SAN RAMON, Calif., April 10 /PRNewswire-FirstCall/ -- Chevron
Corporation (NYSE: CVX) today issued its interim update for the first
quarter of 2007. Relative to fourth quarter earnings, the company expects
results in the first quarter to benefit from a gain on the sale of the
company's interest in manufacturing assets in the Netherlands, partially
offset by the effects of lower refinery utilization attributable to
downtime on the U.S. West Coast and lower prices for crude oil and natural
gas liquids on Upstream.
The interim update contains certain industry and company operating data
for the first quarter. The production volumes, realizations, margins, and
other identified 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 April 27, 2007. The reader should not place undue reliance on
this data.
Unless noted otherwise, all commentary is based on two months of the
first quarter 2007 versus full fourth quarter 2006 results.
EXPLORATION AND PRODUCTION
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 results are
driven by actual liftings, which may differ from production due to the
timing of cargoes and other factors.
2006 2007
1 Q 1 Q
through through
1Q 2Q 3Q 4Q February March
U.S. Upstream
Net Production:
Liquids MBD 453 463 464 466 458 n/a
Natural Gas MMCFD 1,782 1,832 1,846 1,782 1,689 n/a
BOE MBOED 750 768 772 763 740 n/a
Pricing:
Avg. WTI Spot Price $/Bbl 63.35 70.57 70.56 59.98 56.69 58.09
Avg. Midway Sunset
Posted Price $/Bbl 51.28 58.71 59.08 48.20 45.66 47.08
Nat. Gas-Henry Hub.
"Bid Week" Avg. $/MCF 8.99 6.81 6.58 6.56 6.41 6.80
Nat. Gas-CA Border
"Bid Week" Avg. $/MCF 7.77 5.65 6.09 5.82 6.45 6.66
Nat. Gas-Rocky
Mountain "Bid
Week" Avg. $/MCF 7.17 5.26 5.31 4.67 5.08 5.40
Average Realizations:
Crude $/Bbl 54.99 62.30 63.98 52.98 50.33 n/a
Liquids $/Bbl 53.45 60.07 61.99 51.06 48.80 n/a
Natural Gas $/MCF 7.46 5.89 5.93 5.90 6.16 n/a
Exp. Expense $MM, B/T 106 86 76 163 n/a n/a
International Upstream
Net Production:
Liquids MBD 1,228 1,239 1,267 1,346 1,314 n/a
Other Produced
Volumes MBD 138 123 141 35 31 n/a
Total MBD 1,366 1,362 1,408 1,381 1,345 n/a
Natural Gas MMCFD 3,165 3,234 3,119 3,067 3,156 n/a
BOE - incl. Other
Produced Volumes MBOED 1,894 1,901 1,928 1,892 1,871 n/a
Pricing:
Avg. Brent
Spot Price $/Bbl 61.88 69.39 69.72 59.44 55.79 58.26
Average Realizations:
Liquids $/Bbl 55.13 62.24 61.90 51.77 49.05 n/a
Natural Gas $/MCF 3.78 3.82 3.66 3.67 3.93 n/a
Exp. Expense $MM, B/T 162 179 208 384 n/a n/a
Combined U.S. liquids and natural gas production declined 3 percent
from the fourth quarter due to third-party pipeline downtime affecting the
Gulf of Mexico and San Joaquin Valley regions. Combined international
liquids and natural gas production was down 1 percent from the fourth
quarter.
U.S. crude realizations decreased by $2.65 per barrel -- in line with
the 5 percent decrease in WTI and California heavy crude prices.
International liquids realizations declined $2.72 per barrel, less than the
decrease in Brent spot prices due to country mix effects. Benchmark pricing
partially recovered in March worldwide.
U.S. natural gas realizations increased $0.26 per thousand cubic feet
-- more than a composite of bid-week price changes for Henry Hub, Rocky
Mountain and California border, due to the mix of production in the various
regions and spot sales.
REFINING AND MARKETING
The table that follows includes industry benchmark indicators for
refining and marketing margins. Actual margins realized by the company may
differ significantly due to location and product mix effects, planned and
unplanned shutdown activity and other company-specific and operational
factors.
2006 2007
1 Q 1 Q
through through
1Q 2Q 3Q 4Q February March
Downstream
Market Indicators $/Bbl
Refining Margins
USWC - ANS 5-3-1-1 18.32 29.06 19.36 20.55 23.65 26.69
USGC LHD - Avg of
Mogas + Dist, less
Fuel Oil 25.56 37.04 34.10 27.58 26.08 28.85
Singapore -
Dubai 3-1-1-1 4.21 8.77 4.07 1.96 5.10 5.79
N.W. Europe -
Brent 3-1-1-1 0.12 1.65 (0.22) (2.06) (0.80) (0.53)
Marketing Margins
U.S. West - LA Mogas
DTW to Spot 1.11 1.65 11.08 4.32 4.08 2.63
U.S. East - Houston
Mogas Rack to Spot 2.02 4.96 7.31 4.64 5.88 5.21
Asia-Pacific /
Middle East / Africa 4.16 3.27 4.42 5.91 4.72 n/a
United Kingdom 3.95 5.70 7.31 4.89 4.00 n/a
Latin America 6.21 5.28 5.92 5.84 5.99 n/a
Actual Volumes:
U.S. Refinery Input MBD 939 935 967 916 733 n/a
Int'l Refinery Input MBD 1,082 1,063 1,055 987 1,085 n/a
U.S. Branded Mogas Sales MBD 595 613 625 622 609 n/a
Footnote
Effective April 1, 2006, the company adopted a new accounting standard,
Emerging Issues Task Force (EITF) Issue No. 04-13, "Accounting for
Purchases and Sales of Inventory with the Same Counterparty" and reported
prospectively the net effect of buy/sell transactions that fall within the
scope of this statement on its Consolidated Statement of Income as
"Purchased crude oil and products." This accounting change had no effect on
Chevron's reported net income but resulted in a reduction in reported
"Sales and other operating revenues" and refined products sales volumes.
U.S. refinery crude-input volumes declined 20 percent due to downtime
at the company's Richmond, California, refinery. During the quarter, the
refinery crude unit underwent a planned turnaround, which was extended by
repairs associated with a fire that occurred as the unit was being brought
down. The crude unit was out of service from mid-January through the
remainder of the quarter. Outside the United States, refinery input volumes
increased, as the fourth quarter's planned downtime at the Pembroke
Refinery was completed.
The U.S. West Coast industry refining indicator improved by about $6
per barrel during the three months of the first quarter; however, the
company will not fully benefit from the increase because of the downtime at
the Richmond Refinery. The U.S. Gulf Coast light-heavy-differential marker
averaged about $1.25 per barrel higher in the full first quarter. Outside
the United States, benchmark refining margins were also higher; however,
for the first two months of the quarter, actual refining margins realized
were lower than indicator margins.
During the full first quarter, the Los Angeles mogas marketing margin
indicators declined by about $1.70 per barrel, while the Houston mogas
indicator rose by about $0.60 per barrel. For the first two months of the
quarter, actual marketing margins realized in the United States were lower
than indicator margins reflecting different product and location mix
effects. Internationally, indicative marketing margins were generally
weaker, except in Latin America.
On March 31, the company completed the sale of its 31 percent interest
in the Nerefco Refinery in the Netherlands. First quarter results are
expected to include an after-tax gain of approximately $700 million.
CHEMICALS
2006 2007
1 Q 1 Q
through through
1Q 2Q 3Q 4Q February March
Chemicals - Source: CMAI Cents/lb
Ethylene Industry Cash Margin 20.82 14.22 17.02 16.12 11.77 11.26
HDPE Industry Contract Sales
Margin 15.04 12.16 12.88 11.99 12.33 13.47
Styrene Industry Contract
Sales Margin 12.31 11.73 11.24 11.51 11.20 10.91
Footnote
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 sector 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.
In the Chemicals segment, industry indicator margins were mixed
relative to the fourth quarter.
ALL OTHER
The company's standard guidance for quarterly net after-tax charges
related to corporate and other activities, excluding the company's equity
share of Dynegy's results and Dynegy-related effects, is between $160
million and $200 million. Due to the potential for irregularly occurring
accruals related to tax items, pension settlements, and other corporate
items, actual results may differ.
For the first quarter, favorable tax-related effects at the corporate
level are expected to substantially offset corporate charges for the
period.
MISCELLANEOUS
2006 2007
1 Q 1 Q
through through
1Q 2Q 3Q 4Q February March
Other Items
Foreign exchange
effects $ MM, A/T (108) (56) (111) 56 (51) n/a
Foreign exchange effects for the first two months of the first quarter
were negative at ($51) million, reflecting a weakening of the U.S. dollar.
A further negative effect is expected in March. Foreign exchange effects
are reported in the segment results.
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 contains forward-looking statements that are based
on management's current expectations, estimates and projections. These
statements are subject to certain risks, uncertainties and other factors.
Words such as "anticipates," "expects," "intends," "plans," "targets,"
"projects," "believes," "seeks," "schedules," "estimates" and similar
expressions are intended to identify such forward-looking statements.
Actual outcomes and results may differ materially from what is expressed or
forecasted in such forward-looking statements. Among the factors that could
cause actual results to differ materially are the effects on the company's
earnings from changes in prices of and demand for crude oil and natural
gas; timing of exploration expenses; potential failure to achieve expected
production from existing and future oil and gas development projects;
potential disruption or interruption of the company's production or
manufacturing facilities due to war, accidents, political events, civil
unrest and severe weather; gains or losses from asset dispositions or
impairments; and foreign currency movements compared with the U.S. dollar,
and the factors set forth under the heading "Risk Factors" on pages 31 and
32 of the company's 2006 Annual Report on Form 10-K. Unless legally
required, Chevron undertakes no obligation to update publicly the
information contained in this Interim Update.
SOURCE Chevron Corporation
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