Chevron, the US-based energy company and the operator of the giant Gorgon and Wheatstone LNG projects in Australia, reported a surge in its fourth-quarter profit, mainly due to the recent U.S. tax reform.
Chevron is the second US company, following ExxonMobil, to post a surge in its earnings on Friday due to benefits related to recent U.S. tax reform to revalue deferred taxes.
The San Ramon, California-based company posted profits of $3.1 billion, or $1.64 per share, for the final quarter of 2017 as compared with $415 million or $0.22 per share in the 2016 fourth quarter. These numbers included a $2 billion tax benefit.
Full-year 2017 earnings were $9.2 billion or $4.85 per share, compared with a loss of $497 million or $0.27 per share in 2016.
“Earnings and cash flow grew significantly in 2017,” said Chairman and CEO Michael Wirth.
“We achieved our objective of being cash flow positive through deliberate actions to reduce capital expenditures, lower our cost structure, start and ramp-up projects, and conclude planned asset sales. Higher commodity prices helped as well. These improvements give us the confidence to increase the dividend by $0.04 per share, which puts us on track to make 2018 the 31st consecutive year with an increase in annual dividend payout.”
The company added approximately 1.54 billion barrels of net oil-equivalent proved reserves in 2017. These additions, which are subject to final reviews, equate to approximately 155 percent of net oil-equivalent production for the year. The largest additions were from the Permian Basin in the United States and the Gorgon project in Australia.
“Our net oil-equivalent production grew by 5 percent in 2017, including the effects of asset sales,” Wirth commented. “Importantly, we expect that our 2018 production will continue to grow by 4 to 7 percent, driven primarily by Australian LNG and the acceleration of development activities in the Permian, where investment economics continue to improve.”
The company’s board of directors approved a $0.04 per share increase in the quarterly dividend to $1.12 per share.
Gorgon and Wheatstone LNG production rising
Chevron had four liquefaction trains online at the two LNG export projects in Western Australia by the end of 2017 – three at Gorgon and one at Wheatsone.
The company expects to fire-up the second unit at Wheatstone in the second quarter of this year.
According to Chevron, the fourth-quarter production at the Wheatstone plant in Western Australia’s Pilbara region averaged 32,000 barrels of oil equivalent per day while January production was at 86,000 barrels of oil equivalent per day.
On the other side, the Gorgon plant on Barrow Island shipped 170 cargoes of LNG during the last year. The plant’s fourth-quarter production averaged 363,000 barrels of oil equivalent per day while January production was at 459,000 barrels of oil equivalent per day, Chevron said.
LNG World News Staff