Chevron posts $1.5 billion in second-quarter earnings, higher cash flow

Chevron Corp. reported second-quarter earnings of $1.5 billion, compared with a loss of $1.5 billion in second-quarter 2016.

Chevron Corp. reported second-quarter earnings of $1.5 billion, compared with a loss of $1.5 billion in second-quarter 2016.

During the first half, the supermajor recorded cash flow from operations of $8.9 billion, compared with $3.7 billion in first-half 2016.

Chevron’s second-quarter worldwide net production was 2.78 million boe/d, up from 2.53 million boe/d in second-quarter 2016. Production gains were noted from major capital projects, base business, and shale and tight properties, and lower maintenance-related downtime. The gains were partially offset by normal field declines, production entitlement effects in several locations, and the effect of 2016 asset sales.

The firm’s international upstream operations during the second quarter earned $955 million, compared with a loss of $1.35 billion in second-quarter 2016. Chevron said the increase in earnings reflected lower impairment charges, partially offset by higher depreciation expenses from increased production. The improvement also included lower tax items, higher natural gas sales volumes, higher crude oil realizations and volumes, and lower operating expenses

Chevron’s international production during the second quarter was 2.08 million boe/d, up 233,000 boe/d from a year earlier. Production increases from major capital projects and base business in multiple areas and lower maintenance-related downtime were partially offset by production entitlement effects in several locations and normal field declines, the firm said. Net liquids production increased 3% year-over-year to 1.22 million boe/d, while net gas production increased 30% year-over-year to 5.14 bcfd.

The firm’s US upstream operations incurred a second-quarter loss of $102 million compared with a loss of $1.11 billion a year earlier. The improvement reflected lower impairment charges, higher oil and gas realizations, higher gains on asset sales, and lower operating expenses.

US net production of 701,000 boe/d for the firm during the second quarter was up 19,000 boe/d from a year earlier. Production increases from shale and tight properties in the Permian basin in Texas and New Mexico, base business, and the Jack-St. Malo major capital project in the Gulf of Mexico were partially offset by the effect of 2016 asset sales and normal field declines. Net liquids production increased 6% to 530,000 boe/d, while net gas production fell 6% to 1.03 bcfd primarily as a result of 2016 asset sales.

Chevron’s international downstream operations in the second quarter earned $561 million, down from $741 million a year earlier. The firm said the decline was primarily due to the absence of second-quarter gains on asset sales. Higher margins on refined product sales partially offset the decrease.

International refinery crude input for the firm of 726,000 b/d in the second quarter was down 38,000 b/d from the year-ago period mainly due to crude unit maintenance at the Star Petroleum Refining Co. in Thailand and a major planned turnaround at the company’s refinery in Cape Town.

The firm’s US downstream operations in the second quarter earned $634 million, up from $537 million a year earlier. The rise was primarily due to higher margins on refined product sales and lower operating expenses. Partially offsetting the increases were the absence of second-quarter asset sale gains and higher tax items. US refinery crude input in the second quarter decreased 3% from the year-ago period to 928,000 b/d.

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