Oil prices are black gold for Chevron.
San Ramon-based energy giant’s first-quarter results blew past Wall Street’s expectations
SAN RAMON >> Chevron profits geysered during its first quarter, the company reported Friday, an earnings surge that was fueled by oil prices that jumped and production that blossomed.
The energy giant earned $3.64 billion on revenue of $37.76 billion during the January-throughMarch quarter. Compared with the same period a year ago, profit soared 35.6 percent and revenue rose 13 percent.
“First-quarter earnings and cash flow improved significantly from a year ago,” Chevron CEO Michael Wirth said. “We benefitted from growing production and higher prices.”
San Ramon-based Chevron’s first-quarter results topped Wall Street’s expectations. The company earned $1.90 a share, far above the predictions by analysts of $1.48 a share.
The company’s shares jumped 1.9 percent and closed at $126.62 Friday.
Upstream profit from exploration, development and production operations totaled $3.35 billion in the first quarter, a 121 percent increase, or double the profit from the year before.
Downstream profit from refineries and retail operations totaled $728 million, down 21 percent from the year-ago first quarter. Chevron’s energy plants include its big refinery in Richmond.
Chevron said its profit was bolstered by an upswing in production from liquefied natural gas projects along the western coast of Australia and energy extractions in a big area of west Texas and southwest New Mexico known as the Permian Basis.
“Oil and gas production is increasing, most notably in our Gorgon and Wheatstone LNG projects in Australia, and our shale developments in the Permian Basin where production grew 65 percent from a year ago,” Wirth said.
The company produced 2.85 million barrels
a day of oil and natural gas during the Januarythrough-March quarter, which was up 6.6 percent from the similar period a year ago.
“We started and ramped up multiple projects in the first quarter,” Patricia Yarrington, Chevron’s chief financial officer, said during a conference call with analysts to discuss the earnings results. “Gorgon and Wheatstone delivered strong and reliable production. “We have a portfolio in the Permian that is
delivering on all cylinders.”
Chevron also intends to steeply internsify its efforts to extract energy from the Permian region in a more efficient fashion.
“Our goal is to maximize the return on every Permian molecule,” Mark Nelson, Chevron’s vice presidnet for midstream strategy and policy, told analysts during the conference call.
Company executives also told analysts that the company’s profit marked its best quarter in several years.
“This is our strongest earnings result since the third quarter of 2014, when Brent prices were above $100 a barrell,” Yarrington
told the analysts. “For the current quarter, Brent prices averged $67 a barrell.” Brent North Sea crude oil values are a key benchmark for worldwide oil prices.
The same gusher in crude oil prices that have proepelled Chevron’s profits skyward may also have triggered a steep increase in costs at the gas pump for motorists, according to this news organization’s review of gasoline price trends compiled by the GasBuddy online site.
Average prices for regular grade gasoline averaged: $3.61 a gallon in the East Bay, up 19.5 percent from a year ago; $3.63 a
gallon in the South Bay, an increase of 19.4 percent from the same date in 2017; and $3.70 a gallon in the San Francisco-San Mateo-Marin region, up 18.6 percent, according to GasBuddy.
Chevron said it doesn’t see demand for oil products to slacken any time soon — an indicator that only an economic downturn might be the only event that would cool the trend in energy prices.
“We believe that oil demand will continue to grow for the foreseeable future,” Nelson said. and could influence the effectiveness of ad targeting and cost the company more money, Facebook said.
Analysts who remain optimistic about Facebook’s prospects and maintain an outperform rating for its stock echo these concerns.
“Online advertising is becoming increasingly fraught with privacy-related concerns which is attracting significant attention from legislative bodies as well as users,” Baird analysts said in a note to investors this week.