SAN RAMON, Calif.--(BUSINESS WIRE)--May. 1, 2009-- Chevron Corporation (NYSE:CVX) today reported earnings of $1.84 billion ($0.92 per share – diluted) for the first quarter 2009, compared with $5.17 billion ($2.48 per share – diluted) in the 2008 first quarter. Earnings in the 2009 period included gains of approximately $400 million ($0.20 per share) on downstream asset sales.

Sales and other operating revenues in the first quarter 2009 were $35 billion, down from $65 billion in the year-ago period due mainly to lower prices for refined products and crude oil.

“Operationally, we had an excellent quarter,” said Chairman and CEO Dave O’Reilly, “with oil production and refinery inputs both higher than a year ago and operating expenses lower. However, upstream earnings declined sharply on lower prices for crude oil and natural gas. Downstream profits improved mainly on gains from asset sales, while margins on the sale of refined products recovered only slightly from a depressed level in last year’s first quarter.”

O’Reilly said production increases in the first quarter included volumes from start-up of deepwater projects last year at Agbami in Nigeria and Blind Faith in the United States and from expansion activities completed last year at Tengiz in Kazakhstan.

Deepwater production start-ups in 2009 are scheduled at 58 percent-owned Tahiti in the U.S. Gulf of Mexico, 31 percent-owned Tombua-Landana in Angola and 52 percent-owned Frade in Brazil. Total maximum oil-equivalent production is estimated at 135,000 barrels per day from Tahiti by the end of 2009, while Tombua-Landana and Frade are expected to reach maximums of 100,000 barrels per day and 90,000 barrels per day, respectively, in 2011.

O’Reilly said operational successes in the first quarter of this year also included a deepwater oil discovery in the U.S. Gulf of Mexico at the 55 percent-owned Buckskin prospect and completion of an exploration and appraisal program for the Wheatstone and Iago fields offshore northwest Australia. Chevron has a 100 percent interest in Wheatstone and a two-thirds interest in Iago. Resources from Wheatstone and Iago are expected to support the construction of a two-train LNG plant and domestic natural-gas plant.

UPSTREAM – EXPLORATION AND PRODUCTION

Worldwide oil-equivalent production was 2.66 million barrels per day in the first quarter 2009, up 64,000 barrels per day from the corresponding 2008 period. The increase was driven by the effect of production start-ups during 2008 and the impact of lower prices on cost-recovery and variable-royalty volumes in certain production contracts outside the United States. Production quotas imposed by OPEC curtailed company production by about 50,000 barrels per day. At the end of the period, approximately 35,000 barrels per day of production remained offline in the Gulf of Mexico due to damage caused by hurricanes last September, with restoration of the volumes to occur as repairs to third-party pipelines and producing facilities are completed.

U.S. upstream earnings of $21 million in the first quarter of 2009 were down $1.6 billion from the year-ago period on sharply lower prices for crude oil and natural gas and a decline in natural-gas production. The 2009 quarter also included about $100 million of write-offs associated with exploration activities.

The company’s average sales price per barrel of crude oil and natural gas liquids was $36 in the 2009 quarter, down $51 from a year earlier. The average price of natural gas of $4.14 per thousand cubic feet in 2009 was $3.41 lower.

Net oil-equivalent production of 671,000 barrels per day in the 2009 period was down 44,000. The lower volumes were mainly due to production shut in as a result of last year’s hurricanes and normal field declines. Partially offsetting these effects was an increase of 35,000 barrels per day between periods that was associated with the late-2008 start-up of the Blind Faith project in the Gulf of Mexico. The net liquids component of production was up about 1 percent to 441,000 barrels per day between periods. Net natural gas production of 1.38 billion cubic feet per day in the 2009 quarter declined 17 percent, with nearly half the decline associated with the hurricane effects.

International upstream earnings of $1.2 billion decreased $2.3 billion from the first quarter 2008 due mainly to lower prices for crude oil. A benefit between periods from higher sales volumes in various regions was largely offset by higher depreciation expenses. Foreign-exchange effects increased income by $33 million in the 2009 period but reduced earnings $167 million a year earlier.

The average sales price for crude oil and natural gas liquids in the 2009 quarter declined about $47 per barrel to $39. The price of natural gas decreased 62 cents to $4.21 per thousand cubic feet.

Net oil-equivalent production of 1.99 million barrels per day in the 2009 first quarter was 108,000 higher than a year ago. The increase included about 150,000 barrels per day of production associated with the mid-2008 start-up at Agbami in Nigeria and the expansion project at Tengiz in Kazakhstan. The impact of lower prices on cost-recovery volumes and other contractual provisions affecting Chevron’s share of production resulted in a net increase of about 50,000 barrels per day between periods. These effects were partially offset by OPEC-related curtailments of about 50,000 barrels per day and lower natural gas production in Thailand. The net liquids component of production increased about 10 percent from a year ago to 1.38 million barrels per day, while net natural gas production declined about 3 percent to 3.64 billion cubic feet per day.

DOWNSTREAM – REFINING, MARKETING AND TRANSPORTATION

U.S. downstream earnings of $133 million in the first quarter 2009 increased $129 million on a slight improvement in refined-product margins from the depressed level a year ago.

Refinery crude-input of 938,000 barrels per day was up 44,000 from the first quarter 2008. Refined-product sales volumes were 1.40 million barrels per day in the first quarter 2009, down 2 percent from the year-ago period. Branded gasoline sales were up 2 percent between quarters to 613,000 barrels per day.

International downstream earnings of $690 million increased $442 million from the first quarter 2008. The 2009 quarter included gains of $400 million associated mainly with sales of marketing businesses in Nigeria and Brazil. Margins on the sale of refined products were slightly higher between periods, and operating and selling expenses declined. Foreign currency effects reduced earnings in the 2009 quarter by $65 million but benefited income $111 million a year earlier.

Refinery crude-input of 985,000 barrels per day was about 2 percent higher than the first quarter of 2008. Total refined-product sales volumes of 1.96 million barrels per day declined 5 percent from last year’s first quarter on lower sales of fuel oil, gas oil and gasoline.

CHEMICALS

Chemical operations earned $39 million in the first quarter 2009, a decline of $4 million from a year earlier. The 2008 period included a charge of approximately $40 million for environmental remediation costs at a closed manufacturing facility. Between quarters, margins were lower on the sale of lubricant and fuel additives for Chevron’s Oronite subsidiary and on sales of commodity chemicals by the 50 percent-owned Chevron Phillips Chemical Company LLC.

ALL OTHER

All Other consists of mining operations, power generation businesses, worldwide cash management and debt financing activities, corporate administrative functions, insurance operations, real estate activities, alternative fuels and technology companies.

Net charges in the first quarter 2009 were $294 million, compared with $255 million in last year’s first quarter. Foreign currency effects increased net charges by $29 million in 2009, compared with a benefit of $12 million in the year-ago period. Changes in other corporate items were essentially offsetting.

CAPITAL AND EXPLORATORY EXPENDITURES

Capital and exploratory expenditures in the first quarter 2009 were $6.5 billion, compared with $5.1 billion in the corresponding 2008 period. These amounts included approximately $300 million and $500 million, respectively, for the company’s share of expenditures by affiliates, which did not require cash outlays by Chevron’s consolidated companies. Outlays in the 2009 quarter included $2 billion for an upstream concession extension. Expenditures for upstream projects in the first quarter 2009 represented 85 percent of the companywide total.

NOTICE

Chevron’s discussion of first quarter 2009 earnings with security analysts will take place on Friday, May 1, 2009, 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 Web site at www.chevron.com under the “Investors” section. Additional financial and operating information will be contained in the Investor Relations Earnings Supplement that will be available under “Events and Presentations” in the “Investors” section on the Web site.

Chevron will post selected second quarter 2009 interim performance data for the company and industry on its Web site on Thursday, July 9, 2009, at 2:00 p.m. PDT. Interested parties may view this interim data at www.chevron.com under the “Investors” section.

CAUTIONARY STATEMENT RELEVANT TO FORWARD-LOOKING INFORMATION
FOR THE PURPOSE OF “SAFE HARBOR” PROVISIONS OF THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

This press release 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 press release. 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 crude-oil and natural-gas prices; refining, marketing and chemicals 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 OPEC (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 pending or future litigation; the company’s acquisition or disposition of assets; 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 and 31 of the company’s 2008 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 report could also have material adverse effects on forward-looking statements.

Source: Chevron Corporation

Chevron Corporation
Lloyd Avram, 925-842-3422
avrl@chevron.com