Chevron Corp. reported third-quarter earnings of $4 billion compared with $2 billion earned in third-quarter 2017. Included in the current quarter were a write-off, an asset impairment, and a nonrecurring contractual settlement totaling $930 million in the upstream business, and a gain of $350 million on the sale of southern Africa refining, marketing, and lubricant assets.
Foreign currency effects decreased earnings in the third quarter by $51 million compared with a decrease of $112 million a year earlier.
Sales and other operating revenues in the third quarter were $42 billion compared with $34 billion in the year-ago period.
“Quarterly cash flow from operations of $9.6 billion was the highest it has been in nearly 5 years,” noted Chairman and Chief Executive Officer Michael Wirth. “Net oil-equivalent production of 2.96 million b/d represents our highest quarter ever. Ramp-up of Wheatstone in Australia and the Permian basin in Texas and New Mexico drove a production increase of 9% over the prior year quarter.”
Upstream
Worldwide net production was 2.96 million boe/d in the third quarter compared with 2.72 million boe/d from a year ago.
US upstream operations earned $828 million in the third quarter compared with a loss of $26 million a year earlier. The improvement reflected higher crude oil realizations and production, partially offset by higher depreciation and exploration expenses, primarily reflecting a $550-million write-off of the Tigris project in the Gulf of Mexico.
Net production of 831,000 boe/d in the third quarter was up 150,000 boe/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 19,000 b/d. The net liquids component of production in the third quarter increased 25% to 654,000 boe/d, while net natural gas production increased 14% to 1.06 bcfd.
International upstream operations earned $2.55 billion in the third quarter compared with $515 million a year ago. The increase was mainly due to higher oil and gas realizations and higher gas sales volumes. Foreign currency effects had a favorable impact on earnings of $122 million between periods. The third quarter included charges totaling $380 million for an asset impairment and a contractual settlement.
The average sales price for oil and natural gas liquids in the third quarter was $69/bbl, up from $48/bbl a year earlier. The average sales price of gas was $6.73/Mcf in the quarter compared with $4.76/Mcf in last year’s third quarter.
Net production of 2.13 million boe/d in the third quarter was up 89,000 boe/d from a year earlier. Production increases from major capital projects, primarily Wheatstone and Gorgon in Australia, were partially offset by maintenance-related downtime, production entitlement effects, and normal field declines. The net liquids component of production decreased 5% to 1.13 million boe/d in the third quarter, while net natural gas production increased 18% to 5.95 bcfd.
Downstream
US downstream operations earned $748 million in the third quarter compared with earnings of $640 million a year earlier. The increase was primarily due to higher equity earnings from the 50%-owned Chevron Phillips Chemical Co. LLC and lower tax expense, partially offset by higher operating expenses.
Refinery crude oil input in the third quarter decreased 2% to 915,000 b/d from the year-ago period. Refined product sales of 1.23 million b/d were unchanged from third quarter 2017.
Refinery crude oil input of 710,000 b/d in the third quarter decreased 91,000 b/d from the year-ago period, mainly due to the sale of the company’s Canadian refining asset in third-quarter 2017 and crude unit maintenance at the refineries in Thailand and Singapore.
