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Chevron Issues Interim Update For Third Quarter 2012

Chevron Corporation (NYSE: CVX) today reported in its interim update that earnings for the third quarter 2012 are expected to be substantially lower than second quarter 2012. Upstream results are projected to be lower between sequential quarters, reflecting foreign exchange losses and lower liftings and realizations, partially offset by an asset sale gain. Downstream earnings in the third quarter are expected to be significantly lower than second quarter 2012, reflecting the impact of negative timing effects, lower realized margins and the negative effects of several smaller unrelated items.

Basis for Comparison in Interim Update

This interim update contains certain industry and company operating data for the third 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 November 2, 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 third quarter 2012 to full second quarter 2012 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
3Q   4Q 1Q   2Q   3Q thru Aug   3Q thru Sep

U.S. Upstream
Net Production:
Liquids MBD 453 447 456 461 442 n/a
Natural Gas MMCFD 1,260 1,290 1,170 1,186 1,185 n/a
Total Oil-Equivalent MBOED 662 661 651 659 640 n/a
Avg. WTI Spot Price $/Bbl 89.51 93.98 103.00 93.34 91.19 92.25
Avg. Midway Sunset Posted Price 1 $/Bbl 102.99 107.83 112.01 102.72 99.15 100.71
Nat. Gas-Henry Hub "Bid Week" Avg. $/MCF 4.20 3.55 2.73 2.21 2.89 2.81
Nat. Gas-CA Border "Bid Week" Avg. $/MCF 4.32 3.74 2.96 2.40 2.97 2.91
Nat. Gas-Rocky Mountain "Bid Week" Avg. $/MCF 3.81 3.35 2.56 1.88 2.53 2.46
Average Realizations:
Crude $/Bbl 101.27 105.37 108.37 103.91 95.44 n/a
Liquids $/Bbl 96.75 100.65 101.93 97.46 89.05 n/a
Natural Gas $/MCF 4.14 3.62 2.48 2.17 2.67 n/a

International Upstream
Net Production:
Liquids MBD 1,353 1,369 1,338 1,317 1,241 n/a
Natural Gas MMCFD 3,496 3,658 3,849 3,894 3,819 n/a
Total Oil Equivalent MBOED 1,937 1,980 1,980 1,965 1,878 n/a
Avg. Brent Spot Price 2 $/Bbl 113.41 109.35 118.60 108.29 107.98 109.50
Average Realizations:
Liquids $/Bbl 102.82 101.33 110.03 99.21 96.86 n/a
Natural Gas   $/MCF   5.50   5.55   5.88   6.10   5.99   n/a

1 As of second quarter 2012, Avg. Midway Sunset Posted Price is based on the average of four companies’ posted prices to better reflect realizations. Prior to second quarter 2012, the price is based only on the Chevron average posting.

2 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 19,000 barrels per day during the first two months of the third quarter, largely reflecting impacts from Hurricane Isaac. International net oil-equivalent production during the first two months of the third quarter decreased 87,000 barrels per day. Planned maintenance in Kazakhstan and the United Kingdom caused the majority of the decline. The company expects increased production in the fourth quarter 2012 compared to the third quarter 2012, reflecting the completion of planned turnarounds and restoration of shut in production in the Gulf of Mexico.

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