-- Upstream earnings of $4.8 billion increase $1.9 billion, due
mainly to higher prices for crude oil
-- Downstream profits of $204 million decline $750 million on
narrowed margins for refined products
SAN RAMON, Calif.--(BUSINESS WIRE)--Feb. 1, 2008--Chevron Corporation (NYSE:CVX) today reported net income of $4.9 billion ($2.32 per share - diluted) for the fourth quarter 2007, compared with $3.8 billion ($1.74 per share - diluted) in the year-ago period. For the full year 2007, net income was $18.7 billion ($8.77 per share - diluted), up 9 percent from $17.1 billion ($7.80 per share - diluted) in 2006.
Earnings Summary
Fourth Quarter Year
---------------------------------
Millions of dollars 2007 2006 2007 2006
----------------------------------------------------------------------
Income by Business Segment
Upstream - Exploration and
Production $4,839 $2,909 $14,816 $13,142
Downstream - Refining, Marketing
and Transportation 204 954 3,502 3,973
Chemicals 69 124 396 539
All Other (237) (215) (26) (516)
----------------------------------------------------------------------
Net Income(a) $4,875 $3,772 $18,688 $17,138
----------------------------------------------------------------------
(a)Includes foreign currency effects $(2) $56 $(352) $(219)
"Fourth quarter earnings for our upstream business benefited from a significant increase in the price of crude oil," said Chairman and CEO Dave O'Reilly. "However, downstream profits were off sharply because of planned and unplanned refinery downtime in the United States, as well as the impact of higher crude-oil costs that were not fully recovered in the sales price of refined products.
"Our results overall capped a successful year for our company," O'Reilly added. "We achieved record earnings in 2007 and invested a record $20 billion in our excellent queue of capital and exploratory projects. Our financial strength also enabled us to increase the common stock dividend payment for the 20th consecutive year and buy back $7 billion of our common shares."
In the fourth quarter, O'Reilly indicated significant progress was made on strategic milestones that are important to the company's future success:
Upstream
-- Angola -- Made the final investment decision with partners to
construct a liquefied natural gas (LNG) plant, to be owned 36
percent by Chevron. It will be designed with a capacity to
process one billion cubic feet of natural gas per day and
produce 5.2 million metric tons a year of LNG and related
products.
-- China -- Signed a 30-year production-sharing contract with
China National Petroleum Corporation to assume operatorship
and hold a 49 percent interest in the development of the
Chuandongbei natural gas area in central China.
-- Kazakhstan -- Initiated production from the first phase of the
expansion projects at the 50 percent-owned Tengiz Field, which
increased production capacity by 90,000 barrels of crude oil
per day to approximately 400,000.
-- Thailand -- Signed an agreement to increase daily sales of
natural gas by 500 million cubic feet to 1.2 billion by 2012
from company-operated offshore Blocks 10 through 13, for which
10-year lease extensions had earlier been received and in
which Chevron has ownership interests ranging from 60 percent
to 80 percent.
Downstream
-- South Korea -- Commissioned new facilities associated with a
$1.5 billion upgrade of the 50 percent-owned GS Caltex Yeosu
Refinery, enabling the refinery to process heavier and
higher-sulfur crude oils and increase the production of
gasoline, diesel and other light products.
-- United States -- Completed the second phase of modifications
at the refinery in El Segundo, California, also enabling the
processing of heavier crude oils into light transportation
fuels and other refined products.
UPSTREAM -- EXPLORATION AND PRODUCTION
Worldwide oil-equivalent production was 2.61 million barrels per day in the fourth quarter 2007, down 42,000 barrels per day from the corresponding 2006 period. Approximately 25,000 barrels per day of the decline was associated with the impact of higher prices on cost-recovery and variable-royalty volumes under provisions of certain production contracts outside the United States.
U.S. Upstream
Fourth Quarter Year
----------------------------
Millions of dollars 2007 2006 2007 2006
----------------------------------------------------------------------
Income $1,378 $886 $4,532 $4,270
----------------------------------------------------------------------
U.S. upstream income of $1.38 billion in the fourth quarter increased $492 million from the 2006 period, due mainly to an increase in the price of crude oil. This benefit to income was partially offset by a decline in oil-equivalent production and an increase in operating, exploration and depreciation expenses.
The average sales price per barrel of crude oil and natural gas liquids was approximately $79 in the fourth quarter 2007, an increase of about $28 from the corresponding 2006 period. The average sales price of natural gas increased about 18 cents per thousand cubic feet to $6.08.
Net oil-equivalent production of 730,000 barrels per day declined 4 percent from the 2006 quarter. Net liquids production of 451,000 barrels per day was about 3 percent lower. Net natural gas production was down 6 percent to approximately 1.68 billion cubic feet per day, due mainly to normal field declines.
International Upstream
Fourth Quarter Year
--------------------------------
Millions of dollars 2007 2006 2007 2006
----------------------------------------------------------------------
Income(a) $3,461 $2,023 $10,284 $8,872
----------------------------------------------------------------------
(a)Includes foreign currency effects $(88) $(52) $(417) $(371)
International upstream earnings of $3.46 billion increased $1.44 billion from the fourth quarter 2006, due mainly to higher prices for crude oil. Partially offsetting this benefit to income were lower crude oil sales volumes due to the timing of certain cargo liftings and higher operating expenses. Results for the 2007 quarter also included approximately $150 million of favorable tax items, including the effect of a tax-law change in Canada reducing the corporate income tax rate.
The average sales price for crude oil and natural gas liquids in the 2007 quarter increased $29 per barrel from a year earlier to about $80, while the average price of natural gas was up 65 cents to $4.32 per thousand cubic feet.
Net oil-equivalent production of 1.88 million barrels per day in the 2007 fourth quarter was essentially flat from a year earlier. Increased output in Bangladesh, Trinidad and Tobago, and Thailand was offset by lower production in Canada, Nigeria and Indonesia. The net liquids component of production, including volumes produced from oil sands in Canada, declined about 5 percent to 1.32 million barrels per day, while net natural gas production increased 11 percent to 3.41 billion cubic feet per day.
DOWNSTREAM -- REFINING, MARKETING AND TRANSPORTATION
U.S. Downstream
Fourth Quarter Year
----------------------------
Millions of dollars 2007 2006 2007 2006
----------------------------------------------------------------------
(Loss) Income $(55) $343 $966 $1,938
----------------------------------------------------------------------
U.S. downstream incurred a loss of $55 million in the fourth quarter 2007, compared with income of $343 million a year earlier. The swing from profit to a loss was mainly the result of market conditions that prevented the full recovery of higher crude-oil costs in the price of refined products, the adverse effects of refinery downtime and higher operating expenses. The 2007 quarter included a gain on the sale of the company's credit card operations.
Refined-product sales volumes were 1.42 million barrels per day in the fourth quarter 2007, down 3 percent from a year earlier. Branded gasoline sales volumes were relatively flat between quarters at 620,000 barrels per day.
Refinery crude input was down 78,000 barrels per day, primarily due to the ongoing effects of an August 2007 fire at the refinery in Pascagoula, Mississippi. The crude unit is expected to be back in service late in the first quarter 2008, as planned. Despite this outage, the company has been able to maintain uninterrupted product supplies to customers through the use of other feedstocks in its gasoline-producing facilities at the refinery.
International Downstream
Fourth Quarter Year
----------------------------
Millions of dollars 2007 2006 2007 2006
----------------------------------------------------------------------
Income(a) $259 $611 $2,536 $2,035
----------------------------------------------------------------------
(a)Includes foreign currency effects $87 $96 $62 $98
International downstream earned $259 million in the 2007 quarter, a decrease of about $350 million from the year-ago period due mainly to lower margins on the sale of refined products and higher operating expenses.
Total refined-product sales volumes of 2.05 million barrels per day were 2 percent lower than last year's quarter, reflecting the impact of asset sales between periods.
Refinery crude input was up 40,000 barrels per day, primarily due to the effect of major planned maintenance that occurred during the 2006 fourth quarter at the Pembroke Refinery in the United Kingdom. Crude inputs also increased at the 50 percent-owned refinery in Yeosu, South Korea, following a major expansion and upgrading project. Partly offsetting these higher inputs was the impact of a sale of the company's interest in a Netherlands refinery in the first quarter 2007.
CHEMICALS
Fourth Quarter Year
----------------------------
Millions of dollars 2007 2006 2007 2006
----------------------------------------------------------------------
Income(a) $69 $124 $396 $539
----------------------------------------------------------------------
(a)Includes foreign currency effects $(5) $(1) $(3) $(8)
Chemical operations earned $69 million in the 2007 fourth quarter, compared with $124 million a year ago. Margins were lower on sales of commodity chemicals by the 50 percent-owned Chevron Phillips Chemical Company LLC and on sales of lubricant and fuel additives by the company's Oronite subsidiary.
ALL OTHER
Fourth Quarter Year
----------------------------
Millions of dollars 2007 2006 2007 2006
----------------------------------------------------------------------
Net Charges(a) $(237) $(215) $(26) $(516)
----------------------------------------------------------------------
(a)Includes foreign currency effects $4 $13 $6 $62
All Other includes 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, and the company's interest in Dynegy prior to its sale in May 2007.
Net charges in the fourth quarter 2007 were $237 million, up $22 million from the corresponding period in 2006. The benefit of favorable tax items in the 2007 quarter was more than offset by an increase in charges for litigation matters and other corporate expenses.
SALES AND OTHER OPERATING REVENUES
Sales and other operating revenues in the fourth quarter 2007 were $60 billion, up approximately $14 billion from a year earlier. For the full year 2007, sales and other operating revenues of $214 billion were up from $205 billion in the year-ago period.
CAPITAL AND EXPLORATORY EXPENDITURES
Capital and exploratory expenditures for the year 2007 were $20 billion, compared with $16.6 billion in the corresponding 2006 period. The amounts included approximately $2.3 billion and $1.9 billion, respectively, for the company's share of expenditures by affiliates, which did not require cash outlays by Chevron's consolidated companies. Expenditures for upstream projects represented about 78 percent of the companywide total in 2007.
NOTICE
Chevron's discussion of fourth quarter 2007 earnings with security analysts will take place on Friday, February 1, 2008, at 8:00 a.m. PST. 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" heading. Additional financial and operating information is contained in the Investor Relations Earnings Supplement that is available under "Events and Presentations."
Chevron will issue a press release containing selected first quarter 2008 interim company and industry performance data and post the same information on its Web site on Wednesday, April 9, 2008, at 2:00 p.m. PDT. Interested parties may view this interim data at www.chevron.com under the "Investors" heading.
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 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 our 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 margins and marketing margins;
chemicals prices and margins; actions of competitors; timing of
exploration expenses; 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 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, 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 31 and 32 of the
company's 2006 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 press release could also have material adverse
effects on forward-looking statements.
CHEVRON CORPORATION - FINANCIAL REVIEW -1-
(Millions of Dollars, Except Per-Share Amounts)
CONSOLIDATED STATEMENT
OF INCOME
----------------------
(unaudited) Three Months Year Ended
Ended December 31 December 31
---------------------- ----------------------
REVENUES AND OTHER
INCOME 2007 2006 2007 2006
---------- ---------- ---------- ----------
Sales and other
operating revenues
(1) (2) $ 59,900 $ 46,238 $ 214,091 $ 204,892
Income from equity
affiliates 1,153 1,079 4,144 4,255
Other income 357 429 2,669 971
---------- ---------- ---------- ----------
Total Revenues and
Other Income 61,410 47,746 220,904 210,118
---------- ---------- ---------- ----------
COSTS AND OTHER
DEDUCTIONS
Purchased crude oil
and products,
operating and other
expenses (2) 45,136 33,500 157,490 149,232
Depreciation,
depletion and
amortization 2,094 1,988 8,708 7,506
Taxes other than on
income (1) 5,560 5,533 22,266 20,883
Interest and debt
expense 7 92 166 451
Minority interests 35 2 107 70
---------- ---------- ---------- ----------
Total Costs and
Other Deductions 52,832 41,115 188,737 178,142
---------- ---------- ---------- ----------
Income Before Income
Tax Expense 8,578 6,631 32,167 31,976
Income tax expense 3,703 2,859 13,479 14,838
---------- ---------- ---------- ----------
NET INCOME $ 4,875 $ 3,772 $ 18,688 $ 17,138
========== ========== ========== ==========
PER-SHARE OF COMMON
STOCK
Net Income - Basic $ 2.34 $ 1.75 $ 8.83 $ 7.84
- Diluted $ 2.32 $ 1.74 $ 8.77 $ 7.80
Dividends $ 0.58 $ 0.52 $ 2.26 $ 2.01
Weighted Average
Number of Shares
Outstanding (000's)
- Basic 2,088,359 2,156,781 2,117,567 2,186,161
- Diluted 2,103,559 2,168,852 2,131,635 2,196,924
(1) Includes excise,
value-added and
similar taxes. $ 2,548 $ 2,498 $ 10,121 $ 9,551
(2) Includes amounts
in revenues for
buy/sell contracts;
associated costs are
in "Purchased crude
oil and products,
operating and other
expenses." $ - $ - $ - $ 6,725
CHEVRON CORPORATION - FINANCIAL REVIEW -2-
(Millions of Dollars)
INCOME (LOSS) BY MAJOR
OPERATING AREA
----------------------------
(unaudited) Three Months Year Ended
Ended December 31 December 31
----------------- ---------------------
2007 2006 2007 2006
--------- ------ ----------- --------
Upstream - Exploration and
Production
United States $ 1,378 $ 886 $ 4,532 $ 4,270
International 3,461 2,023 10,284 8,872
--------- ------ ----------- --------
Total Exploration and
Production 4,839 2,909 14,816 13,142
--------- ------ ----------- --------
Downstream - Refining,
Marketing and
Transportation
United States (55) 343 966 1,938
International 259 611 2,536 2,035
--------- ------ ----------- --------
Total Refining,
Marketing and
Transportation 204 954 3,502 3,973
--------- ------ ----------- --------
Chemicals 69 124 396 539
All Other (1) (237) (215) (26) (516)
--------- ------ ----------- --------
Net Income $ 4,875 $3,772 $ 18,688 $ 17,138
========= ====== =========== ========
SELECTED BALANCE SHEET Dec. 31, Dec. 31,
ACCOUNT DATA 2007 2006
---------------------------- ------------ ---------
(unaudited)
Cash and Cash Equivalents $ 6,860 $ 10,493
Marketable Securities $ 732 $ 953
Total Assets $ 147,942 $132,628
Total Debt $ 7,232 $ 9,838
Stockholders' Equity $ 77,088 $ 68,935
Total Debt/Total Debt plus
Equity 8.6% 12.5%
Return on Average Capital
Employed - Year Ended 23% 23%
Common Stock Acquired Under
Stock-Buyback Programs
Year Ended December 31 $ 7,000 $ 5,000
Three Months Ended
December 31 $ 2,000 $ 1,300
CAPITAL AND EXPLORATORY Three Months Year Ended
EXPENDITURES (2) Ended December 31 December 31
----------------- ---------------------
2007 2006 2007 2006
--------- ------ ----------- --------
United States
Exploration and Production $ 1,359 $1,116 $ 4,558 $ 4,123
Refining, Marketing and
Transportation 626 453 1,576 1,176
Chemicals 99 60 218 146
All Other (1) 209 136 768 403
--------- ------ ----------- --------
Total United States 2,293 1,765 7,120 5,848
--------- ------ ----------- --------
International
Exploration and Production 3,295 2,733 10,980 8,696
Refining, Marketing and
Transportation 635 597 1,867 1,999
Chemicals 18 22 53 54
All Other (1) 2 7 6 14
--------- ------ ----------- --------
Total International 3,950 3,359 12,906 10,763
--------- ------ ----------- --------
Worldwide $ 6,243 $5,124 $ 20,026 $ 16,611
========= ====== =========== ========
(1) Includes the company's
interest in Dynegy prior to
its sale in May 2007,
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.
(2) Includes interest in
affiliates:
United States $ 100 $ 73 $ 220 $ 206
International 577 585 2,116 1,713
--------- ------ ----------- --------
Total $ 677 $ 658 $ 2,336 $ 1,919
========= ====== =========== ========
CHEVRON CORPORATION - FINANCIAL REVIEW -3-
Three Months Year Ended
OPERATING STATISTICS (1) Ended December 31 December 31
-------------------------------------- ----------------- -------------
NET LIQUIDS PRODUCTION (MB/D): 2007 2006 2007 2006
-------- -------- ------ ------
United States 451 466 460 462
International 1,297 1,346 1,296 1,270
-------- -------- ------ ------
Worldwide 1,748 1,812 1,756 1,732
======== ======== ====== ======
NET NATURAL GAS PRODUCTION (MMCF/D):
(2)
United States 1,675 1,782 1,699 1,810
International 3,408 3,067 3,320 3,146
-------- -------- ------ ------
Worldwide 5,083 4,849 5,019 4,956
======== ======== ====== ======
OTHER PRODUCED VOLUMES-INTERNATIONAL
(MB/D) (3) 18 35 27 109
======== ======== ====== ======
TOTAL NET OIL-EQUIVALENT PRODUCTION
(MB/D): (4)
United States 730 763 743 763
International 1,883 1,892 1,876 1,904
-------- -------- ------ ------
Worldwide 2,613 2,655 2,619 2,667
======== ======== ====== ======
SALES OF NATURAL GAS (MMCF/D):
United States 7,073 6,973 7,624 7,051
International 3,794 3,580 3,792 3,478
-------- -------- ------ ------
Worldwide 10,867 10,553 11,416 10,529
======== ======== ====== ======
SALES OF NATURAL GAS LIQUIDS (MB/D):
United States 177 133 160 124
International 119 109 118 102
-------- -------- ------ ------
Worldwide 296 242 278 226
======== ======== ====== ======
SALES OF REFINED PRODUCTS (MB/D): (5)
(6)
United States 1,423 1,471 1,457 1,494
International 2,052 2,093 2,027 2,127
-------- -------- ------ ------
Worldwide 3,475 3,564 3,484 3,621
======== ======== ====== ======
REFINERY INPUT (MB/D):(5)
United States 838 916 812 939
International 1,030 990 1,021 1,050
-------- -------- ------ ------
Worldwide 1,868 1,906 1,833 1,989
======== ======== ====== ======
(1) Includes interest in affiliates.
(2) Includes natural gas consumed in
operations (MMCF/D):
United States 74 67 65 56
International 468 434 433 419
(3) Other produced volumes -
International (MB/D):
Athabasca Oil Sands (Canada) 18 35 27 27
Boscan Operating Service Agreement
(Venezuela); converted to an
equity affiliate effective
October 2006. - - - 82
18 35 27 109
======== ======== ====== ======
(4) Oil-equivalent production is the
sum of net liquids production, net
gas production and other produced
liquids. The oil-equivalent gas
conversion ratio is 6,000 cubic feet
of natural gas = 1 barrel of crude
oil.
(5) 2006 conformed to 2007
presentation.
(6) Includes volumes for buy/sell
contracts (MB/D):
United States - - - 26
International - - - 24
-------- -------- ------ ------
Total - - - 50
======== ======== ====== ======
CONTACT: Chevron Corporation
Don Campbell, +1-925-842-2589
SOURCE: Chevron Corporation