- Effects of lower crude prices,
impairments and other charges of $2.6 billion more than offsets
gains on asset sales of $1.8 billion
- Continued progress on cost containment
efforts and major growth projects
Chevron Corporation (NYSE:CVX) today reported earnings of $571
million ($0.30 per share – diluted) for second quarter 2015,
compared with earnings of $5.7 billion ($2.98 per share – diluted)
in the 2014 second quarter. Included in the quarter were
impairments of $1.96 billion and other charges of approximately
$670 million relating to project suspensions and adverse tax
effects, all of which were non-cash charges stemming from a
downward revision in the company’s longer-term crude oil price
outlook. Partially offsetting were gains on asset sales totaling
$1.80 billion in the current quarter. Foreign currency effects
decreased earnings in the 2015 quarter by $251 million, compared
with a decrease of $232 million a year earlier.
Sales and other operating revenues in second quarter 2015 were
$37 billion, compared to $56 billion in the year-ago period.
Earnings Summary
Three Months Six Months Ended
June 30 Ended June 30
Millions of dollars
2015 2014
2015 2014 Earnings by Business
Segment Upstream $(2,219 ) $5,264 $(659 ) $9,571
Downstream 2,956 721 4,379 1,431 All Other (166 )
(320 ) (582 ) (825 )
Total
(1)(2) $571 $5,665
$3,138 $10,177 (1)
Includes foreign currency effects
$(251
) $(232 ) $329 $(311 )
(2) Net income attributable to Chevron
Corporation (See Attachment 1)
“Second quarter financial results were weak, reflecting a crude
price decline of nearly 50 percent from a year ago. Our Upstream
businesses were particularly hard hit, as lower prices reduced
revenues and triggered impairments and other charges. Downstream
operations continued to deliver strong financial performance,
reflecting both high reliability and improved margins,” said
Chairman and CEO John Watson.
“Multiple efforts to improve future earnings and cash flows are
underway,” Watson continued. “We’re getting our cost structure
down, through renegotiations across the supply chain and by sizing
our contractor and employee workforce to reflect lower activity
levels going forward. We’re actively managing to a smaller capital
program, as projects currently under construction come online and
as potential new projects are paced and re-bid. In addition, our
4-year divestment program is ahead of pace.”
“Project execution on our Gorgon and Wheatstone Australian LNG
projects is a priority for us,” Watson commented. “Incremental
production and cash generation from these projects and others,
along with a curtailed capital program, should provide support for
continuing competitive shareholder distributions.”
Recent company milestones include:
- Australia – Completed the sale of the
company’s 50 percent interest in Caltex Australia Limited.
- Australia – Progressed commissioning
activities at the Gorgon Project. Commissioning of the Jansz-Io
Field subsea infrastructure is ongoing. All Train 2 modules are
installed on foundations, with Train 3 modules being delivered to
site.
- Australia – Continued construction of
the Wheatstone Project, which is now over 65 percent complete.
Eleven of 24 Train 1 process modules required for first LNG have
been delivered to site. All gas turbine generators are installed on
foundations. Subsea infrastructure is being installed, with all
three production manifolds now in place.
- New Zealand – Completed the sale of the
company’s interest in The New Zealand Refining Company Limited and
reached agreement to sell the company’s marketing interests in New
Zealand.
- United States – Achieved start-up of
sixth production well at Jack/St. Malo in the deepwater Gulf of
Mexico. Ramp-up of total oil-equivalent production to approximately
80,000 barrels per day continues to exceed expectations.
- United States – On track to drill 325
gross wells in 2015, including multiple horizontal well development
programs, in the Midland and Delaware Basins in Texas and New
Mexico.
UPSTREAM
Worldwide net oil-equivalent production was 2.60 million barrels
per day in second quarter 2015, up from 2.55 million barrels per
day in the 2014 second quarter. This production increase of 2
percent came from project ramp-ups in the United States, Bangladesh
and Argentina, production entitlement effects in several locations,
and lower maintenance-related downtime, primarily reflecting the
absence of a major turnaround at Tengizchevroil in Kazakhstan.
Normal field declines, the Partitioned Zone shut-in, and the effect
of asset sales partially offset these effects.
U.S. Upstream
Three Months Six Months
Ended June 30 Ended June 30 Millions of
Dollars
2015 2014
2015 2014 Earnings
$(1,038) $1,054 $(1,498) $1,966
U.S. upstream operations incurred a loss of $1.04 billion in
second quarter 2015 compared to earnings of $1.05 billion from a
year earlier. The decrease was due to sharply lower crude oil
realizations and higher depreciation expenses, primarily reflecting
impairments, partially offset by higher crude oil production and
lower operating expenses.
The company’s average sales price per barrel of crude oil and
natural gas liquids was $50 in second quarter 2015, down from $92 a
year ago. The average sales price of natural gas was $1.92 per
thousand cubic feet, compared with $4.09 in last year’s second
quarter.
Net oil-equivalent production of 730,000 barrels per day in
second quarter 2015 was up 63,000 barrels per day, or 9 percent,
from a year earlier. Production increases due to project ramp-ups
in the Gulf of Mexico, the Permian Basin in Texas and New Mexico,
and the Marcellus Shale in western Pennsylvania were only partially
offset by normal field declines. The net liquids component of
oil-equivalent production increased 11 percent in the 2015 second
quarter to 511,000 barrels per day, while net natural gas
production increased 5 percent to 1.31 billion cubic feet per
day.
International Upstream
Three Months Six Months
Ended June 30 Ended June 30
Millions of Dollars
2015 2014
2015 2014 Earnings*
$(1,181) $4,210 $839 $7,605
*Includes foreign currency effects
$(146) $(147) $376 $(200)
International upstream operations incurred a loss of $1.18
billion in second quarter 2015 compared to earnings of $4.21
billion from a year earlier. The decrease was due to sharply lower
crude oil realizations, higher depreciation expenses, primarily
reflecting impairments, higher income tax items and higher
exploration expenses. Foreign currency effects decreased earnings
by $146 million in the 2015 quarter, compared with a decrease of
$147 million a year earlier.
The average sales price for crude oil and natural gas liquids in
second quarter 2015 was $56 per barrel, down from $101 a year
earlier. The average price of natural gas was $4.48 per thousand
cubic feet, compared with $5.98 in last year’s second quarter.
Net oil-equivalent production of 1.87 million barrels per day in
second quarter 2015 decreased 12,000 barrels per day, or less than
1 percent, from a year ago. Production increases from entitlement
effects in several locations, lower maintenance-related downtime,
primarily reflecting the absence of a major turnaround at
Tengizchevroil in Kazakhstan, and project ramp-ups in Bangladesh
and Argentina were more than offset by the Partitioned Zone
shut-in, normal field declines, and the effect of asset sales. The
net liquids component of oil-equivalent production decreased 2
percent to 1.21 million barrels per day in the 2015 second quarter,
while net natural gas production increased 2 percent to 3.93
billion cubic feet per day.
DOWNSTREAM
U.S. Downstream
Three Months Six Months
Ended June 30 Ended June 30 Millions of
Dollars
2015 2014
2015 2014 Earnings $731
$517 $1,437 $939
U.S. downstream operations earned $731 million in second quarter
2015 compared with earnings of $517 million a year earlier. The
increase was due to higher margins on refined product sales,
partially offset by the absence of a 2014 asset sale gain and lower
earnings from the 50 percent-owned Chevron Phillips Chemical
Company LLC.
Refinery crude oil input of 916,000 barrels per day in second
quarter 2015 increased 155,000 barrels per day from the year-ago
period. The increase was primarily due to the absence of the second
quarter 2014 major crude unit turnaround at the El Segundo,
California refinery.
Refined product sales of 1.23 million barrels per day were up 3
percent from second quarter 2014, primarily reflecting higher
gasoline sales. Branded gasoline sales of 535,000 barrels per day
were up 2 percent from the 2014 period.
International Downstream
Three Months Six Months
Ended June 30 Ended June 30 Millions of
Dollars
2015 2014
2015 2014 Earnings*
$2,225 $204 $2,942 $492 *Includes foreign
currency effects $(103) $(84) $(49) $(112)
International downstream operations earned $2.23 billion in
second quarter 2015 compared with $204 million a year earlier. The
increase was primarily due to a $1.6 billion gain from the sale of
the company’s interest in Caltex Australia Limited. Higher margins
on refined product sales also contributed to the increase. Foreign
currency effects decreased earnings by $103 million in the 2015
quarter, compared with a decrease of $84 million a year
earlier.
Refinery crude oil input of 774,000 barrels per day in second
quarter 2015 decreased 70,000 barrels per day from the year-ago
period as a result of the Caltex Australia Limited divestment.
Total refined product sales of 1.48 million barrels per day in
the 2015 second quarter were down 69,000 barrels per day from the
year-ago period, due to lower gasoline and gas oil sales resulting
from the Caltex Australia Limited divestment.
ALL OTHER
Three Months Six Months
Ended June 30 Ended June 30
Millions of Dollars
2015 2014
2015 2014 Net Charges*
$(166) $(320) $(582) $(825)
*Includes foreign currency effects
$(2) $(1) $2 $1
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 second quarter 2015 were $166 million, compared
with $320 million in the year-ago period. The change between
periods was mainly due to lower corporate tax items and lower
corporate charges, partially offset by the effects of charges
related to reductions in corporate staffs and higher environmental
expenses.
CASH FLOW FROM OPERATIONS
Cash flow from operations in the first six months of 2015 was
$9.5 billion, compared with $16.3 billion in the corresponding 2014
period. Excluding working capital effects, cash flow from
operations in 2015 was $11.6 billion, compared with $17.0 billion
in 2014.
CAPITAL AND EXPLORATORY EXPENDITURES
Capital and exploratory expenditures in the first six months of
2015 were $17.3 billion, compared with $19.6 billion in the
corresponding 2014 period. The amounts included $1.5 billion in
2015 and $1.5 billion in 2014 for the company’s share of
expenditures by affiliates, which did not require cash outlays by
the company. Expenditures for upstream represented 93 percent of
the companywide total in the first six months of 2015.
NOTICE
Chevron’s discussion of second quarter 2015 earnings with
security analysts will take place on Friday, July 31, 2015, 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 press release. 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 equity affiliates;
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 production or manufacturing facilities or
delivery/transportation networks due to war, accidents, political
events, civil unrest, severe weather, other natural or human
factors, or crude oil production quotas that might be imposed by
the Organization of Petroleum Exporting Countries; the potential
liability for remedial actions or assessments under existing or
future environmental regulations and litigation; significant
investment or product changes required by existing or future
environmental statutes, regulations and litigation; 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; the effects of changed accounting rules under generally
accepted accounting principles promulgated by rule-setting bodies;
and the factors set forth under the heading “Risk Factors” on pages
22 through 24 of the company’s 2014 Annual Report on Form 10-K. In
addition, such results could be affected by general domestic and
international economic and political conditions. 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 Six Months Ended June
30 Ended June 30 REVENUES AND OTHER INCOME
2015 2014 2015 2014 Sales and other
operating revenues *
$ 36,829 $ 55,583
$
69,144 $ 106,561 Income from equity affiliates
1,169
1,709
2,570 3,631 Other income
2,359 646
3,201
1,011
Total Revenues and Other Income 40,357 57,938
74,915 111,203
COSTS AND OTHER DEDUCTIONS Purchased
crude oil and products
20,541 33,844
37,734 64,667
Operating, selling, general and administrative expenses
7,247 7,364
13,586 14,314 Exploration expenses
1,075 694
1,667 1,109 Depreciation, depletion and
amortization
6,958 3,842
11,369 7,972 Taxes other
than on income *
3,173 3,167
6,291 6,186
Total
Costs and Other Deductions 38,994 48,911
70,647
94,248
Income Before Income Tax Expense 1,363 9,027
4,268 16,955 Income tax expense
755 3,337
1,060 6,744
Net Income 608 5,690
3,208
10,211 Less: Net income attributable to noncontrolling interests
37 25
70 34
NET INCOME ATTRIBUTABLE TO CHEVRON
CORPORATION
$ 571 $ 5,665
$ 3,138 $ 10,177
PER-SHARE OF COMMON STOCK Net Income Attributable to
Chevron Corporation - Basic $ 0.30 $ 3.00
$ 1.68 $ 5.38
- Diluted $ 0.30 $
2.98
$ 1.67 $ 5.34
Dividends $
1.07 $ 1.07
$ 2.14 $ 2.07
Weighted
Average Number of Shares Outstanding (000's) - Basic
1,867,561 1,887,543
1,867,110 1,891,266
-
Diluted 1,876,705 1,902,321
1,876,603 1,905,853
* Includes excise, value-added and similar taxes.
$
1,965 $ 2,120
$ 3,842 $ 4,066
Attachment 2
CHEVRON CORPORATION - FINANCIAL REVIEW (Millions of
Dollars) (unaudited)
EARNINGS BY MAJOR
OPERATING AREA
Three Months Six Months Ended June 30 Ended
June 30 2015 2014 2015
2014 Upstream United States
$
(1,038 ) $
1,054 $ (1,498
) $
1,966 International
(1,181 )
4,210 839 7,605 Total
Upstream
(2,219 ) 5,264 (659
) 9,571 Downstream United States
731
517 1,437 939 International
2,225
204 2,942 492
Total Downstream
2,956 721 4,379
1,431 All Other (1)
(166 )
(320 ) (582 ) (825 )
Total (2) $ 571 $
5,665
$ 3,138 $
10,177
SELECTED BALANCE
SHEET ACCOUNT DATA
June 30, 2015 Dec. 31, 2014 Cash and Cash Equivalents
$ 12,156 $ 12,785 Time Deposits
$ - $ 8
Marketable Securities
$ 365 $ 422 Total Assets
$ 266,455 $ 266,026 Total Debt
$ 31,910
$ 27,818 Total Chevron Corporation Stockholders' Equity
$
154,669 $ 155,028
Six Months Ended June
30
CASH FLOW FROM
OPERATIONS
2015 2014 Net Cash Provided by
Operating Activities
$ 9,539 $ 16,298 Net increase in
Operating Working Capital
$ (2,025 ) $ (741 )
Net Cash Provided by Operating Activities Excluding Working Capital
$ 11,564 $ 17,039
Three Months Six
Months Ended June 30 Ended June 30
CAPITAL AND
EXPLORATORY EXPENDITURES (3)
2015 2014 2015
2014 United States Upstream
$
1,876 $ 2,130
$ 4,194 $ 4,088 Downstream
531 411
816 768 Other
88 122
151 221
Total United States
2,495 2,663
5,161 5,077
International
Upstream
6,114 7,281
11,956 14,109 Downstream
114 230
189 415 Other
1 11
1 15
Total International 6,229
7,522
12,146 14,539
Worldwide $ 8,724 $ 10,185
$ 17,307 $ 19,616
(1) Includes worldwide cash management and
debt financing activities, corporate administrative functions,
insurance operations, real estate activities, and technology
companies.
(2) Net Income Attributable to Chevron
Corporation (See Attachment 1)
(3) Includes interest in affiliates: United States
$
306 $ 236
$ 540 $ 431 International
490
669
986 1,086 Total
$
796 $ 905
$ 1,526 $ 1,517
Attachment 3
CHEVRON CORPORATION - FINANCIAL REVIEW
Three Months
Six Months
OPERATING
STATISTICS (1)
Ended June 30 Ended June 30 NET LIQUIDS PRODUCTION
(MB/D): (2) 2015 2014 2015
2014 United States
511 460
500 449
International
1,211 1,234
1,261 1,255
Worldwide 1,722 1,694
1,761 1,704
NET NATURAL GAS PRODUCTION (MMCF/D): (3) United
States
1,312 1,244
1,285 1,228 International
3,931 3,861
3,978 3,950
Worldwide
5,243 5,105
5,263 5,178
TOTAL NET
OIL-EQUIVALENT PRODUCTION (MB/D): (4) United States
730 667
714 654 International
1,866 1,878
1,924 1,913
Worldwide
2,596 2,545
2,638 2,567
SALES OF NATURAL
GAS (MMCF/D): United States
3,777 3,676
3,957
4,303 International
4,130 4,132
4,286 4,347
Worldwide 7,907 7,808
8,243 8,650
SALES OF NATURAL GAS LIQUIDS (MB/D): United States
163 135
146 132 International
84 81
95
85
Worldwide 247 216
241 217
SALES
OF REFINED PRODUCTS (MB/D): United States
1,229 1,188
1,218 1,193 International (5)
1,478 1,547
1,529 1,475
Worldwide 2,707 2,735
2,747
2,668
REFINERY INPUT (MB/D): United States
916
761
918 816 International
774 844
777 809
Worldwide 1,690 1,605
1,695 1,625 (1)
Includes interest in affiliates. (2) Includes: Canada - Synthetic
Oil
28 42
39 41 Venezuela Affiliate - Synthetic Oil
29 32
30 32 (3) Includes natural gas consumed in
operations (MMCF/D): United States
66 69
68 71
International
423 452
438 466
(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):
367 470
426 464
View source
version on businesswire.com: http://www.businesswire.com/news/home/20150731005167/en/
Chevron Corporation, San RamonKurt Glaubitz,
+1-925-790-6928Kurt.Glaubitz@Chevron.com
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