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Chevron Issues Interim Update For First Quarter 2012

Chevron Corporation (NYSE: CVX) today reported in its interim update that earnings for the first quarter 2012 are expected to be higher than fourth quarter 2011. Upstream results are projected to improve between sequential quarters, benefiting from higher crude oil prices and lower operating expenses, partly offset by lower liftings. Downstream earnings in the first quarter are also expected to be higher, reflecting improved refining and chemicals margins, lower operating expenses, and gains on asset sales. Foreign exchange losses in the first quarter are expected to be higher than fourth quarter losses, most notably in the upstream segment.

Basis for Comparison in Interim Update

The interim update contains certain industry and company operating data for the first quarter 2012. The production volumes, realizations, margins and certain other items in the report are based on a portion of the quarter and are not necessarily indicative of Chevron's full quarterly results to be reported on April 27, 2012. The reader should not place undue reliance on this data.

Readers are advised that portions of the commentary below compare results for the first two months of the first quarter 2012 to full fourth quarter 2011 results, as indicated.


The table that follows includes information on production and price indicators for crude oil and natural gas for specific markets. Actual realizations may vary from indicative pricing due to quality and location differentials and the effect of pricing lags. International earnings reflect actual liftings, which may differ from production due to the timing of cargoes and other factors.


  2011   2012
1Q   2Q   3Q   4Q  

1Q thru Feb

1Q thru Mar

U.S. Upstream
Net Production:
Liquids MBD 482 478 453 447 450 n/a

Natural Gas
MMCFD 1,270 1,299 1,260 1,290 1,170 n/a
Total Oil-Equivalent MBOED 694 694 662 661 644 n/a
Avg. WTI Spot Price $/Bbl 94.48 102.34 89.51 93.98 101.24 103.00
Avg. Midway Sunset Posted Price $/Bbl 94.46 108.67 102.99 107.83 109.14 112.01
Nat. Gas-Henry Hub "Bid Week" Avg. $/MCF 4.10 4.32 4.20 3.55 2.88 2.73
Nat. Gas-CA Border "Bid Week" Avg. $/MCF 4.03 4.24 4.32 3.74 3.13 2.96
Nat. Gas-Rocky Mountain "Bid Week" Avg. $/MCF 3.71 3.88 3.81 3.35 2.70 2.56
Average Realizations:
Crude $/Bbl 93.39 108.80 101.27 105.37 105.65 n/a
Liquids $/Bbl 89.14 103.63 96.75 100.65 99.71 n/a
Natural Gas $/MCF 4.04 4.35 4.14 3.62 2.70 n/a

International Upstream
Net Production:
Liquids MBD 1,428 1,388 1,353 1,369 1,339 n/a
Natural Gas MMCFD 3,826 3,670 3,496 3,658 3,850 n/a
Total Oil Equivalent MBOED 2,066 2,000 1,937 1,980 1,981 n/a
Avg. Brent Spot Price 1 $/Bbl 105.43 117.04 113.41 109.35 115.07 118.60
Average Realizations:
Liquids $/Bbl 95.21 106.84 102.82 101.33 107.64 n/a
Natural Gas   $/MCF   5.03   5.49   5.50   5.55   5.82   n/a

1 The Avg. Brent Spot Price is based on Platts daily assessments, using Chevron’s internal formula to produce a quarterly average.

U.S. net oil-equivalent production decreased 17,000 barrels per day during the first two months of the first quarter, reflecting the previously announced sale of Cook Inlet, Alaska assets at year-end 2011. International net oil-equivalent production during the first two months of the first quarter was comparable with fourth quarter 2011 results. As previously announced, production at the Frade field in Brazil was shut-in mid March, with the reservoir now under technical review. The impact to first quarter production is expected to be approximately 5,000 barrels per day. Ongoing, the impact is estimated to be 33,000 barrels per day that Frade remains shut-in. At this time, a production restart date is not available. However, the company’s 2012 production guidance remains unchanged.

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