SAN RAMON, Calif., Jul 30, 2010 (BUSINESS WIRE) --

Chevron Corporation (NYSE:CVX) today reported earnings of $5.41 billion ($2.70 per share - diluted) for the second quarter 2010, compared with $1.75 billion ($0.87 per share - diluted) in the 2009 second quarter. Foreign currency effects increased earnings in the 2010 quarter by $241 million, compared with a reduction of $453 million a year earlier.

For the first half of 2010, earnings were $9.96 billion ($4.97 per share - diluted), up from $3.58 billion ($1.79 per share - diluted) in the first six months of 2009.

Sales and other operating revenues in the second quarter 2010 were $51 billion, up from $40 billion in the year-ago period due mainly to higher prices for crude oil, natural gas and refined products.

"We had another very successful quarter - both operationally and financially," said Chairman and CEO John Watson. "Current quarter earnings from upstream operations benefited significantly from higher prices for crude oil and natural gas and higher net oil-equivalent production. In the downstream, improved margins for refined petroleum products contributed to increased earnings."

Watson added, "During the second quarter, we continued to make significant progress toward building a leading natural gas business to supply Australia and the Asia-Pacific region. We also progressed several new upstream opportunities in other areas." Recent upstream achievements include:

• Australia - Two deepwater natural gas discoveries in the Carnarvon Basin off the northwest coast, Clio-3 in 67 percent-owned Block WA-205-P and Sappho-1 in 50 percent-owned Block WA-392-P. These discoveries will contribute to future growth at the company-operated Gorgon and Wheatstone liquefied natural gas (LNG) projects.
• Australia - Signed nonbinding Heads of Agreement (HOA) with Korea Gas Corporation to take delivery of 1.95 million metric tons per year of LNG from the Chevron-operated Wheatstone Project and to acquire an equity share in the field licenses and LNG facilities. HOAs are now in place representing about 80 percent of the total LNG available from the foundation project. The project, currently undergoing front-end engineering and design, has a planned capacity of 8.6 million metric tons per year.
• Indonesia - Reached final investment decision for Development Area 13 of the Duri Field where Chevron holds a 100 percent working interest. The expansion project is expected to increase crude oil production by approximately 20,000 barrels per day.
• Romania - Successful bidder for three shale-gas exploration blocks, comprising approximately 675,000 acres in the southeast region of the country.
• Canada - Acquired approximately 200,000 acres of shale-gas leasehold in Western Canada. The appraisal of this acreage is expected to begin by the end of 2011.
• Venezuela - Formed consortium to work toward commercializing the Carabobo heavy oil resource.
• Russia - Signed nonbinding Heads of Agreement with Rosneft, Russia's largest oil company, for a deepwater development partnership on the Shatsky Ridge in the eastern Black Sea.

In addition, the company has terminated the three-year $15 billion share repurchase program that had been initiated in September 2007. In its place, the Board of Directors approved a new, ongoing share repurchase program with no set term or monetary limits. The company does not plan to purchase any shares in the third quarter 2010.

UPSTREAM

Worldwide net oil-equivalent production was 2.75 million barrels per day in the second quarter 2010, up 76,000 barrels per day or 3 percent from 2.67 million barrels per day in the 2009 second quarter. The increase was primarily driven by new production from major project start-ups and ramp-ups in the United States and Brazil, and expansion of capacity at Tengiz in Kazakhstan.

U.S. Upstream

U.S. upstream earnings of $1.09 billion in the second quarter of 2010 were up $810 million from a year earlier, primarily due to higher crude oil and natural gas realizations.

The company's average sales price per barrel of crude oil and natural gas liquids was approximately $71 in the 2010 quarter, compared with $50 a year ago. The average sales price of natural gas was $4.01 per thousand cubic feet, up from $3.27 in last year's second quarter.

Net oil-equivalent production of 708,000 barrels per day in the second quarter 2010 was up 8,000 barrels per day, or about 1 percent, from a year earlier. The increase in production was primarily associated with start-up of the Tahiti Field in second quarter 2009, along with the restoration of volumes that were offline in the second quarter of 2009 due to 2008 hurricanes in the Gulf of Mexico, partly offset by natural field declines. The net liquids component of production increased 4 percent in the 2010 second quarter to 488,000 barrels per day, while net natural gas production declined 6 percent to 1.32 billion cubic feet per day.

International Upstream

International upstream earnings of $3.45 billion increased $2.08 billion from the second quarter 2009 due mainly to the impact of higher prices and sales volumes for crude oil. Foreign currency effects increased earnings by $107 million in the 2010 quarter, compared with a decrease of $467 million a year earlier.

The average sales price for crude oil and natural gas liquids in the 2010 quarter was $71 per barrel, compared with $53 a year earlier. The average price of natural gas was $4.40 per thousand cubic feet, up from $3.73 in last year's second quarter.

Net oil-equivalent production of 2.04 million barrels per day in the second quarter 2010 was up 3 percent, or 68,000 barrels per day, from a year ago. The increase included approximately 72,000 barrels per day associated with ramp-up of two projects - the expansion at Tengiz in Kazakhstan and Frade in Brazil.The impact of higher prices on cost-recovery volumes and other contractual provisions decreased net production from last year's second quarter. The net liquids component of production increased 4 percent from a year ago to 1.42 million barrels per day and net natural gas production was up 3 percent to 3.70 billion cubic feet per day.

DOWNSTREAM

U.S. Downstream

U.S. downstream operations earned $433 million in the second quarter 2010, compared with a loss of $51 million a year earlier. The increase was due mainly to improved margins on refined products, a favorable change in effects on derivative instruments and higher earnings from chemicals operations - primarily from the 50 percent-owned Chevron Phillips Chemical Company LLC.

Refinery crude-input of 917,000 barrels per day in the second quarter 2010 decreased 6,000 barrels per day from the year-ago period.

Refined product sales of 1.41 million barrels per day were down 34,000 barrels per day from the second quarter of 2009, mainly due to lower jet fuel and fuel oil sales. Branded gasoline sales decreased 5 percent to 605,000 barrels per day.

International Downstream

International downstream operations earned $542 million in the second quarter 2010, compared with earnings of $182 million a year earlier. The increase was due mainly to a favorable change in effects on derivative instruments. Foreign currency effects increased earnings by $131 million in the 2010 quarter, compared with a reduction of $28 million a year earlier.

Refinery crude-input of 954,000 barrels per day decreased 16,000 barrels per day from the second quarter of 2009, mainly due to planned and unplanned downtime. Total refined product sales of 1.78 million barrels per day in the 2010 second quarter were 3 percent lower than a year earlier, due mainly to lower sales of gas oil and fuel oil. Excluding the impact of 2009 asset sales, sales volumes were down 2 percent between periods.

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 second quarter 2010 were $108 million, compared with $43 million in the year-ago period. The change between periods was mainly due to higher corporate charges. Foreign currency effects reduced net charges by $3 million in the 2010 quarter, compared with a $42 million reduction in net charges last year.

CAPITAL AND EXPLORATORY EXPENDITURES

Capital and exploratory expenditures in the first six months of 2010 were $9.4 billion, compared with $11.4 billion in the corresponding 2009 period. The amounts included $609 million in 2010 and $577 million in 2009 for the company's share of expenditures by affiliates, which did not require cash outlays by the company. Outlays in the 2009 period included $2 billion for the extension of an upstream concession. Expenditures for upstream projects represented 88 percent of the companywide total in 2010.

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 Web site 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 and Presentations" in the "Investors" section on the Web site.

Chevron will post selected third quarter 2010 interim performance data for the company and industry on its Web site on Tuesday, October 12, 2010, 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: 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 press release could also have material adverse effects on forward-looking statements.

SOURCE: Chevron Corporation

Chevron Corporation
Alex Yelland, 925-842-0456