Chevron Corp. reported first-quarter earnings of $2.6 billion, down from $3.6 billion in first-quarter 2018 while its worldwide net oil-equivalent production was 3.04 million b/d in the quarter, an increase of 7% from 2.85 million b/d a year ago.
Foreign currency effects decreased earnings in this year’s first quarter by $137 million, and sales and other operating revenues in the same period were $34 billion compared with $36 billion in first-quarter 2018.
Cash flow from operations in the first 3 months totaled $5.1 billion, compared with $5 billion in the corresponding 2018 period. Excluding working capital effects, cash flow from operations in 2019 was $6.3 billion, compared with $7.1 billion in the corresponding 2018 period.
Capital and exploratory expenditures in the 3 months were $4.7 billion, up from $4.4 billion in the corresponding 2018 period, including $1.5 billion in 2019 and $1.3 billion in 2018 for the company’s share of expenditures by affiliates, which did not require cash outlays by the company. Expenditures for upstream represented 89% of the company-wide total in 2019.
“First quarter earnings declined from a year ago, largely due to lower crude oil prices and weaker downstream and chemicals margins,” said Michael Wirth, Chevron’s chairman and chief executive officer. Upstream production volumes increased primarily in the Permian basin and at Wheatstone in Australia, and the company continues to high-grade its portfolio, selling interests in Rosebank field in the UK, Frade field in Brazil, and the April close of its sale of upstream interests in Denmark. Announced in the quarter, too, is its definitive agreement to acquire Anadarko Petroleum Corp. (OGJ Online, Apr. 12, 2019).
Upstream earnings up
US upstream operations earned $748 million in the first quarter, up from $648 million a year earlier. The increase was primarily due to higher crude oil production partially offset by lower crude oil and natural gas realizations. Net production of 884,000 boe/d in the quarter was up 151,000 boe/d from a year earlier. Production increases from shale and tight properties in the Permian basin in Texas and New Mexico, and major capital projects and base business in the Gulf of Mexico, were partially offset by normal field declines and the impact of asset sales. The net liquids component of production in this year’s first quarter increased 22% to 690,000 boe/d, while net natural gas production increased 17% to 1.16 bcfd.
International upstream operations earned $2.38 billion in the first quarter, down from $2.7 billion a year ago. Foreign currency effects had an unfavorable impact on earnings of $288 million between periods, largely due to the valuation of the Venezuelan Bolivar. Higher natural gas sales volumes and prices were partially offset by lower crude oil prices. Net production of 2.15 million boe/d in the quarter was up 35,000 boe/d from a year earlier. Production increases from major capital projects, including Wheatstone, base business, and shale and tight properties, were partially offset by normal field declines and production entitlement effects. The net liquids component of production was relatively flat at 1.19 million boe/d in this year’s first quarter, while net natural gas production increased 4% to 5.81 bcfd.
Downstream earnings down
International downstream operations earned $35 million in the first quarter, down from $286 million a year earlier. The decrease was largely due to lower margins on refined product sales. Foreign currency effects had a favorable impact on earnings of $20 million between periods. Refinery input of 669,000 b/d in the quarter decreased 43,000 b/d from the year-ago period, mainly due to the sale of the company’s interest in the Cape Town refinery in third-quarter 2018.
