EX-99.1 2 f56330exv99w1.htm EX-99.1 exv99w1
Exhibit 99.1
     
(CHEVRON LOGO)
  Chevron Corporation
Policy, Government and Public Affairs
Post Office Box 6078
San Ramon, CA 94583-0778
www.chevron.com
(NEWS RELEASE LOGO)
EXHIBIT 99.1
FOR IMMEDIATE RELEASE
CHEVRON ISSUES INTERIM UPDATE FOR SECOND QUARTER 2010
     SAN RAMON, Calif., July 12, 2010 — Chevron Corporation (NYSE:CVX) today reported in its interim update that earnings for the second quarter 2010 are expected to be higher than in the first quarter. Upstream earnings are projected to be in line with first quarter results. Downstream results, inclusive of the former Chemicals business segment, are expected to be significantly higher than the first quarter. Additionally, earnings are expected to benefit from favorable non-cash foreign currency effects due to the strengthening of the U.S. dollar in the second quarter.
     Basis for Comparison in Interim Update
     The interim update contains certain industry and company operating data for the second quarter 2010. 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 quarterly results to be reported on July 30, 2010. The reader should not place undue reliance on this data.
     Unless noted otherwise, all commentary is based on two months of the second quarter 2010 versus full first quarter 2010 results.
UPSTREAM
     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 are driven by actual liftings, which may differ from production due to the timing of cargoes and other factors.
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        2009   2010
        2Q   3Q   4Q   1Q   2Q thru
May		   2Q thru
Jun
U.S. Upstream
                                                    
Net Production:
                                                    
Liquids
   MBD     467       509       518       505       493       n/a  
Natural Gas
   MMCFD     1,395       1,420       1,402       1,378       1,329       n/a  
Total Oil-Equivalent
   MBOED     700       745       751       734       714       n/a  
 
                                                    
Pricing:
                                                    
Avg. WTI Spot Price
   $/Bbl     59.71       68.14       76.03       78.85       79.29       77.91  
Avg. Midway Sunset Posted Price
   $/Bbl     52.69       60.06       68.17       71.57       71.00       70.07  
Nat. Gas-Henry Hub “Bid Week” Avg.
   $/MCF     3.49       3.40       4.16       5.30       4.06       4.09  
Nat. Gas-CA Border “Bid Week” Avg.
   $/MCF     3.00       3.10       4.28       5.46       4.09       4.05  
Nat. Gas-Rocky Mountain “Bid Week” Avg.
   $/MCF     2.25       2.57       3.83       5.03       3.56       3.53  
 
                                                    
Average Realizations:
                                                    
Crude
   $/Bbl     53.21       63.28       70.28       73.32       75.17       n/a  
Liquids
   $/Bbl     50.42       60.20       67.42       70.53       71.71       n/a  
Natural Gas
   $/MCF     3.27       3.28       4.23       5.29       3.96       n/a  
 
                                                    
International Upstream
                                                    
Net Production:
                                                    
Liquids
   MBD     1,346       1,350       1,393       1,405       1,413       n/a  
Natural Gas
   MMCFD     3,593       3,475       3,652       3,723       3,640       n/a  
Synthetic Oil
   MBD     26       27       25       23       11       n/a  
Total Oil Equivalent — incl. Synthetic Oil
   MBOED     1,970       1,957       2,027       2,049       2,030       n/a  
 
                                                    
Pricing:
                                                    
Avg. Brent Spot Price 1
   $/Bbl     59.13       68.15       74.53       76.36       80.15       78.24  
 
                                                    
Average Realizations:
                                                    
Liquids
   $/Bbl     53.17       61.90       68.42       70.05       73.24       n/a  
Natural Gas
   $/MCF     3.73       3.92       4.15       4.61       4.45       n/a  
 
1   The Avg. Brent Spot Price is based on Platts daily assessments, using Chevron’s internal formula to produce a quarterly average.
     Total U.S. net oil-equivalent production during the first two months of the second quarter decreased 20,000 barrels per day compared to the first quarter average, reflecting small declines across multiple assets. International net oil-equivalent production decreased 19,000 barrels per day, driven by planned maintenance in Kazakhstan and Canada, partly offset by continued production ramp up in Brazil.
     U.S. crude oil realizations increased $1.85 per barrel to $75.17 during the first two months of the second quarter. International liquids realizations increased $3.19 per barrel to $73.24. U.S. natural gas realizations decreased $1.33 to $3.96 per thousand cubic feet compared to the first quarter. International natural gas realizations declined slightly to $4.45 per thousand cubic feet.
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DOWNSTREAM
     The table that follows includes industry benchmark indicators for refining, marketing and chemicals margins. Actual margins realized by the company will differ due to crude and product mix effects, planned and unplanned shutdown activity and other company-specific and operational factors.
                                                     
        2009   2010
                                        2Q thru   2Q thru  
        2Q   3Q   4Q   1Q   May   Jun
Downstream
                                                    
 
                                                    
Market Indicators:
   $/Bbl                                                
 
Refining Margins
                                                    
U.S. West Coast — Blended 5-3-1-1
         15.18       16.13       11.83       13.04       14.99       16.30  
U.S. Gulf Coast — Maya 5-3-1-1
         13.46       12.54       11.56       16.82       22.08       21.65  
Singapore — Dubai 3-1-1-1
         4.08       4.54       2.46       6.38       4.80       4.97  
N.W. Europe — Brent 3-1-1-1
         4.36       4.23       3.59       5.07       5.41       5.41  
 
                                                    
Marketing Margins
                                                    
U.S. West — Weighted DTW to Spot
         3.61       8.96       7.71       6.87       6.64       6.12  
U.S. East — Houston Mogas Rack to Spot
         2.91       3.47       3.18       3.18       3.86       3.84  
Asia-Pacific / Middle East / Africa
         4.26       4.04       4.37       5.29       5.64       n/a  
 
                                                    
Actual Volumes:
                                                    
U.S. Refinery Input
   MBD     923       879       856       889       917       n/a  
Int’l Refinery Input
   MBD     970       985       975       992       918       n/a  
U.S. Branded Mogas Sales
   MBD     639       623       595       581       606       n/a  
 
                                                    
Chemicals (Source: CMAI )
   Cents/lb                                                
Ethylene Industry Cash Margin
         6.89       8.45       7.96       17.97       23.95       19.18  
HDPE Industry Contract Sales Margin
         24.61       27.65       22.35       17.22       22.97       24.30  
Styrene Industry Contract Sales Margin
         13.86       11.52       11.10       10.29       12.33       11.97  
Note: Prices, economics, and views expressed by CMAI are strictly the opinion of CMAI and Purvin & Gertz and are based on information collected within the public domain and on assessments by CMAI and Purvin & Gertz staff utilizing reasonable care consistent with normal industry practice. CMAI and Purvin & Gertz make no guarantee or warranty and assume no liability as to their use.
     For the full second quarter, U.S. refining indicator margins improved from the first quarter, while international refining and worldwide marketing indicator margins were mixed. Chemical indicator margins improved between periods.
     During the first two months of the second quarter, daily U.S. refinery crude-input volumes increased 28,000 barrels per day following planned maintenance. Outside the United States, refinery crude-input volumes were down 74,000 barrels per day, largely due to planned maintenance at the Cape Town refinery in South Africa.
     Downstream earnings in the second quarter are expected to benefit from stronger U.S. refining margins, favorable foreign currency impacts and timing effects due to declining commodity prices between the beginning and end of the quarter. First quarter downstream results included a severance charge of $150 million associated with employee reductions.
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ALL OTHER
     The company’s general guidance for the quarterly net after-tax charges related to corporate and other activities is between $250 million and $350 million. Due to foreign currency effects and the potential for irregularly occurring accruals related to income taxes, pension settlements and other matters, actual results may significantly differ from the guidance range. Total net charges in the second quarter are expected to be lower than the guidance range.
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NOTICE
Chevron’s discussion of second quarter 2010 earnings with security analysts will take place on Friday, July 30, 2010, at 8:00 a.m. PDT. A webcast of the meeting will be available in a listen-only mode to individual investors, media, and other interested parties on Chevron’s website at www.chevron.com under the “Investors” section. Additional financial and operating information will be contained in the Earnings Supplement that will be available under “Events & Presentations” in the “Investors” section on the website.
CAUTIONARY STATEMENT RELEVANT TO FORWARD-LOOKING INFORMATION
FOR THE PURPOSE OF “SAFE HARBOR’’ PROVISIONS OF THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
This interim update of Chevron Corporation contains forward-looking statements relating to Chevron’s operations that are based on management’s current expectations, estimates and projections about the petroleum, chemicals and other energy-related industries. Words such as “anticipates,” “expects,” “intends,” “plans,” “targets,” “projects,” “believes,” “seeks,” “schedules,” “estimates,” “budgets” and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and other factors, some of which are beyond the company’s control and are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements. The reader should not place undue reliance on these forward-looking statements, which speak only as of the date of this interim update. Unless legally required, Chevron undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
Among the important factors that could cause actual results to differ materially from those in the forward-looking statements are: changing crude-oil and natural-gas prices; changing refining, marketing and chemical margins; actions of competitors or regulators; timing of exploration expenses; timing of crude-oil liftings; the competitiveness of alternate-energy sources or product substitutes; technological developments; the results of operations and financial condition of equity affiliates; the inability or failure of the company’s joint-venture partners to fund their share of operations and development activities; the potential failure to achieve expected net production from existing and future crude-oil and natural-gas development projects; potential delays in the development, construction or start-up of planned projects; the potential disruption or interruption of the company’s net production or manufacturing facilities or delivery/transportation networks due to war, accidents, political events, civil unrest, severe weather or crude-oil production quotas that might be imposed by the Organization of Petroleum Exporting Countries; the potential liability for remedial actions or assessments under existing or future environmental regulations and litigation; significant investment or product changes under existing or future environmental statutes, regulations and litigation; the potential liability resulting from other pending or future litigation; the company’s future acquisition or disposition of assets and gains and losses from asset dispositions or impairments; government-mandated sales, divestitures, recapitalizations, industry-specific taxes, changes in fiscal terms or restrictions on scope of company operations; foreign-currency movements compared with the U.S. dollar; the effects of changed accounting rules under generally accepted accounting principles promulgated by rule-setting bodies; and the factors set forth under the heading “Risk Factors” on pages 30 through 32 of the company’s 2009 Annual Report on Form 10-K. In addition, such statements could be affected by general domestic and international economic and political conditions. Unpredictable or unknown factors not discussed in this interim update could also have material adverse effects on forward-looking statements.