By the OGJ Online Staff
HOUSTON, July 25 -- Texaco Inc. reported second quarter 2001 income before special items of $817 million and net income of $784 million
Glenn Tilton, chairman and CEO, said, "Texaco's earnings were outstanding, exceeding $800 million for the fourth consecutive quarter."
He said robust refining margins on the East and Gulf coasts and high refinery run rates were strong contributing factors. "While refining margins have contracted, marketing margins have increased from their low levels early in the second quarter."
Tilton said Texaco's Blind Faith discovery on Mississippi Canyon Block 696 and the Champlain discovery in Atwater Valley Block 63 in the Gulf of Mexico should add significantly to future production and reserves.
"Our US natural gas trading business posted strong results as it continued to capitalize on significantly increased trading volumes through the delivery of structured, customer-based services. At the end of June, operations began at our newest facility, the 320-Mw Sunrise power project in California."
Tilton said, "While maintaining focus on our strategies and operations, we continue to make progress in our merger with Chevron Corp. and expect to complete the merger within the planned 12-month time frame."
US exploration and production earnings for the second quarter and first 6 months exceeded last year's due to higher natural gas prices. Texaco's gas prices for the second quarter and 6 months 2001 were $4.48/Mcf and $5.86/Mcf, which were 37% and 105% higher than the same periods last year. For the periods, realized oil prices were $22.51/bbl and $23.42.bbl, which were 10% and 5% lower than last year.
Production dropped 10% for the second quarter to 531,000 boe/d and 11% for the first 6 months to 533,000 boe/d.
Texaco said half of the drop for the 6 months was due to sales of noncore producing properties. The rest was due to field declines and lower production in California fields, where steam production was reduced due to high natural gas prices.