SAN RAMON, Calif., July 10 /PRNewswire-FirstCall/ -- Chevron
Corporation (NYSE: CVX) today issued its interim update for the second
quarter of 2007. The company expects second quarter results to benefit from
higher commodity prices in Upstream, stronger refining margins in
Downstream and a gain on the sale of its interest in Dynegy, partially
offset by net charges related to the redemption of debt and other corporate
items.
The interim update contains certain industry and company operating data
for the second 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 July 27, 2007. The reader should not place undue reliance on
this data. Unless noted otherwise, all commentary is based on two months of
the second quarter 2007 vs. full first quarter 2007 results.
UPSTREAM - 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
2Q 3Q 4Q 1Q 2Q thru 2Q thru
May Jun
U.S. Upstream
Net Production:
Liquids MBD 463 464 466 462 470 n/a
Natural Gas MMCFD 1,832 1,846 1,782 1,723 1,714 n/a
BOE MBOED 768 772 763 749 755 n/a
Pricing:
Avg. WTI Spot
Price $/Bbl 70.57 70.56 59.98 58.09 63.70 64.96
Avg. Midway
Sunset Posted
Price $/Bbl 58.71 59.08 48.20 47.08 53.78 55.18
Nat. Gas-Henry
Hub. "Bid Week"
Avg. $/MCF 6.81 6.58 6.56 6.80 7.54 7.56
Nat. Gas-CA
Border "Bid
Week" Avg. $/MCF 5.65 6.09 5.82 6.66 6.68 6.85
Nat. Gas -Rocky
Mountain "Bid
Week" Avg. $/MCF 5.26 5.31 4.67 5.40 3.96 3.72
Average Realizations:
Crude $/Bbl 62.30 63.98 52.98 51.60 57.62 n/a
Liquids $/Bbl 60.07 61.99 51.06 49.91 56.07 n/a
Natural Gas $/MCF 5.89 5.93 5.90 6.40 6.56 n/a
Exploration Expense $MM, B/T 86 76 163 142 n/a n/a
International Upstream
Net Production:
Liquids MBD 1,239 1,267 1,346 1,317 1,315 n/a
Other Produced
Volumes MBD 123 141 35 32 30 n/a
Total MBD 1,362 1,408 1,381 1,349 1,345 n/a
Natural Gas MMCFD 3,234 3,119 3,067 3,271 3,336 n/a
BOE - incl. Other
Produced
Volumes MBOED 1,901 1,928 1,892 1,894 1,901 n/a
Pricing:
Avg. Brent
Spot Price $/Bbl 69.39 69.72 59.44 58.26 67.54 68.73
Average Realizations:
Liquids $/Bbl 62.24 61.90 51.77 51.15 59.92 n/a
Natural Gas $/MCF 3.82 3.66 3.67 3.85 3.70 n/a
Exploration Expense $MM, B/T 179 208 384 164 n/a n/a
U.S. oil-equivalent production increased 1 percent from the first
quarter, as volumes restored from downtime associated with third-party
pipeline disruptions were partially offset by a combination of scheduled
maintenance and other downtime in the Gulf of Mexico, which continued in
June. International oil-equivalent production also rose slightly from the
first quarter.
U.S. crude realizations improved by $6.02 per barrel - in line with the
increase in WTI and California heavy crude prices. International liquids
realizations increased $8.77 per barrel, consistent with the increase in
Brent spot prices. In June, benchmark pricing continued to rise worldwide.
U.S. natural gas realizations increased $0.16 per thousand cubic feet,
while bid week pricing was mixed, with Henry Hub increasing and Rocky
Mountain decreasing.
International Upstream results are expected to include charges of
approximately $100 million for write-offs associated with exploratory wells
and other assets.
DOWNSTREAM - REFINING, MARKETING AND TRANSPORATION
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
2Q 3Q 4Q 1Q 2Q thru 2Q thru
May Jun
Downstream
Market Indicators $/Bbl
Refining Margins
USWC - ANS 5-3-1-1 29.06 19.36 20.55 26.69 33.30 30.28
USGC LHD -
Avg of Mogas +
Dist, less Fuel Oil 37.04 34.10 27.58 28.85 38.24 37.17
Singapore - Dubai
3-1-1-1 8.77 4.07 1.96 5.79 9.19 8.87
N.W. Europe -
Brent 3-1-1-1 1.65 (0.22) (2.06) (0.53) 2.97 2.08
Marketing Margins
U.S. West - LA Mogas
DTW to Spot 1.65 11.08 4.32 2.63 4.57 5.12
U.S. East -
Houston Mogas Rack
to Spot 4.96 7.31 4.64 5.21 3.68 3.99
Asia-Pacific /
Middle East /
Africa 3.27 4.42 5.91 4.39 3.27 n/a
United Kingdom 5.70 7.31 4.89 4.98 5.05 n/a
Latin America 5.28 5.92 5.84 6.08 7.22 n/a
Actual Volumes:
U.S. Refinery Input MBD 935 967 916 729 943 n/a
Int'l Refinery Input MBD 1,063 1,055 987 1,070 918 n/a
U.S. Branded Mogas
Sales MBD 613 625 622 622 628 n/a
U.S. refinery crude-input volumes increased about 30 percent on
completion of the first quarter's turnaround at the company's Richmond,
California, refinery. In June, an extensive planned turnaround of a crude
distillation unit at the company's El Segundo, California refinery was
initiated. The unit was out-of-service for the entire month of June and
work continues into the third quarter. Due to inventory on hand, product
supplies to customers were uninterrupted during the maintenance outage.
Outside the United States, refinery input volumes declined, largely on the
sale of the Nerefco Refinery at the end of the first quarter and a planned
turnaround at the Yeosu Refinery in South Korea.
The U.S. West Coast industry refining indicator improved by about $3.60
per barrel during the three months of the second quarter; however, the
company did not fully benefit from the increase because of the downtime at
the El Segundo Refinery that began in June. The U.S. Gulf Coast
light-heavy-differential marker averaged about $8.30 per barrel higher in
the full second 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 second quarter, the Los Angeles mogas marketing margin
indicator improved by about $2.50 per barrel, while the Houston mogas
indicator declined by about $1.20 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. Outside the United States, indicative marketing margins were
mixed.
Downstream results for the second quarter will include charges for
environmental remediation items in excess of $50 million.
In May, the company announced an agreement to sell its Benelux
marketing assets in Europe. A gain on the sale is expected to be recorded
at the time of close in the third quarter.
CHEMICALS
2006 2007
2Q 3Q 4Q 1Q 2Q thru 2Q thru
May Jun
Chemicals Source: CMAI
Cents/lb
Ethylene Industry
Cash Margin 14.22 17.02 16.12 11.10 10.79 11.21
HDPE Industry Contract
Sales Margin 12.28 13.00 12.10 13.62 14.69 14.45
Styrene Industry Contract
Sales Margin 11.73 11.24 11.51 11.09 11.53 11.13
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, full quarter industry indicator margins were
slightly higher relative to the first quarter.
ALL OTHER
The company's standard guidance for quarterly net after-tax charges
related to corporate and other activities, excluding 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.
Irregularly occurring items in the second quarter include a gain of
approximately $680 million on the sale of the company's investment in
Dynegy and charges of about $160 million related to the redemption of the
outstanding Texaco Capital Bonds. Charges associated with environmental
remediation and other corporate items are also expected to be included in
second quarter results.
MISCELLANEOUS
2006 2007
2Q 3Q 4Q 1Q 2Q thru 2Q thru
May Jun
Other Items
Foreign exchange
effects $MM, A/T (56) (111) 56 (120) (95) n/a
Foreign exchange effects for the first two months of the second quarter
reduced earnings by $95 million, reflecting a weakening of the U.S. dollar
that continued in June. 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 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 our 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 crude oil and
natural gas prices; refining margins and marketing margins; chemicals
prices and competitive conditions affecting supply and demand for
aromatics, olefins and additives products; actions of competitors; timing
of exploration expenses; 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 OPEC
(Organization of Petroleum Exporting Countries); the potential liability
for remedial actions 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 pending or future litigation; the company's
acquisition or disposition of assets; gains and losses from asset
dispositions or impairments; government-mandated sales, divestitures,
recapitalizations, 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 31 and 32 of the
company's 2006 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 report could also have material adverse effects on forward-looking
statements.
SOURCE Chevron Corporation
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