron Corporation reported that upstream earnings are expected to benefit from an increase in prices for crude oil and natural gas while downstream earnings are expected to be significantly lower than the first quarter. Additionally, "all other" charges are anticipated to be substantially higher compared with the first quarter.

U.S. liquids production was essentially unchanged during the first two months of the second quarter, while international liquids production declined about 2 percent. The increase in crude oil prices during this period reduced the company’s production under cost-recovery and variable-royalty provisions of certain international production contracts. U.S. natural gas production decreased nearly 5 percent primarily due to operational downtime and natural field declines. International natural gas production decreased about 3 percent, reflecting the absence of the first quarter’s favorable unitization adjustment in Indonesia.

U.S. crude oil realizations rose more than $19 per barrel to $109.19. International liquids realizations averaged $106.14 per barrel, up about $20 per barrel from the first quarter. U.S. natural gas realizations increased $1.87 to $9.42 per thousand cubic feet, while international natural gas realizations rose $0.63 to $5.46 per thousand cubic feet.