Chevron Corporation (NYSE:CVX) today reported a loss of $725
million ($0.39 per share – diluted) for first quarter 2016,
compared with earnings of $2.6 billion ($1.37 per share – diluted)
in the 2015 first quarter. Foreign currency effects decreased
earnings in the 2016 quarter by $319 million, compared with an
increase of $580 million a year earlier.
Sales and other operating revenues in first quarter 2016 were
$23 billion, compared to $32 billion in the year-ago period.
Earnings Summary
Three MonthsEnded March
31
Millions of dollars
2016 2015
Earnings by business segment Upstream $ (1,459 ) $ 1,560
Downstream 735 1,423 All Other (1 )
(416 )
Total (1)(2) $
(725 ) $ 2,567 (1)
Includes foreign currency effects $ (319 ) $ 580 (2) Net income
(loss) attributable to Chevron Corporation (See Attachment 1)
“First quarter results declined from a year ago,” said Chairman
and CEO John Watson. “Our Upstream business was impacted by a more
than 35 percent decline in crude oil prices. Our Downstream
operations continued to perform well, although overall industry
conditions and margins this quarter were weaker than a year
ago.”
“Our efforts are focused on improving free cash flow,” Watson
stated. “We are controlling our spend and getting key projects
under construction online, which will boost revenues. We announced
first LNG production and first cargo shipment from Train 1 at the
Gorgon Project in March. Production from the Angola LNG plant is
imminent and a cargo shipment is expected in May. Earlier in the
year, we started up production at the Chuandongbei Project in
China, and we continue to ramp up production in the Permian Basin
and elsewhere.”
“We continue to lower our cost structure with better pricing,
work flow efficiencies and matching our organizational size to
expected future activity levels,” Watson added. “Our capital
spending is coming down. We are moving our focus to high-return,
shorter-cycle projects and pacing longer-cycle investments.”
UPSTREAM
Worldwide net oil-equivalent production was 2.67 million barrels
per day in first quarter 2016, compared with 2.68 million barrels
per day in the 2015 first quarter. Production increases from
project ramp-ups in the United States, Nigeria and other areas, and
production entitlement effects in several locations, were offset by
the Partitioned Zone shut-in and normal field declines.
U.S. Upstream
Three MonthsEnded March
31
Millions of Dollars
2016 2015
Earnings $ (850 ) $ (460 )
U.S. upstream operations incurred a loss of $850 million in
first quarter 2016 compared to a loss of $460 million from a year
earlier. The decrease was due to lower crude oil and natural gas
realizations, partially offset by lower operating expenses.
The company’s average sales price per barrel of crude oil and
natural gas liquids was $26 in first quarter 2016, down from $43 a
year ago. The average sales price of natural gas was $1.32 per
thousand cubic feet, compared with $2.27 in last year’s first
quarter.
Net oil-equivalent production of 701,000 barrels per day in
first quarter 2016 was up 2,000 barrels per day from a year
earlier. Production increases due to project ramp-ups in the Gulf
of Mexico, the Marcellus Shale in western Pennsylvania, and the
Permian Basin in Texas and New Mexico were mostly offset by
maintenance-related downtime in the Gulf of Mexico, normal field
declines and the effect of asset sales. The net liquids component
of oil-equivalent production in first quarter 2016 was essentially
unchanged at 490,000 barrels per day, while net natural gas
production increased 1 percent to 1.27 billion cubic feet per
day.
International Upstream
Three MonthsEnded March
31
Millions of Dollars
2016 2015
Earnings* $ (609 ) $ 2,020 *Includes foreign
currency effects $ (298 ) $ 522
International upstream operations incurred a loss of $609
million in first quarter 2016 compared with earnings of $2.02
billion a year earlier. The decrease was due to lower crude oil and
natural gas realizations, the absence of a first quarter 2015
reduction in statutory tax rates in the United Kingdom, and lower
gains on asset sales. Partially offsetting these effects were
higher liftings and lower exploration expenses. Foreign currency
effects decreased earnings by $298 million in the 2016 quarter,
compared with an increase of $522 million a year earlier.
The average sales price for crude oil and natural gas liquids in
first quarter 2016 was $29 per barrel, down from $46 a year
earlier. The average price of natural gas was $3.91 per thousand
cubic feet, compared with $5.01 in last year’s first quarter.
Net oil-equivalent production of 1.97 million barrels per day in
first quarter 2016 decreased 17,000 barrels per day, or 1 percent,
from a year ago. Production increases from project ramp-ups in
Nigeria and other areas, and production entitlement effects in
several locations, were more than offset by the Partitioned Zone
shut-in and normal field declines. The net liquids component of
oil-equivalent production decreased 2 percent to 1.29 million
barrels per day in the 2016 first quarter, while net natural gas
production was essentially unchanged at 4.04 billion cubic feet per
day.
DOWNSTREAM
U.S. Downstream
Three MonthsEnded March
31
Millions of Dollars
2016 2015
Earnings $ 247 $ 706
U.S. downstream operations earned $247 million in first quarter
2016 compared with earnings of $706 million a year earlier. The
decrease was primarily due to lower margins on refined products, an
asset impairment, higher operating expenses primarily due to
planned turnaround activity in first quarter 2016, and lower
earnings from the 50 percent-owned Chevron Phillips Chemical
Company LLC.
Refinery crude oil input in first quarter 2016 increased 4
percent to 957,000 barrels per day from the year-ago period.
Refined product sales of 1.21 million barrels per day were
unchanged from first quarter 2015. Branded gasoline sales of
510,000 barrels per day were up 1 percent from the 2015 period.
International Downstream
Three MonthsEnded March
31
Millions of Dollars
2016 2015 Earnings*
$ 488 $ 717 *Includes foreign currency effects
$ (48 ) $ 54
International downstream operations earned $488 million in first
quarter 2016 compared with $717 million a year earlier. The
decrease was primarily due to lower margins on refined product
sales, partially offset by lower operating expenses and a favorable
change in effects on derivative instruments. Foreign currency
effects decreased earnings by $48 million in first quarter 2016,
compared with an increase of $54 million a year earlier.
Refinery crude oil input of 795,000 barrels per day in first
quarter 2016 increased 13,000 barrels per day from the year-ago
period, mainly due to lower turnaround activity, partially offset
by the divestment of Caltex Australia Limited.
Total refined product sales of 1.44 million barrels per day in
first quarter 2016 were down 144,000 barrels per day from the
year-ago period, mainly as a result of the Caltex Australia Limited
divestment.
ALL OTHER
Three MonthsEnded March
31
Millions of Dollars
2016 2015
Earnings* $ (1 ) $ (416 ) *Includes foreign
currency effects $ 27 $ 4
All Other consists of worldwide cash management and debt
financing activities, corporate administrative functions, insurance
operations, real estate activities and technology companies.
Net charges in first quarter 2016 were $1 million, compared with
$416 million in the year-ago period. The change between periods was
mainly due to lower corporate tax items.
CASH FLOW FROM OPERATIONS
Cash flow from operations in first quarter 2016 was $1.1
billion, compared with $2.3 billion in the corresponding 2015
period. Excluding working capital effects, cash flow from
operations in first quarter 2016 was $2.1 billion, compared with
$4.3 billion in the corresponding 2015 period.
CAPITAL AND EXPLORATORY EXPENDITURES
Capital and exploratory expenditures in first quarter 2016 were
$6.5 billion, compared with $8.6 billion in the corresponding 2015
period. The amounts included $791 million in first quarter 2016 and
$730 million in the corresponding 2015 period for the company’s
share of expenditures by affiliates, which did not require cash
outlays by the company. Expenditures for upstream represented 92
percent of the companywide total in first quarter 2016.
NOTICE
Chevron’s discussion of first quarter 2016 earnings with
security analysts will take place on Friday, April 29, 2016, at
8:00 a.m. PDT. A webcast of the meeting will be available in a
listen-only mode to individual investors, media, and other
interested parties on Chevron’s Web site at www.chevron.com under the “Investors”
section. Additional financial and operating information will be
contained in the Earnings Supplement that will be available under
“Events and Presentations” in the “Investors” section on the Web
site.
CAUTIONARY STATEMENTS RELEVANT TO
FORWARD-LOOKING INFORMATION FOR THE PURPOSE OF “SAFE HARBOR”
PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995
This press release contains forward-looking statements relating
to Chevron’s operations that are based on management’s current
expectations, estimates and projections about the petroleum,
chemicals and other energy-related industries. Words or phrases
such as “anticipates,” “expects,” “intends,” “plans,” “targets,”
“forecasts,” “projects,” “believes,” “seeks,” “schedules,”
“estimates,” “may,” “could,” “should,” “budgets,” “outlook,” “on
schedule,” “on track” and similar expressions are intended to
identify such forward-looking statements. These statements are not
guarantees of future performance and are subject to certain risks,
uncertainties and other factors, many of which are beyond the
company’s control and are difficult to predict. Therefore, actual
outcomes and results may differ materially from what is expressed
or forecasted in such forward-looking statements. The reader should
not place undue reliance on these forward-looking statements, which
speak only as of the date of this report. Unless legally required,
Chevron undertakes no obligation to update publicly any
forward-looking statements, whether as a result of new information,
future events or otherwise.
Among the important factors that could cause actual results to
differ materially from those in the forward-looking statements are:
changing crude oil and natural gas prices; changing refining,
marketing and chemicals margins; the company's ability to realize
anticipated cost savings and expenditure reductions; actions of
competitors or regulators; timing of exploration expenses; timing
of crude oil liftings; the competitiveness of alternate-energy
sources or product substitutes; technological developments; the
results of operations and financial condition of the company’s
suppliers, vendors, partners and equity affiliates, particularly
during extended periods of low prices for crude oil and natural
gas; the inability or failure of the company’s joint-venture
partners to fund their share of operations and development
activities; the potential failure to achieve expected net
production from existing and future crude oil and natural gas
development projects; potential delays in the development,
construction or start-up of planned projects; the potential
disruption or interruption of the company’s operations due to war,
accidents, political events, civil unrest, severe weather, cyber
threats and terrorist acts, crude oil production quotas or other
actions that might be imposed by the Organization of Petroleum
Exporting Countries or other natural or human causes beyond its
control; changing economic, regulatory and political environments
in the various countries in which the company operates; general
domestic and international economic and political conditions; the
potential liability for remedial actions or assessments under
existing or future environmental regulations and litigation;
significant operational, investment or product changes required by
existing or future environmental statutes and regulations,
including international agreements and national or regional
legislation and regulatory measures to limit or reduce greenhouse
gas emissions; the potential liability resulting from other pending
or future litigation; the company’s future acquisition or
disposition of assets and gains and losses from asset dispositions
or impairments; government-mandated sales, divestitures,
recapitalizations, industry-specific taxes, changes in fiscal terms
or restrictions on scope of company operations; foreign currency
movements compared with the U.S. dollar; material reductions in
corporate liquidity and access to debt markets; the effects of
changed accounting rules under generally accepted accounting
principles promulgated by rule-setting bodies; the company’s
ability to identify and mitigate the risks and hazards inherent in
operating in the global energy industry; and the factors set forth
under the heading “Risk Factors” on pages 21 through 23 of the
company’s 2015 Annual Report on Form 10-K. Other unpredictable or
unknown factors not discussed in this press release could also have
material adverse effects on forward-looking statements.
Attachment 1 CHEVRON CORPORATION - FINANCIAL
REVIEW (Millions of Dollars, Except Per-Share Amounts)
CONSOLIDATED
STATEMENT OF INCOME
(unaudited)
Three Months Ended March 31
REVENUES AND OTHER INCOME 2016 2015
Sales and other operating revenues *
$ 23,070 $
32,315 Income from equity affiliates
576 1,401 Other income
(loss)
(93 ) 842
Total Revenues and Other
Income 23,553 34,558
COSTS AND OTHER
DEDUCTIONS Purchased crude oil and products
11,225
17,193 Operating, selling, general and administrative expenses
6,402 6,339 Exploration expenses
370 592
Depreciation, depletion and amortization
4,403 4,411 Taxes
other than on income *
2,864 3,118
Total Costs and
Other Deductions 25,264 31,653
Income (Loss)
Before Income Tax Expense (1,711 ) 2,905 Income
tax expense (benefit)
(1,004 ) 305
Net Income
(Loss) (707 ) 2,600 Less: Net income attributable
to noncontrolling interests
18 33
NET INCOME
(LOSS) ATTRIBUTABLE TO CHEVRON CORPORATION $
(725 ) $ 2,567
PER-SHARE OF COMMON
STOCK
Net Income (Loss) Attributable to
Chevron Corporation
- Basic $ (0.39 ) $ 1.38
-
Diluted $ (0.39 ) $ 1.37
Dividends
$ 1.07 $ 1.07
Weighted Average Number of Shares
Outstanding (000's)
- Basic 1,869,775 1,866,655
- Diluted
1,869,775 1,876,498 * Includes excise, value-added
and similar taxes.
$ 1,652 $ 1,877
Attachment 2 CHEVRON CORPORATION - FINANCIAL REVIEW
(Millions of Dollars) (unaudited)
EARNINGS BY MAJOR
OPERATING AREA
Three Months Ended March 31 2016
2015 Upstream United States
$ (850
) $ (460 ) International
(609 ) 2,020
Total Upstream
(1,459 ) 1,560 Downstream
United States
247 706 International
488 717
Total Downstream
735 1,423 All Other
(1)
(1 ) (416 )
Total (2) $
(725 ) $ 2,567
SELECTED BALANCE
SHEET ACCOUNT DATA
Mar. 31,2016
Dec. 31,2015
Cash and Cash Equivalents
$ 8,562 $ 11,022 Marketable
Securities
$ 317 $ 310 Total Assets (3)
$
263,842 $ 264,540 Total Debt (3)
$ 42,339 $
38,549 Total Chevron Corporation Stockholders' Equity
$
150,307 $ 152,716
Three Months Ended March
31
CASH FLOW FROM
OPERATIONS
2016 2015 Net Cash Provided by Operating Activities
$ 1,141 $ 2,319 Net Increase in Operating Working
Capital
$ (993 ) $ (1,985 )
Net Cash Provided by Operating Activities
Excluding Working Capital
$ 2,134 $ 4,304
Three Months Ended
March 31
CAPITAL AND
EXPLORATORY EXPENDITURES (4)
2016 2015 United States Upstream
$ 1,276 $ 2,318 Downstream
421 285 Other
22 63
Total United States 1,719
2,666
International Upstream
4,690 5,842
Downstream
59 75 Other
1 -
Total
International 4,750 5,917
Worldwide
$ 6,469 $ 8,583
(1) Includes worldwide cash management and
debt financing activities, corporate administrative functions,
insurance operations, real estate activities, and technology
companies.
(2) Net Income (Loss) Attributable to Chevron Corporation (See
Attachment 1) (3) 2015 conforms to 2016 presentation. (4) Includes
interest in affiliates: United States
$ 336 $ 234
International
455 496 Total
$
791 $ 730
Attachment 3
CHEVRON CORPORATION - FINANCIAL REVIEW
Three Months
OPERATING
STATISTICS (1)
Ended March 31 NET LIQUIDS PRODUCTION (MB/D):
(2) 2016 2015 United States
490
489 International
1,291 1,312
Worldwide 1,781
1,801
NET NATURAL GAS PRODUCTION (MMCF/D): (3)
United States
1,266 1,257 International
4,044 4,026
Worldwide 5,310 5,283
TOTAL NET
OIL-EQUIVALENT PRODUCTION (MB/D): (4) United States
701 699 International
1,965 1,982
Worldwide
2,666 2,681
SALES OF NATURAL GAS (MMCF/D):
United States
3,808 4,139 International
4,558 4,445
Worldwide 8,366 8,584
SALES OF NATURAL GAS
LIQUIDS (MB/D): United States
129 128 International
88 107
Worldwide 217 235
SALES OF
REFINED PRODUCTS (MB/D): United States
1,210 1,206
International (5)
1,436 1,580
Worldwide 2,646
2,786
REFINERY INPUT (MB/D): United States
957
918 International
795 782
Worldwide 1,752
1,700 (1) Includes interest in affiliates. (2) Includes net
production of synthetic oil: Canada
49 51 Venezuela
Affiliate
27 30 (3) Includes natural gas consumed in
operations (MMCF/D): United States
67 69 International
428 451
(4) Oil-equivalent production is the sum
of net liquids production, net natural gas production and synthetic
production. The oil-equivalent gas conversion ratio is 6,000 cubic
feet of natural gas = 1 barrel of crude oil.
(5) Includes share of affiliate sales (MB/D):
369 485
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Chevron CorporationMelissa Ritchie, +1 925-790-3372
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