Chevron swings to $6.6 billion quarterly loss

Oil major Chevron sank to a loss in the fourth quarter of 2019 from a profit in the same period of 2018 due to impairments and write-offs and lower crude oil and natural gas prices.

Chevron on Friday reported a loss of $6.6 billion for fourth quarter 2019, compared with earnings of $3.7 billion in the fourth quarter 2018.

Included in the current quarter were previously announced upstream impairments and write-offs totaling $10.4 billion associated with Appalachia shale, Kitimat LNG, Big Foot and other projects.

The company also recognized a $1.2 billion gain on the sale of the U.K. Central North Sea assets in the fourth quarter. Foreign currency effects decreased earnings in the fourth quarter 2019 by $256 million.

The company’s revenues dropped to $36.4 billion in 4Q 2019 from $42.4 billion in 4Q 2018.

Full-year 2019 earnings were $2.9 billion, compared with $14.8 billion in 2018. Included in 2019 were net charges for special items of $8.7 billion, compared to net charges of $1.2 billion for special items in 2018. Foreign currency effects decreased earnings in 2019 by $304 million.

Sales and other operating revenues in fourth quarter 2019 were $35 billion, compared to $40 billion in the year-ago period.

“Cash flow from operations remained strong in 2019, allowing the company to deliver on all our financial priorities,” said Michael K. Wirth, Chevron’s chairman of the board and chief executive officer.

“We paid $9 billion in dividends, repurchased $4 billion of shares, funded our capital program and successfully captured several inorganic investment opportunities, all while reducing debt by more than $7 billion. Earlier this week, we announced a quarterly dividend increase of $0.10 per share, reinforcing our commitment to growing shareholder returns.”

Worldwide net oil-equivalent production was 3.08 million barrels per day in fourth quarter 2019, unchanged from a year ago.

U.S. upstream recorded a loss of $7.5 billion in fourth quarter 2019, compared with earnings of $964 million a year earlier. The decrease was primarily due to $8.2 billion in impairment charges primarily associated with Appalachia shale and Big Foot. Also contributing to the decrease were lower crude oil and natural gas realizations. Partially offsetting these items were higher crude oil and natural gas production.

The company’s average sales price per barrel of crude oil and natural gas liquids was $47 in fourth quarter 2019, down from $56 a year earlier. The average sales price of natural gas was $1.10 per thousand cubic feet in fourth quarter 2019, down from $2.01 in last year’s fourth quarter.

Net oil-equivalent production of 998,000 barrels per day in fourth quarter 2019 was up 140,000 barrels per day from a year earlier.

Chevron’s peer ExxonMobil earlier on Friday posted a 5 percent decrease in earnings, which totalled $5.7 billion in 4Q 2019. Earlier this week, Hess said it had recorded a bigger loss for 4Q 2019 compared to the prior-year period.

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