Chevron Earnings Down

Chevron reported earnings of $ 4.9 billion for the fourth quarter of 2013, compared with $7.2 billion  in the 2012 fourth quarter.

Full – year 2013 earnings were $21. 4 billion ($11. 0 9 per share – diluted), down 18 percent from $26.2 billion ($13.32 per share – diluted) in 2012. Sales and other operating revenues in the fourth quarter 2013 were $54 billion, compared to $56 billion in the year – ago period.

“Global crude oil prices and refining margins were generally lower in 2013 than 2012 ,” said Chairman and CEO John Watson. “These conditions, as well as lower gains on asset sales and higher expenses, resulted in lower earnings. We continue to have an advantaged portfolio, and we have maintained our industry – leading position in upstream earnings per barrel for the past four years.”

“Our strong financial position and healthy cash generation in 2013 have allowed us to fund a substantial investment program, add several new resource opportunities and , at the same time, raise shareholder distributions. Major capital projects currently under construction are expected to deliver significant production growth and shareholder value in the years ahead. We also raised the dividend on our common shares for the 26 th consecutive year and continued our share repurchase program , both of which underscore our commitment to providing strong shareholder returns.”

Watson continued, “We made significant progress on our LNG projects in Australia during the past year , with Gorgon almost 75 percent complete and Wheatstone successfully reaching important construction and LNG marketing milestones . We expect 2014 will be the peak year for spending on these two projects as we move them closer to first production. Significant progress was also made at two important Gulf of Mexico deepwater projects, Jack/St. Malo and Big Foot.”

“We continued to pursue shale and tight – rock opportunities during 2013,” Watson noted. Key achievements included major new investments in the Vaca Muerta Shale in Argentina and the Kitimat LNG Project in Canada, acquisition of additional acreage in the Duvernay Shale in Canada, and securing new shale opportunities in Ukraine and central Australia .

Watson commented that the company added approximately 800 million barrels of net oil – equivalent proved reserves in 2013 . These additions, which are subject to final reviews, equate to approximately 8 5 percent of net oil – equivalent production for the year. The largest additions were for the Marcellus Shale and the Permian Basin in the United States. Also, significant were additions for fields in Asia and Africa. The company’s three – year average reserve replacement ratio is 123 percent of net oil – equivalent production. The company will provide additional details relating to 2013 reserve additions in its Annual Report on Form 10 – K scheduled for filing with the SEC on February 2 1, 2014 .

“In the downstream, we progressed our new premium base – oil plant in Pascagou la, Mississippi, and look forward to start – up in early 2014,” Watson continued. “In addition, Chevron Phillips Chemical reached a final investment decision on a new ethane cracker in Texas. Both of these projects advance our strategy of focusing investment s on higher growth and higher margin products.

“The company purchased $1.25 billion of its common stock in fourth quarter 2013 under its share repurchase program. Repurchases for the full year totaled $5 billion. At year – end, balances of cash, cash equivalents, time deposits and marketable securities totaled $ 16.5 billion, a decrease of $ 5.4 billion from the end of 2012. Total debt at December 31, 2013 stood at $ 20.4 billion, an increase of $ 8.2 billion from a year earlier .”

LNG World News Staff, February 3, 2014; Image: Chevron

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