Page 10 - NorthAmOil Week 31

NorthAmOil PERFORMANCE NorthAmOil
Chevron’s profit up, ExxonMobil’s down in second quarter
US
CHEVRON has reported strong pro ts for the second quarter of 2019, while rival super-ma- jor ExxonMobil reported a year-on-year drop owing to low weaker natural gas prices and higher maintenance costs. It is worth noting that Chevron bene ted from the termination fee associated with its agreement to buy Ana- darko Petroleum, which the latter backed out of when Occidental Petroleum came in with a higher o er. e termination fee resulted in earnings of $740mn for Chevron in the second quarter.
Chevron’s increase
Chevron reported earnings of $4.3bn, or $2.27 per diluted share, for the second quarter of 2019, compared with $3.4bn, or $1.78 per share, in the same quarter of 2018. As well as the Anadarko merger termination fee, a non-cash tax bene t of $180mn related to a reduction in the corpo- rate income tax rate in Alberta, Canada was also included in the earnings. Foreign currency e ects increased earnings in the 2019 second quarter by $15mn, the super-major said.
Chevron’s US operations earned $896mn in the second quarter, up from $838mn a year ago. e company attributed the increase primarily to higher crude production, though it noted this was partly o set by lower oil and gas prices. Higher operating expenses – primarily related to activity in the Permian Basin – also o set some of the gains from the US.
e super-major produced 3.08mn barrels of oil equivalent per day (boepd) globally in the second quarter of 2019, marking an increase of 9% from 2.83mn boepd from a year ago. In the US, Chevron produced 898,000 boepd in the second quarter, marking an increase of 159,000 boepd on the same quarter of 2018. Output grew at the company’s Permian Basin operations and its Gulf of Mexico business, though this was partly o set by normal eld declines. e share of liquids decreased 23% y/y, while natural gas output rose 15% over the same period to 1.1bn cubic feet (32mn cubic metres).
Chevron said its second-quarter Permian production reached 421,000 bpd, representing growth of over 50% y/y.
e growth comes as a number of smaller Permian players rein back drilling in the basin. Occidental Petroleum is the only other company producing more than 420,000 bpd from the Per- mian currently.
Chevron’s average sales price per barrel of crude and natural gas liquids (NGLs) was $52 in the second quarter of this year, down from $59 per barrel a year earlier.
The average sales price of natural gas was
ExxonMobil has become the Permian’s most active driller by a long way recently, with over 50 rigs operating in the basin.
$0.68 per 1,000 cubic feet ($19.26 per 1,000 cubic metres) during the same period, down from $1.61 per 1,000 cubic feet ($45.60 per 1,000 cubic metres) a year ago.
ExxonMobil’s earnings drop
ExxonMobil reported estimated second-quarter earnings of $3.1bn, or $0.73 per diluted share, compared with $4bn a year earlier.
The company also benefited from the tax rate change in Alberta, which equated to about $500mn re ected in its earnings. e super-ma- jor’s capital and exploration expenditures were $8.1bn, representing a 22% rise on the previous year’s second quarter. ExxonMobil attributed this primarily to major investments in the Per- mian Basin.
e company produced 3.9mn boepd glob- ally, up 7% from the second quarter of 2018. Its liquids output rose 8%, which ExxonMobil attributed to Permian Basin growth and reduced downtime, with limited impact from entitlement e ects and asset sales. e company’s natural gas volumes increased 5% y/y, excluding entitlement e ects and asset sales.
ExxonMobil has become the Permian’s most active driller by a long way recently, with over 50 rigs operating in the basin. e super-major’s Permian production has risen by nearly 90% in 12 months to 274,000 boepd.™
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w w w . N E W S B A S E . c o m Week 31 08•August•2019