Chevron Corp. reported earnings of $3.6 billion for this year’s first quarter compared with $2.7 billion in the same quarter in 2017. The company attributes cash flow and earnings increases to “a powerful combination” of expanding upstream margins and volumes.
The average sales price for crude oil and natural gas liquids in the first quarter was $61/bbl, up from $49/bbl a year earlier.
“Oil and gas production is increasing, most notably in our Gorgon and Wheatstone LNG projects in Australia, and our shale developments in the Permian basin where production grew 65% from a year ago,” said Chairman and Chief Executive Officer Michael Wirth.
Sales and other operating revenues in the first quarter were $36 billion compared with $32 billion in the year-ago period.
Worldwide net oil-equivalent production was 2.85 million b/d in first quarter 2018 compared with 2.68 million b/d from a year ago.
US upstream operations earned $648 million in the first quarter compared with $80 million from a year earlier. The improvement primarily reflected higher realizations and production, partially offset by higher exploration expenses, the company said.
Net oil-equivalent production of 733,000 b/d in the first quarter 2018 was up 61,000 b/d from a year earlier. Production increases from shale and tight properties in the Permian basin in Texas and New Mexico, and base business in the Gulf of Mexico, were partially offset by the impact of asset sales of 39,000 b/d and normal field declines. The net liquids component of oil-equivalent production in first quarter 2018 increased 13% to 567,000 b/d, while net natural gas production decreased 1% to 993 MMcfd.
International upstream operations earned $2.7 billion in the first quarter compared with $1.44 billion a year ago. The increase in earnings was mainly due to higher crude oil and natural gas realizations, higher gas sales volumes and lower tax items, partially offset by the absence of a gain of $600 million from the 2017 sale of the Indonesia geothermal business and higher depreciation expenses associated with higher production. Foreign currency effects had a favorable impact on earnings of $394 million between periods.
Net oil-equivalent production of 2.12 million b/d in first quarter 2018 was up 115,000 b/d from a year earlier. The net liquids component of oil-equivalent production decreased 1% to 1.19 million b/d in the 2018 first quarter, while net natural gas production increased 17% to 5.6 bcfd.
US downstream operations earned $442 million in the first quarter compared with earnings of $469 million a year earlier. The decrease was primarily due to lower margins on refined product sales and higher expenses from planned turnaround activity at the El Segundo, Calif., refinery. These were partially offset by lower tax expense, and higher equity earnings from the 50%-owned Chevron Phillips Chemical Co. LLC.
Refinery crude oil input in the first quarter increased 2% to 930,000 b/d from the year-ago period. Refined product sales of 1.19 million b/d increased 3% from first quarter 2017, primarily due to increased jet fuel sales. Branded gasoline sales of 501,000 b/d decreased 2% from the 2017 period.
International downstream operations earned $286 million in the first quarter compared with $457 million a year earlier. The decrease in earnings was largely due to lower margins on refined product sales, partially offset by lower operating expenses. Foreign currency effects had a favorable impact on earnings of $57 million between periods.
Refinery crude oil input of 712,000 b/d in the first quarter decreased 41,000 b/d from the year-ago period mainly due to sale of the company’s Canadian refining asset in third quarter 2017.
Total refined product sales of 1.44 million b/d in the first quarter were down 1% from the year-ago period, primarily due to lower diesel sales, partially offset by higher jet fuel sales.