The recent recovery of crude oil prices and the cost reduction measures embarked upon by Chevron Corporation have yielded positive results on the company’s performance as it reported earnings of $1.5 billion for second quarter 2017, compared with a loss of $1.5 billion in the second quarter of 2016.
Included in the quarter were impairments and other non-cash charges totaling $430 million, partially offset by gains on asset sales of $160 million.
Also foreign currency effects increased earnings in the 2017 second quarter by $3 million, compared with an increase of $279 million a year earlier.
According to the results released at the weekend, sales and other operating revenues in second quarter 2017 were $33 billion, compared to $28 billion in the year-ago period.
“Second quarter results improved substantially from a year ago and year-to-date net cash flow is positive,” said Chairman and Chief Executive Officer, John Watson.
“We are delivering higher production with lower capital and operating expenditures. Oil and gas production was up 10 percent in the second quarter from a year ago,” Watson added.
“Our Gorgon LNG Project in Australia closed the quarter running above nameplate capacity and we had record production from our shale and tight resource in the Permian Basin. First production from the Wheatstone LNG Project is expected next month. Operating expenses were down 10 percent and capital spending was down 25 percent in the first six months of the year versus 2016,” Watson commented.
The second quarter results showed that worldwide net oil-equivalent production was 2.78 million barrels per day in second quarter 2017, compared with 2.53 million barrels per day from a year ago.
According to the company, production increases were noted from major capital projects, base business, and shale and tight properties, and lower maintenance-related downtime.
“These impacts were partially offset by normal field declines, production entitlement effects in several locations and the effect of 2016 asset sales,” said the results.
The company’s average sales price per barrel of crude oil and natural gas liquids was $41 in second quarter 2017, up from $36 a year earlier.
The average sales price of natural gas was $2.32 per thousand cubic feet in second quarter 2017, compared with $1.21 in last year’s second quarter.
International upstream operations earned $955 million in second quarter 2017 compared with a loss of $1.35 billion a year ago.
The increase in earnings reflected lower impairment charges, partially offset by higher depreciation expenses from increased production.
The improvement also included lower tax items, higher natural gas sales volumes, higher crude oil realizations and volumes, and lower operating expenses.
Foreign currency effects decreased earnings by $4 million in the 2017 second quarter, compared with an increase of $329 million a year earlier.
The average sales price for crude oil and natural gas liquids in second quarter 2017 was $45 per barrel, up from $40 a year earlier.
The average price of natural gas was $4.39 per thousand cubic feet in the quarter, compared with $3.93 in last year’s second quarter.
Net oil-equivalent production of 2.08 million barrels per day in second quarter 2017 was up 233,000 barrels per day from a year earlier.