Chevron Issues Interim Update for Second Quarter 2010
SAN RAMON, Calif., Jul 12, 2010 (BUSINESS WIRE) --
Copyright Business Wire 2010
Chevron Corporation (NYSE:CVX) today reported in its interim update that
earnings for the second quarter 2010 are expected to be higher than in
the first quarter. Upstream earnings are projected to be in line with
first quarter results. Downstream results, inclusive of the former
Chemicals business segment, are expected to be significantly higher than
the first quarter. Additionally, earnings are expected to benefit from
favorable non-cash foreign currency effects due to the strengthening of
the U.S. dollar in the second quarter.
Basis for Comparison in Interim Update
The interim update contains certain industry and company operating data
for the second quarter 2010. The production volumes, realizations,
margins and certain other items in the report are based on a portion of
the quarter and are not necessarily indicative of Chevron's quarterly
results to be reported on July 30, 2010. The reader should not place
undue reliance on this data.
Unless noted otherwise, all commentary is based on two
months of the second quarter 2010 versus full
first quarter 2010 results.
UPSTREAM
The table that follows includes information on production and price
indicators for crude oil and natural gas for specific markets. Actual
realizations may vary from indicative pricing due to quality and
location differentials and the effect of pricing lags. International
earnings are driven by actual liftings, which may differ from production
due to the timing of cargoes and other factors.
(1) The Avg. Brent Spot Price is based on Platts daily
assessments, using Chevron's internal formula to produce a quarterly
average.
Total U.S. net oil-equivalent production during the first two months of
the second quarter decreased 20,000 barrels per day compared to the
first quarter average, reflecting small declines across multiple assets.
International net oil-equivalent production decreased 19,000 barrels per
day, driven by planned maintenance in Kazakhstan and Canada, partly
offset by continued production ramp up in Brazil.
U.S. crude oil realizations increased $1.85 per barrel to $75.17 during
the first two months of the second quarter. International liquids
realizations increased $3.19 per barrel to $73.24. U.S. natural gas
realizations decreased $1.33 to $3.96 per thousand cubic feet compared
to the first quarter. International natural gas realizations declined
slightly to $4.45 per thousand cubic feet.
DOWNSTREAM
The table that follows includes industry benchmark indicators for
refining, marketing and chemicals margins. Actual margins realized by
the company will differ due to crude and product mix effects, planned
and unplanned shutdown activity and other company-specific and
operational factors.
Note: Prices, economics, and views expressed by CMAI are strictly
the opinion of CMAI and Purvin & Gertz and are based on information
collected within the public domain and on assessments by CMAI and Purvin
& Gertz staff utilizing reasonable care consistent with normal industry
practice. CMAI and Purvin & Gertz make no guarantee or warranty and
assume no liability as to their use.
For the full second quarter, U.S. refining indicator margins improved
from the first quarter, while international refining and worldwide
marketing indicator margins were mixed. Chemical indicator margins
improved between periods.
During the first two months of the second quarter, daily U.S. refinery
crude-input volumes increased 28,000 barrels per day following planned
maintenance. Outside the United States, refinery crude-input volumes
were down 74,000 barrels per day, largely due to planned maintenance at
the Cape Town refinery in South Africa.
Downstream earnings in the second quarter are expected to benefit from
stronger U.S. refining margins, favorable foreign currency impacts and
timing effects due to declining commodity prices between the beginning
and end of the quarter. First quarter downstream results included a
severance charge of $150 million associated with employee reductions.
ALL OTHER
The company's general guidance for the quarterly net after-tax charges
related to corporate and other activities is between $250 million and
$350 million. Due to foreign currency effects and the potential for
irregularly occurring accruals related to income taxes, pension
settlements and other matters, actual results may significantly differ
from the guidance range. Total net charges in the second quarter are
expected to be lower than the guidance range.
NOTICE
Chevron's discussion of second quarter 2010 earnings with security
analysts will take place on Friday, July 30, 2010, at 8:00 a.m. PDT. A
webcast of the meeting will be available in a listen-only mode to
individual investors, media, and other interested parties on Chevron's
website at www.chevron.com
under the "Investors" section. Additional financial and operating
information will be contained in the Earnings Supplement that will be
available under "Events & Presentations" in the "Investors" section on
the website.
CAUTIONARY STATEMENT RELEVANT TO FORWARD-LOOKING INFORMATION FOR
THE PURPOSE OF "SAFE HARBOR'' PROVISIONS OF THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995
This interim update of Chevron Corporation contains forward-looking
statements relating to Chevron's operations that are based on
management's current expectations, estimates and projections about the
petroleum, chemicals and other energy-related industries. Words such as
"anticipates," "expects," "intends," "plans," "targets," "projects,"
"believes," "seeks," "schedules," "estimates," "budgets" and similar
expressions are intended to identify such forward-looking statements.
These statements are not guarantees of future performance and are
subject to certain risks, uncertainties and other factors, some of which
are beyond the company's control and are difficult to predict. Therefore,
actual outcomes and results may differ materially from what is expressed
or forecasted in such forward-looking statements. The reader
should not place undue reliance on these forward-looking statements,
which speak only as of the date of this interim update. Unless
legally required, Chevron undertakes no obligation to update publicly
any forward-looking statements, whether as a result of new information,
future events or otherwise.
Among the important factors that could cause actual results to differ
materially from those in the forward-looking statements are: changing
crude-oil and natural-gas prices; changing refining, marketing and
chemical margins; actions of competitors or regulators; timing of
exploration expenses; timing of crude-oil liftings; the competitiveness
of alternate-energy sources or product substitutes; technological
developments; the results of operations and financial condition of
equity affiliates; the inability or failure of the company's
joint-venture partners to fund their share of operations and development
activities; the potential failure to achieve expected net production
from existing and future crude-oil and natural-gas development projects;
potential delays in the development, construction or start-up of planned
projects; the potential disruption or interruption of the company's net
production or manufacturing facilities or delivery/transportation
networks due to war, accidents, political events, civil unrest, severe
weather or crude-oil production quotas that might be imposed by the
Organization of Petroleum Exporting Countries; the potential liability
for remedial actions or assessments under existing or future
environmental regulations and litigation; significant investment or
product changes under existing or future environmental statutes,
regulations and litigation; the potential liability resulting from other
pending or future litigation; the company's future acquisition or
disposition of assets and gains and losses from asset dispositions or
impairments; government-mandated sales, divestitures, recapitalizations,
industry-specific taxes, changes in fiscal terms or restrictions on
scope of company operations; foreign-currency movements compared with
the U.S. dollar; the effects of changed accounting rules under generally
accepted accounting principles promulgated by rule-setting bodies; and
the factors set forth under the heading "Risk Factors" on pages 30
through 32 of the company's 2009 Annual Report on Form 10-K. In
addition, such statements could be affected by general domestic and
international economic and political conditions. Unpredictable or
unknown factors not discussed in this interim update could also have
material adverse effects on forward-looking statements.
SOURCE: Chevron Corporation
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