Chevron Corporation reported earnings of $2.7 billion for first quarter 2017, compared with a loss of $725 million in the 2016 first quarter.
The company’s net income for fourth quarter 2016 had dropped to $415 million, compared with a loss of $588 million in the 2015 fourth quarter as a result of the effects of what the company called civil unrest in Nigeria, coupled with normal field declines and the impact of asset sales.
Included in the first quarter of 2017 was a gain of approximately $600 million from the sale of an upstream asset.
Foreign currency effects decreased earnings in first quarter 2017 by $241 million, compared with a decrease of $319 million a year earlier.
Sales and other operating revenues in first quarter 2017 were $32 billion, compared to $23 billion in the year-ago period
The company’s Chairman and Chief Executive Officer, John Watson said first quarter earnings and cash flow improved significantly from a year ago.
“We benefitted from increasing crude oil prices and ongoing efficiencies being implemented across the company. We continue to make good progress on reducing our spend,” Watson said.
“Our operating expenses were reduced by about 14 percent from first quarter 2016 and our capital spending declined over 30 percent from a year ago. We started up several new projects and have all three trains at Gorgon online. We also progressed our asset sales programme. The combination of these actions contributed to a cash positive first quarter. Overall net oil-equivalent production in the first quarter increased 3 percent compared to the 2016 full year and we are on track to meet the 4-9 percent growth goal for 2017 before the effect of asset sales,” Watson added.
Worldwide net oil-equivalent production was 2.68 million barrels per day in first quarter 2017, compared with 2.67 million barrels per day in the 2016 first quarter. Production increases from major capital projects and base business were largely offset by production entitlement effects in several locations, normal field declines and the impact of asset sales.
US upstream operations earned $80 million in first quarter 2017, compared with a loss of $850 million from a year earlier.
The increase was primarily due to higher crude oil realisations and lower depreciation and operating expenses.
The company’s average sales price per barrel of crude oil and natural gas liquids was $45 in first quarter 2017, up from $26 a year ago. The average sales price of natural gas was $2.39 per thousand cubic feet, compared with $1.32 in last year’s first quarter.
Net oil-equivalent production of 672,000 barrels per day in first quarter 2017 was down 29,000 barrels per day, or four per cent, from a year earlier. Production increases from base business in the Gulf of Mexico, shale and tight properties in the Permian Basin in Texas and New Mexico, and the Jack/St. Malo major capital project were more than offset by the impact of asset sales of 68,000 barrels per day, and normal field declines.
The net liquids component of oil-equivalent production increased three per cent in first quarter 2017 to 504,000 barrels per day, while net natural gas production decreased 21 per cent to 1.01 billion cubic feet per day.