- First quarter earnings of $3.6 billion
- Cash flow from operations of $4.7 billion
- Taking actions to protect the dividend, sustain long-term value
and preserve cash
- Further reducing 2020 capital expenditure guidance to as low as
$14 billion
- Completed asset sales in the Philippines and Azerbaijan
Chevron Corporation (NYSE: CVX) today reported earnings of $3.6
billion ($1.93 per share - diluted) for first quarter 2020,
compared with earnings of $2.6 billion ($1.39 per share - diluted)
in the first quarter 2019. Included in the current quarter was a
gain of $240 million associated with the sale of upstream assets in
the Philippines and favorable tax items totaling $440 million
attributable to international upstream. Foreign currency effects
increased earnings in the first quarter 2020 by $514 million.
Sales and other operating revenues in first quarter 2020 were
$30 billion, compared to $34 billion in the year-ago period.
Earnings Summary
Three Months Ended March
31
Millions of dollars
2020
2019
Earnings by business segment
Upstream
$2,920
$3,123
Downstream
1,103
252
All Other
(424)
(726)
Total (1)(2)
$3,599
$2,649
(1) Includes foreign currency effects
$514
$(137)
(2) Net income attributable to Chevron
Corporation (See Attachment 1)
“First quarter earnings were up from a year ago,” said Michael
K. Wirth, Chevron’s chairman of the board and chief executive
officer, “driven by downstream margins and increased Permian
production. However, commodity prices fell significantly in March
and the weakness continued into the second quarter, primarily due
to reduced demand resulting from the COVID-19 pandemic.” Financial
results in future periods are expected to be depressed as long as
current market conditions persist.
“Chevron is responding to these unprecedented challenges by
making changes to what we control, and with a commitment to protect
the long-term health and value of the company,” Wirth added. “Our
company entered this crisis well positioned with a strong balance
sheet, flexible capital program and low breakeven price. These
advantages will be important as we respond to challenging market
conditions.”
Chevron is further reducing its 2020 capital expenditure
guidance by up to $2 billion to $14 billion. In addition, the
company estimates that 2020 operating costs will decrease by $1
billion. This follows the previously announced suspension of share
repurchases and the completion of additional asset sales.
“Together these actions are consistent with our longstanding
financial priorities: to protect the dividend; to prioritize
capital that drives long-term value; and to maintain a strong
balance sheet,” said Wirth.
“Our primary focus continues to be the safety of our people and
operations, and providing the energy essential to everyday life and
vital to combat the pandemic. Our products support the efforts of
health care providers and first responders around the globe and
fuel the transportation that keeps global supply chains moving,”
Wirth concluded.
Meanwhile, Chevron's portfolio high-grading continued with the
close of asset sales in the Philippines in March and Azerbaijan in
April, which together generated over $1.6 billion in proceeds this
year.
UPSTREAM
Worldwide net oil-equivalent production was 3.24 million barrels
per day in first quarter 2020, an increase of over 6 percent from a
year ago, and a new quarterly record.
U.S. Upstream
Three Months Ended March
31
Millions of dollars
2020
2019
Earnings
$241
$748
U.S. upstream operations earned $241 million in first quarter
2020, compared with earnings of $748 million a year earlier. The
decrease was primarily due to lower crude oil and natural gas
realizations and higher depreciation expense, partially offset by
higher crude oil and natural gas production.
The company’s average sales price per barrel of crude oil and
natural gas liquids was $37 in first quarter 2020, down from $48 a
year earlier. The average sales price of natural gas was $0.60 per
thousand cubic feet in first quarter 2020, down from $1.64 in last
year’s first quarter.
Net oil-equivalent production of 1.06 million barrels per day in
first quarter 2020 was up 180,000 barrels per day from a year
earlier. Production increases from shale and tight properties in
the Permian Basin in Texas and New Mexico were partially offset by
normal field declines. The net liquids component of oil-equivalent
production in first quarter 2020 increased 16 percent to 803,000
barrels per day, while net natural gas production increased 35
percent to 1.56 billion cubic feet per day, compared to last year's
first quarter.
First quarter unconventional net oil-equivalent production in
the Permian Basin was 580,000 barrels per day, representing growth
of 48 percent compared to a year ago.
International Upstream
Three Months Ended March
31
Millions of dollars
2020
2019
Earnings*
$2,679
$2,375
*Includes foreign currency effects
$468
$(168)
International upstream operations earned $2.7 billion in first
quarter 2020, compared with $2.4 billion a year ago. Foreign
currency effects had a favorable impact on earnings of $636 million
between periods. Favorable tax items, the gain on the Philippines
asset sale and favorable trading effects also contributed to the
increase. Partially offsetting these items were lower crude oil and
natural gas prices.
The average sales price for crude oil and natural gas liquids in
first quarter 2020 was $43 per barrel, down from $58 a year
earlier. The average sales price of natural gas was $5.66 per
thousand cubic feet in the quarter, compared with $6.57 in last
year’s first quarter.
Net oil-equivalent production of 2.17 million barrels per day in
first quarter 2020 increased 17,000 barrels per day from first
quarter 2019. Increases from production entitlement effects, the
absence of first quarter 2019 downtime at Gorgon, and other factors
were largely offset by asset sale decreases of 95,000 barrels per
day and normal field declines. The net liquids component of
oil-equivalent production decreased 2 percent to 1.16 million
barrels per day in first quarter 2020, while net natural gas
production of 6.05 billion cubic feet per day increased 4 percent,
compared to last year's first quarter.
DOWNSTREAM
U.S. Downstream
Three Months Ended March
31
Millions of dollars
2020
2019
Earnings
$450
$217
U.S. downstream operations earned $450 million in first quarter
2020, compared with earnings of $217 million a year earlier. The
increase was mainly due to higher margins on refined product sales,
partially offset by higher operating expenses and lower earnings
from the 50 percent-owned Chevron Phillips Chemical Company.
Refinery crude oil input in first quarter 2020 increased 12
percent to 965,000 barrels per day from the year-ago period,
primarily due to the acquisition of the Pasadena refinery in
Texas.
Refined product sales of 1.16 million barrels per day were down
3 percent from first quarter 2019, mainly due to lower jet fuel and
diesel sales.
International Downstream
Three Months Ended March
31
Millions of dollars
2020
2019
Earnings*
$653
$35
*Includes foreign currency effects
$60
$31
International downstream operations earned $653 million in first
quarter 2020, compared with $35 million a year earlier. The
increase in earnings was largely due to higher margins on refined
product sales, partially offset by higher operating expenses.
Foreign currency effects had a favorable impact on earnings of $29
million between periods.
Refinery crude oil input of 635,000 barrels per day in first
quarter 2020 decreased 5 percent from the year-ago period.
Refined product sales of 1.27 million barrels per day in first
quarter 2020 were down 10 percent from the year-ago period, mainly
due to lower jet fuel, diesel and gasoline sales resulting from
travel restrictions associated with the COVID-19 pandemic.
ALL OTHER
Three Months Ended March
31
Millions of dollars
2020
2019
Net Charges*
$(424)
$(726)
*Includes foreign currency effects
$(14)
$0
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 2020 were $424 million, compared
with $726 million in the year-ago period. The change between
periods was mainly due to lower employee and interest expense.
Foreign currency effects increased net charges by $14 million
between periods.
CASH FLOW FROM OPERATIONS
Cash flow from operations in the first three months of 2020 was
$4.7 billion, compared with $5.1 billion in the corresponding 2019
period. Excluding working capital effects, cash flow from
operations in first quarter 2020 was $5.8 billion, compared with
$6.3 billion in the corresponding 2019 period.
CAPITAL AND EXPLORATORY EXPENDITURES
Capital and exploratory expenditures in the first three months
of 2020 were $4.4 billion, compared with $4.7 billion in 2019. The
amounts included $1.2 billion in 2020 and $1.5 billion in 2019 for
the company’s share of expenditures by affiliates, which did not
require cash outlays by the company. Expenditures for upstream
represented 88 percent of the companywide total in 2020.
NOTICE
Chevron’s discussion of first quarter 2020 earnings with
security analysts will take place on Friday, May 1, 2020, 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 website at www.chevron.com under the “Investors” section.
Additional financial and operating information and other
complementary materials will be available under “Events and
Presentations” in the “Investors” section on the Chevron
website.
As used in this news release, the term “Chevron” and such terms
as “the company,” “the corporation,” “our,” “we,” “us” and “its”
may refer to Chevron Corporation, one or more of its consolidated
subsidiaries, or to all of them taken as a whole. All of these
terms are used for convenience only and are not intended as a
precise description of any of the separate companies, each of which
manages its own affairs.
CAUTIONARY STATEMENTS RELEVANT TO
FORWARD-LOOKING INFORMATION FOR THE PURPOSE OF “SAFE HARBOR”
PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995
This news 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,” “positions,” “pursues,” “may,” “could,” “should,”
“will,” “budgets,” “outlook,” “trends,” “guidance,” “focus,” “on
schedule,” “on track,” “is slated,” “goals,” “objectives,”
“strategies,” “opportunities,” “poised” “potential” 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 news 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 and demand for our
products; crude oil production quotas or other actions that might
be imposed by the Organization of Petroleum Exporting Countries and
other producing countries; public health crises, such as pandemics
(including coronavirus (COVID-19)) and epidemics, and any related
government policies and actions; changing economic, regulatory and
political environments in the various countries in which the
company operates; general domestic and international economic and
political conditions; changing refining, marketing and chemicals
margins; the company's ability to realize anticipated cost savings,
expenditure reductions and efficiencies associated with enterprise
transformation initiatives; 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 during the COVID-19 pandemic; 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, terrorist acts, or other
natural or human causes beyond the company's control; 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 pending or future
litigation; the company's future acquisitions or dispositions of
assets or shares or the delay or failure of such transactions to
close based on required closing conditions; the potential for gains
and losses from asset dispositions or impairments;
government-mandated sales, divestitures, recapitalizations,
industry-specific taxes, tariffs, sanctions, 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
receipt of required Board authorizations to pay future dividends;
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 18
through 21 of the company's 2019 Annual Report on Form 10-K and in
subsequent filings with the U.S. Securities and Exchange
Commission. Other unpredictable or unknown factors not discussed in
this news release could also have material adverse effects on
forward-looking statements.
CHEVRON CORPORATION -
FINANCIAL REVIEW
Attachment 1
(Millions of Dollars, Except
Per-Share Amounts)
(unaudited)
CONSOLIDATED
STATEMENT OF INCOME
Three Months Ended March
31
REVENUES AND OTHER INCOME
2020
2019
Sales and other operating revenues
$
29,705
$
34,189
Income from equity affiliates
965
1,062
Other income
831
(51
)
Total Revenues and Other Income
31,501
35,200
COSTS AND OTHER DEDUCTIONS
Purchased crude oil and products
15,509
19,703
Operating expenses *
6,072
5,971
Exploration expenses
158
189
Depreciation, depletion and
amortization
4,288
4,094
Taxes other than on income
1,167
1,061
Interest and debt expense
162
225
Total Costs and Other
Deductions
27,356
31,243
Income (Loss) Before Income Tax
Expense
4,145
3,957
Income tax expense (benefit)
564
1,315
Net Income (Loss)
3,581
2,642
Less: Net income (loss) attributable to
noncontrolling interests
(18
)
(7
)
NET INCOME (LOSS) ATTRIBUTABLE
TO
CHEVRON CORPORATION
$
3,599
$
2,649
* Includes operating expense, selling,
general and administrative expense, and other components of net
periodic benefit costs
PER-SHARE OF
COMMON STOCK
Net Income (Loss) Attributable to
Chevron Corporation
- Basic
$
1.93
$
1.40
- Diluted
$
1.93
$
1.39
Weighted Average Number of Shares
Outstanding (000's)
- Basic
1,862,273
1,888,002
- Diluted
1,865,649
1,900,748
CHEVRON CORPORATION -
FINANCIAL REVIEW
Attachment 2
(Millions of Dollars)
(unaudited)
EARNINGS BY MAJOR
OPERATING AREA
Three Months Ended March
31
2020
2019
Upstream
United States
$
241
$
748
International
2,679
2,375
Total Upstream
2,920
3,123
Downstream
United States
450
217
International
653
35
Total Downstream
1,103
252
All Other (1)
(424
)
(726
)
Total (2)
$
3,599
$
2,649
SELECTED BALANCE
SHEET ACCOUNT DATA (Preliminary)
Mar 31, 2020
Dec 31, 2019
Cash and Cash Equivalents
$
8,492
$
5,686
Marketable Securities
$
50
$
63
Total Assets
$
236,677
$
237,428
Total Debt
$
32,351
$
26,973
Total Chevron Corporation Stockholders'
Equity
$
143,930
$
144,213
Three Months Ended March
31
CAPITAL AND
EXPLORATORY EXPENDITURES (3)
2020
2019
United States
Upstream
$
2,017
$
1,871
Downstream
276
383
Other
94
79
Total United States
2,387
2,333
International
Upstream
1,884
2,321
Downstream
148
77
Other
5
3
Total International
2,037
2,401
Worldwide
$
4,424
$
4,734
(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
$
119
$
90
International
1,064
1,442
Total
$
1,183
$
1,532
CHEVRON CORPORATION -
FINANCIAL REVIEW
Attachment 3
(Billions of Dollars)
(unaudited)
SUMMARIZED
STATEMENT OF CASH FLOWS (Preliminary)1
Three Months Ended March
31
OPERATING ACTIVITIES
2020
2019
Net Income
$
3.6
$
2.6
Adjustments
Depreciation, depletion and
amortization
4.3
4.1
Distributions less than income from equity
affiliates
(0.6
)
(0.5
)
Loss (gain) on asset retirements and
sales
(0.2
)
0.1
Net foreign currency effects
(0.4
)
0.1
Deferred income tax provision
0.1
0.1
Net decrease (increase) in operating
working capital
(1.1
)
(1.2
)
Other operating activity
(0.8
)
(0.3
)
Net Cash Provided by Operating
Activities
$
4.7
$
5.1
INVESTING ACTIVITIES
Capital expenditures
(3.1
)
(3.0
)
Proceeds and deposits related to asset
sales and returns of investment
0.4
0.3
Net maturities of (investments in) time
deposits
—
1.0
Other investing activity(2)
(0.4
)
(0.3
)
Net Cash Used for Investing
Activities
$
(3.2
)
$
(2.0
)
FINANCING ACTIVITIES
Net change in debt
5.4
(1.6
)
Cash dividends — common stock
(2.4
)
(2.2
)
Net sales (purchases) of treasury
shares
(1.6
)
—
Distributions to noncontrolling
interests
—
—
Net Cash Used for Financing
Activities
$
1.4
$
(3.8
)
EFFECT OF EXCHANGE RATE CHANGES ON
CASH, CASH EQUIVALENTS AND RESTRICTED CASH
(0.2
)
—
NET CHANGE IN CASH, CASH EQUIVALENTS
AND RESTRICTED CASH
$
2.8
$
(0.8
)
(1) Totals may not match sum of parts due
to presentation in billions.
(2) Primarily borrowings of loans by
equity affiliates.
CHEVRON CORPORATION -
FINANCIAL REVIEW
Attachment 4
(unaudited)
OPERATING
STATISTICS (1)
Three Months Ended March
31
NET LIQUIDS PRODUCTION (MB/D):
(2)
2020
2019
United States
803
690
International
1,163
1,185
Worldwide
1,966
1,875
NET NATURAL GAS PRODUCTION (MMCF/D):
(3)
United States
1,564
1,162
International
6,049
5,813
Worldwide
7,613
6,975
TOTAL NET OIL-EQUIVALENT PRODUCTION
(MB/D): (4)
United States
1,064
884
International
2,171
2,154
Worldwide
3,235
3,038
SALES OF NATURAL GAS (MMCF/D):
United States
4,363
4,255
International
6,226
5,836
Worldwide
10,589
10,091
SALES OF NATURAL GAS LIQUIDS
(MB/D):
United States
235
201
International
140
112
Worldwide
375
313
SALES OF REFINED PRODUCTS
(MB/D):
United States
1,159
1,191
International (5)
1,271
1,415
Worldwide
2,430
2,606
REFINERY INPUT (MB/D):
United States
965
861
International
635
669
Worldwide
1,600
1,530
(1) Includes interest in affiliates.
(2) Includes net production of synthetic
oil:
Canada
57
50
Venezuela Affiliate
—
23
(3) Includes natural gas consumed in
operations (MMCF/D):
United States
47
38
International
607
607
(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):
354
391
View source
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