Chevron 2Q Earnings Sharply Higher
US major Chevron said July 27 earnings jumped to $3.3bn in 2Q 2018 from $853mn in the comparable period a year ago, reflecting higher crude oil prices, increased production, strong operations and foreign exchange impacts.
The quarter, Chevron said, was highlighted by the start of production in June from Train 2 at its Wheatstone LNG project in Australia. All five trains at the company’s Australian LNG projects, Gorgon (15.6mn metric tons/year from three trains) and Wheatstone (8.9mn mt/yr from two trains), are now operating.
“Second quarter earnings were up significantly from a year ago,” Chevron CEO Michael Wirth said. “Our cash flow continues to improve with higher upstream margins and volumes, combined with disciplined spending, (enabling) us to initiate share repurchases, which are expected to be $3bn per year based on our current outlook.”
Chevron’s US upstream operations earned $838mn in the second quarter, reversing a $102mn loss a year ago, reflecting higher crude oil production volumes and prices. Natural gas production, however, slipped 5%, to 980mn ft3/day, while average realised gas prices declined to $1.61/’000 ft3 from $2.32/’000 ft3 in the same period last year.
The company’s international upstream operations returned earnings of $2.46bn in the second quarter, up from $955mn a year ago, reflecting higher natural gas sales volumes and improved crude oil and natural gas realisations. Foreign currency impacts increased earnings by $221mn.
Net natural gas production was 10% higher year-over-year, at 5.64bn ft3/day, largely reflecting growing production at the Wheatstone and Gorgon LNG projects. The average natural gas sales price for the quarter rose to $5.64/’000 ft3 from $4.39/’000 ft3 a year ago, Chevron said.