Chevron Issues Interim Update for Third Quarter 2012
09.10.2012 | Business Wire
Basis for Comparison in Interim Update UPSTREAM U.S. Upstream International Upstream 1 As of second quarter 2012, Avg. Midway Sunset Posted 2 The Avg. Brent Spot Price is based on Platts daily DOWNSTREAM Downstream Market Indicators: Refining Margins Marketing Margins Actual Volumes: 3 As of June 2012, Star Petroleum Refining Company ALL OTHER NOTICE Chevron′s discussion of third quarter 2012 earnings with security CAUTIONARY STATEMENTS RELEVANT TO FORWARD-LOOKING INFORMATION This interim update of Chevron Corporation contains forward-looking Among the important factors that could cause actual results to differ
Chevron Corporation (NYSE: CVX) today reported in its interim update
that earnings for the third quarter 2012 are expected to be
substantially lower than second quarter 2012. Upstream results are
projected to be lower between sequential quarters, reflecting foreign
exchange losses and lower liftings and realizations, partially offset by
an asset sale gain. Downstream earnings in the third quarter are
expected to be significantly lower than second quarter 2012, reflecting
the impact of negative timing effects, lower realized margins and the
negative effects of several smaller unrelated items.
This interim update contains certain industry and company operating data
for the third quarter 2012. 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 full
quarterly results to be reported on November 2, 2012. The reader should
not place undue reliance on this data.
Readers are advised that portions of the commentary below compare
results for the first two months of the
third quarter 2012 to full second quarter
2012 results, as indicated.
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 reflect actual liftings, which may differ from production due
to the timing of cargoes and other factors.
?
?
2011
?
2012 3Q
?
4Q 1Q
?
2Q
?
3Q thru Aug
?
3Q thru Sep
?
Net Production:
Liquids
MBD
453
447
456
461
442
n/a
Natural Gas
MMCFD
1,260
1,290
1,170
1,186
1,185
n/a
Total Oil-Equivalent
MBOED
662
661
651
659
640
n/a
?
Pricing:
Avg. WTI Spot Price
$/Bbl
89.51
93.98
103.00
93.34
91.19
92.25
Avg. Midway Sunset Posted Price1
$/Bbl
102.99
107.83
112.01
102.72
99.15
100.71
Nat. Gas-Henry Hub 'Bid Week' Avg.
$/MCF
4.20
3.55
2.73
2.21
2.89
2.81
Nat. Gas-CA Border 'Bid Week' Avg.
$/MCF
4.32
3.74
2.96
2.40
2.97
2.91
Nat. Gas-Rocky Mountain 'Bid Week' Avg.
$/MCF
3.81
3.35
2.56
1.88
2.53
2.46
?
Average Realizations:
Crude
$/Bbl
101.27
105.37
108.37
103.91
95.44
n/a
Liquids
$/Bbl
96.75
100.65
101.93
97.46
89.05
n/a
Natural Gas
$/MCF
4.14
3.62
2.48
2.17
2.67
n/a
?
Net Production:
Liquids
MBD
1,353
1,369
1,338
1,317
1,241
n/a
Natural Gas
MMCFD
3,496
3,658
3,849
3,894
3,819
n/a
Total Oil Equivalent
MBOED
1,937
1,980
1,980
1,965
1,878
n/a
?
Pricing:
Avg. Brent Spot Price 2
$/Bbl
113.41
109.35
118.60
108.29
107.98
109.50
?
Average Realizations:
Liquids
$/Bbl
102.82
101.33
110.03
99.21
96.86
n/a
Natural Gas
?
$/MCF
?
5.50
?
5.55
?
5.88
?
6.10
?
5.99
?
n/a
Price is based on the average of four companies′ posted prices to
better reflect realizations. Prior to second quarter 2012, the
price is based only on the Chevron average posting.
assessments, using Chevron′s internal formula to produce a
quarterly average.
?
U.S. net oil-equivalent production decreased 19,000 barrels per day
during the first two months of the third quarter, largely reflecting
impacts from Hurricane Isaac. International net oil-equivalent
production during the first two months of the third quarter decreased
87,000 barrels per day. Planned maintenance in Kazakhstan and the United
Kingdom caused the majority of the decline. The company expects
increased production in the fourth quarter 2012 compared to the third
quarter 2012, reflecting the completion of planned turnarounds and
restoration of shut in production in the Gulf of Mexico.
International upstream earnings in the third quarter are expected to
include a gain of approximately $600 million from the previously
announced sale of an equity interest in the Wheatstone LNG project.
U.S. crude oil realizations decreased $8.47, to $95.44 per barrel during
the first two months of the third quarter, consistent with the typical
monthly lag on pricing in the Gulf of Mexico. International liquids
realizations decreased $2.35, to $96.86 per barrel. U.S. natural gas
realizations increased $0.50 to $2.67 per thousand cubic feet, while
international natural gas realizations decreased $0.11 to $5.99 per
thousand cubic feet during the first two months of the third quarter.
The table that follows includes industry benchmark indicators for
refining and marketing 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.
?
?
2011
?
2012 3Q
?
4Q 1Q
?
2Q
?
3Q thru Aug
?
3Q thru Sep
?
$/Bbl
U.S. West Coast ? Blended 5-3-1-1
14.31
14.45
19.64
21.32
22.55
24.37
U.S. Gulf Coast ? Maya 5-3-1-1
24.45
11.84
20.56
24.89
27.94
28.19
Singapore ? Dubai 3-1-1-1
10.39
8.77
9.73
9.30
11.10
10.77
U.S. West ? Weighted DTW to Spot
5.07
5.39
4.16
10.14
4.85
5.74
U.S. East ? Houston Mogas Rack to Spot
4.46
4.35
3.90
5.10
3.46
3.99
Asia-Pacific / Middle East / Africa
6.19
5.65
4.75
6.98
6.32
n/a
U.S. Refinery Input
MBD
897
763
926
928
836
n/a
Int′l Refinery Input3
MBD
882
805
779
870
912
n/a
U.S. Branded Mogas Sales
?
MBD
?
529
?
515
?
505
?
521
?
526
?
n/a
crude-input volumes are reported on a consolidated basis. Prior to
June 2012, crude-input volumes are reported on a net interest
basis.
?
For the full third quarter, U.S. and international refining margins
increased compared to second quarter 2012, while U.S. marketing margins
decreased sharply over the same period, particularly for the U.S. West
Coast.
During the first two months of the third quarter, U.S. refinery
crude-input volumes decreased by 92,000 barrels per day compared to the
second quarter, largely reflecting the shutdown of the Richmond,
California refinery crude unit in early August following a fire. The
Richmond crude unit is expected to remain offline through the fourth
quarter of 2012. Additionally, U.S. refinery crude-input volumes reflect
disruptions from Hurricane Isaac at the Pascagoula, Mississippi
refinery. International refinery crude-input volumes increased 42,000
barrels per day compared to the second quarter, reflecting a change in
reporting for Star Petroleum Refining Company to gross input volumes,
effective June 2012.
Downstream earnings in the third quarter are also expected to reflect
unfavorable inventory impacts and negative mark-to-market effects on
open derivative contracts tied to underlying physical positions, as
opposed to notably positive contributions from these items in the second
quarter. International downstream earnings are also expected to decrease
substantially between sequential quarters due to several unrelated
items, including charges associated with portfolio restructuring in
Australia, as well as lower gains on asset transactions.
The company′s general guidance for the quarterly net after-tax charges
related to corporate and other activities is between $300 million and
$400 million. Due to the potential for non-ratable accruals related to
income taxes, pension settlements, environmental and other matters,
actual results may significantly differ from the guidance range. Total
net charges for the third quarter are expected to be notably higher than
the general guidance range.
analysts will take place on Friday, November 2, 2012, 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.
FOR
THE PURPOSE OF 'SAFE HARBOR'' PROVISIONS OF THE
PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995
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,? 'forecasts,?
'projects,? 'believes,? 'seeks,? 'schedules,? 'estimates,? 'budgets,?
'outlook? 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.
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 29
through 31 of the company′s 2011 Annual Report on Form 10-K. In
addition, such results could be affected by general domestic and
international economic and political conditions. Other unpredictable or
unknown factors not discussed in this interim update could also have
material adverse effects on forward-looking statements.
Chevron Corporation
Justin Higgs, 925-790-3327