Chevron Corp. reported second-quarter earnings of $4.3 billion compared with $3.4 billion in second-quarter 2018. Included in the current quarter were earnings of $740 million associated with the Anadarko Petroleum Corp. merger termination fee and a noncash tax benefit of $180 million related to a reduction in the Alberta corporate income tax rate. Foreign currency effects increased earnings in the second quarter by $15 million.
The company’s net earnings were $93 million compared with net charges of $724 million in the same period a year ago. The change between periods was mainly due to the receipt of the Anadarko termination fee and lower corporate expenses.
Sales and other operating revenues in this year’s second quarter were $36 billion compared with $40 billion in the year-ago period.
Cash flow from operations in the first half of this year was $13.8 billion compared with $11.9 billion in the corresponding period in 2018. Included was $1 billion associated with the receipt of the Anadarko merger termination fee. Excluding working capital effects, cash flow from operations this year was $14.1 billion compared with $14.2 billion in the corresponding 2018 period.
Capital and exploratory expenditures in the first 6 months of the year were $10 billion compared with $9.2 billion in the corresponding 2018 period.
Chevron’s second-quarter worldwide net production was 3.08 million boe/d, up 9% from 2.83 million boe/d year ago.
US upstream
US upstream operations earned $896 million in the quarter compared with $838 million a year earlier. The increase was primarily due to higher crude oil production, partially offset by lower crude oil and natural gas realizations, higher operating and depreciation expenses primarily related to increased Permian activity, and higher tax items.
Net oil-equivalent production of 898,000 b/d was up 159,000 b/d from a year earlier. Production increases from the Permian basin and base business in the Gulf of Mexico were partially offset by normal field declines. The net liquids component of oil-equivalent production in the quarter increased 23% to 710,000 b/d, while net natural gas production increased 15% to 1.13 bcfd vs. last year’s second quarter.
Second quarter unconventional production in the Permian basin was 421,000 b/d, representing growth of over 50% compared with a year ago.
International upstream
International upstream operations earned $2.59 billion in the second quarter compared with $2.46 billion a year ago.
Net production of 2.19 million boe/d was up 99,000 boe/d from a year earlier. Production increases from Wheatstone and other major capital projects, base business, and shale and tight properties were partially offset by normal field declines and the effect of asset sales. The net liquids component of production was relatively flat at 1.15 million boe/d in the quarter, while net natural gas production increased 10% to 6.2 bcfd compared with last year’s second quarter.
Downstream
US downstream operations earned $465 million in the second quarter compared with earnings of $657 million a year earlier. The decrease was primarily due to lower margins on refined product sales and lower equity earnings from the 50%-owned Chevron Phillips Chemical Co. LLC.
Refinery crude oil input in the quarter increased 12% to 960,000 b/d from the year-ago period, primarily due to the absence of second quarter 2018 planned turnaround activity and the purchase of the Pasadena, Tex., refinery.
International downstream operations earned $264 million in the quarter compared with $181 million a year earlier. The increase in earnings was largely due to higher margins on refined product sales and a post-close working capital true-up related to the 2018 sale of the Cape Town, South Africa, refinery. Foreign currency effects had an unfavorable impact on earnings of $53 million between periods.
Refinery crude oil input of 599,000 b/d in the quarter decreased 140,000 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 and maintenance at the GS Caltex refinery in Yeosu, South Korea, in this year’s second quarter.
