PRESS RELEASE

Chevron reports Q4 net income of US$415mn

By
Friday, January 27, 2017

Start your 15 day free trial now!

cta-arrow

Already a subscriber? Please, login

San Ramon, Calif., Jan. 27, 2017 - Chevron Corporation (NYSE: CVX) today reported earnings of $415 million ($0.22 per share - diluted) for fourth quarter 2016, compared with a loss of $588 million ($0.31 per share - diluted) in the 2015 fourth quarter. Foreign currency effects increased earnings in the 2016 quarter by $26 million, compared with an increase of $46 million a year earlier.

Full-year 2016 results were a loss of $497 million ($0.27 per share - diluted) compared with earnings of $4.6 billion ($2.45 per share - diluted) in 2015.

Sales and other operating revenues in fourth quarter 2016 were $30 billion, compared to $28 billion in the year-ago period.

"Our 2016 earnings reflect the low oil and gas prices we saw during the year," said Chairman and CEO John Watson. "We responded aggressively to those conditions, cutting capital and operating expenses by $14 billion. We are well positioned to improve earnings and be cash flow balanced in 2017 through continued tight spending and cost control and additional revenue from expected production growth. That confidence enabled us to increase the 2016 annual dividend payout for the 29th consecutive year."

"We were able to reach noteworthy milestones in 2016 on major capital projects," Watson added. "We achieved first gas and cargo shipments at our Gorgon Project in Australia, first gas at our Chuandongbei Project in China, and increased production from our Permian Basin shale and tight oil properties. In addition, we announced the final investment decision on the Future Growth and Wellhead Pressure Management Project at the company's 50 percent- owned affiliate, Tengizchevroil, in Kazakhstan."

Watson commented that the company added approximately 900 million barrels of net oil- equivalent proved reserves in 2016. These additions, which are subject to final reviews, equate to approximately 95 percent of net oil-equivalent production for the year. The largest additions were from the Future Growth Project at Tengizchevroil, the Permian Basin in the United States and the Wheatstone Project in Australia. The company will provide additional details relating to

2016 reserve additions in its Annual Report on Form 10-K scheduled for filing with the SEC on February 23, 2017.

At year-end, balances of cash, cash equivalents and marketable securities totaled $7.0 billion, a decrease of $4.3 billion from the end of 2015. Total debt at December 31, 2016 stood at $46.1 billion, an increase of $7.5 billion from a year earlier.

UPSTREAM

Worldwide net oil-equivalent production was 2.67 million barrels per day in fourth quarter 2016, essentially unchanged from the 2015 fourth quarter. Production increases from major capital projects and base business were offset by normal field declines, the impact of asset sales, production entitlement effects in several locations and the effects of civil unrest in Nigeria. Net oil-equivalent production for the full year 2016 was 2.59 million barrels per day, a decrease of 1 percent from the prior year. Production increases from major capital projects, shale and tight properties, and base business were more than offset by normal field declines, the impact of asset sales, the Partitioned Zone shut-in, the effects of civil unrest in Nigeria and planned turnaround activity.

U.S. upstream operations earned $121 million in fourth quarter 2016 compared with a loss of $1.95 billion from a year earlier. The increase was primarily due to lower depreciation, exploration and operating expenses, and higher crude oil and natural gas realizations.

The company's average sales price per barrel of crude oil and natural gas liquids was $40 in fourth quarter 2016, up from $35 a year ago. The average sales price of natural gas was $1.98 per thousand cubic feet, compared with $1.54 in last year's fourth quarter.

Net oil-equivalent production of 682,000 barrels per day in fourth quarter 2016 was down 37,000 barrels per day, or 5 percent, from a year earlier. Production increases from base business in the Gulf of Mexico and shale and tight properties in the Permian Basin in Texas and New Mexico were more than offset by the impact of asset sales of 58,000 barrels per day and normal field declines. The net liquids component of oil-equivalent production increased 2 percent in the 2016 fourth quarter to 508,000 barrels per day, while net natural gas production decreased 21 percent to 1.04 billion cubic feet per day.

International upstream operations earned $809 million in fourth quarter 2016 compared with $593 million a year earlier. The increase was due to higher crude oil realizations, higher natural gas sales volumes, primarily from the Gorgon Project, and lower operating expenses. Partially offsetting these effects were higher tax items, lower crude oil sales volumes, higher depreciation expenses and lower gains on asset sales. Foreign currency effects increased earnings by $6 million in the 2016 quarter, compared with an increase of $91 million a year earlier.

The average sales price for crude oil and natural gas liquids in fourth quarter 2016 was $44 per barrel, up from $39 a year earlier. The average sales price of natural gas was $4.07 per thousand cubic feet, compared with $3.99 in last year's fourth quarter.

Net oil-equivalent production of 1.99 million barrels per day in fourth quarter 2016 increased 33,000 barrels per day, or 2 percent, from a year ago. Production increases from major capital projects were partially offset by normal field declines, production entitlement effects in several locations and the effects of civil unrest in Nigeria. The net liquids component of oil-equivalent production decreased 3 percent to 1.24 million barrels per day in the 2016 fourth quarter, while net natural gas production increased 11 percent to 4.50 billion cubic feet per day.

DOWNSTREAM

U.S. downstream operations were breakeven in fourth quarter 2016 compared with earnings of $496 million a year earlier. The decrease in earnings was due to lower margins on refined product sales and higher tax items.

Refinery crude oil input in fourth quarter 2016 decreased 21 percent to 721,000 barrels per day from the year-ago period mainly due to planned turnaround activity at the company's refinery in Richmond, California.

Refined product sales of 1.14 million barrels per day decreased 8 percent from fourth quarter 2015. Branded gasoline sales of 525,000 barrels per day were up 2 percent from the 2015 period.

International downstream operations earned $357 million in fourth quarter 2016 compared with $515 million a year earlier. The decrease was primarily due to lower margins on refined product sales, partially offset by lower operating expenses. Foreign currency effects increased earnings by $53 million in fourth quarter 2016, compared with a decrease of $45 million a year earlier.

Refinery crude oil input of 801,000 barrels per day in fourth quarter 2016 increased 18,000 barrels per day from the year-ago period.

Total refined product sales of 1.49 million barrels per day in fourth quarter 2016 increased 1 percent from the year-ago period due to higher gas oil sales.

All Other consists of worldwide cash management and debt financing activities, corporate administrative functions, insurance operations, real estate activities and technology companies.

Net charges in fourth quarter 2016 were $872 million, compared with $238 million in the year-ago period. The change between periods was mainly due to higher tax items and other corporate charges.

CASH FLOW FROM OPERATIONS

Cash flow from operations in 2016 was $12.8 billion, compared with $19.5 billion in 2015. Excluding working capital effects, cash flow from operations in 2016 was $13.4 billion, compared with $21.4 billion in 2015.

CAPITAL AND EXPLORATORY EXPENDITURES

Capital and exploratory expenditures in 2016 were $22.4 billion, compared with $34.0 billion in 2015. The amounts included $3.8 billion in 2016 and $3.4 billion in 2015 for the company's share of expenditures by affiliates, which did not require cash outlays by the company. Expenditures for upstream represented 90 percent of the companywide total in 2016.