Chevron Boosts 3Q Profits, But Upstream Still in Red
Chevron reported $2bn earnings in 3Q2017 – compared with $1.3bn in the year-ago quarter – including a gain on an asset sale of $675mn but also an asset write-off of $220mn.
US supermajor rival Exxon also October 27 announced a similar sharp rise in profitability but, unlike Chevron, that included a profit on its upstream.
“Cash flow is at a positive inflection point, with oil and gas production increasing and capital spending falling,” said Chevron CEO John Watson, who recently announced he will soon retire. He pointed to ramp-up at Gorgon LNG, and first LNG from Wheatstone earlier this month – both in Australia.
Chevron’s net production was 2.72mn boe/d in 3Q2017, up from 2.51mn boe/d in the year-ago quarter.
Of that 681,000 boe/d was in the US – of which oil was up 1% to 525,000 b/d, but gas decreased 13% to 932mn ft3/d primarily as a result of asset sales – while international was 2.04mn boe/d (up 221,000 boe/d) as oil increased 5% to 1.19mn b/d while gas soared 25% higher to 5.05bn ft3/d helpd by Gorgon and Angola LNG ramp-ups.
Chevron upstream made a net loss of $26mn – still only a fraction of last year's Q3 $212mn net loss – not least as its average realised US gas price of $1.80/’000 ft3 was actually less than the year-ago $1.89/'000 ft³. Its US average realised oil price was $42/b, up from $37/b a year before.
Outside the US its average sales price for crude oil and natural gas liquids in third quarter 2017 was $48/b,up from $41/b a year earlier. Its average overseas gas price was $4.76/'000 ft³/d in the quarter, compared with $4.18/'000 ft³ last year.
Mark Smedley