Chevron profit down on lower oil and gas prices

Oil major Chevron saw its profit and revenues drop in the third quarter of the year when compared to the last year’s third quarter affected by lower oil and gas prices. 

Chevron on Friday reported earnings of $2.6 billion for third quarter 2019, compared with $4 billion in the third quarter of 2018.

Included in the current quarter was a tax charge of $430 million related to a cash repatriation. Foreign currency effects increased earnings in the third quarter 2019 by $74 million.

Sales and other operating revenues in third quarter 2019 were $35 billion, compared to $42 billion in the year-ago period.

Michael Wirth, Chevron’s chairman of the board and chief executive officer, said: “Third quarter earnings and cash flow were solid, but down from our very strong results of a year ago.

“Lower crude oil and natural gas prices more than offset a 3 percent increase in net oil-equivalent production from last year’s third quarter.”

Chevron’s worldwide net oil-equivalent production was 3.03 million barrels per day in third quarter 2019, an increase of 3 percent from 2.96 million barrels per day from a year ago.

U.S. upstream operations earned $727 million in third quarter 2019, compared with $828 million a year earlier. The decrease was primarily due to lower crude oil and natural gas realizations, the absence of third quarter 2018 asset sale gains, higher operating expenses and higher tax items. These decreases were partially offset by lower exploration and depreciation expenses, primarily due to the absence of the third quarter 2018 write-off of the Tigris Project in the Gulf of Mexico, and 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 third quarter 2019, down from $62 a year earlier. The average sales price of natural gas was $0.95 per thousand cubic feet in third quarter 2019, down from $1.80 in last year’s third quarter.

Net oil-equivalent production of 934,000 barrels per day in third quarter 2019 was up 103,000 barrels per day from a year earlier.

International upstream operations earned $1.98 billion in third quarter 2019, compared with $2.55 billion a year ago. The decrease in earnings was mostly due to lower crude oil and natural gas realizations, and lower crude oil volumes, partially offset by lower depreciation and tax expenses. Foreign currency effects had a favorable impact on earnings of $91 million between periods.

The average sales price for crude oil and natural gas liquids in third quarter 2019 was $56 per barrel, down from $69 a year earlier. The average sales price of natural gas was $5.62 per thousand cubic feet in the quarter, compared with $6.73 in last year’s third quarter.

Net oil-equivalent production of 2.10 million barrels per day in third quarter 2019 was down 26,000 barrels per day from a year earlier. Production increases from Wheatstone and other major capital projects were more than offset by normal field declines and the effect of asset sales.

Chevron’s capital and exploratory expenditures in the first nine months of 2019 were $15.0 billion, compared with $14.3 billion in the corresponding 2018 period.

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