Chevron profits sink; natural gas drills shut down
NEW YORK — Chevron on Friday said that its second-quarter profits fell 71 percent and the second-largest U.S. oil company put its entire land-based natural gas drilling operation on hold, citing dismal demand.
“By the end of the year, we will not have a single gas land-rig running,” George Kirkland, Chevron’s executive vice president for global upstream and gas said in a conference call.
With natural gas plunging to about a quarter of its value last year, “it really doesn’t make sense right now to be drilling those gas wells,” he said.
Chevron said its net income amounted to $1.75 billion, or 87 cents per share, for the three-month period that ended June 30. That compared with $5.98 billion, or $2.90 per share, in the same period last year.
The company said its net income suffered from a weak U.S. dollar, amounting to $453 million in reduced earnings. That compares with an income benefit of $126 million in the same period last year.
Analysts surveyed by Thomson Reuters expected earnings of 95 cents per share. Those estimates typically exclude one-time items.
San Ramon, Calif.-based Chevron says total revenue fell 51 percent to $40 billion from $81 billion a year ago.
“The demand for refined products remained generally weak,” Chairman and CEO Dave O’Reilly said in a statement.
Raymond James analyst Pavel Molchanov said he still considers Chevron stock a strong buy despite the weak earnings report. Like Exxon Mobil, Chevron has spread its refining operations around the world and doesn’t depend on American consumers to make money.
“Petroleum demand in the United States is the weakest of any major economy,” Molchanov said. “They’re particularly focused in Asia where the economy is relatively decent.”
The company said a barrel for crude oil and natural gas liquids fetched $53 in the second quarter, compared with $110 in the second quarter of 2008.
Chevron’s production numbers, however, stood out when compared with other major oil companies reporting earnings this week.
Chevron boosted net oil-equivalent production by 5 percent. On Thursday, Royal Dutch Shell, Europe’s biggest oil company, said its production dipped 6 percent. Exxon Mobil, the world’s biggest publicly traded oil company, said its production fell 3 percent.
During the quarter, Chevron’s subsidiaries started drawing crude and natural gas from deepwater production facilities in the Gulf of Mexico and off the coasts of Angola and Brazil.
The company also boosted capital and exploratory operations, spending $11.4 billion in the first half of the year, compared with $10.3 billion in the first six months of 2008.
Company shares rose $1.06 to $68.76 Friday.
Related News
Patterson-UTI reports increase in September drilling activityOctober 5th, 2009 Patterson-UTI says drilling activity up in Sept.HOUSTON — Oil and gas driller Patterson-UTI Energy Inc. on Monday said its September drilling activity rose sequentially as oil prices stabilized, and oil and gas companies anticipated a future expected recovery in the economy.
Chevron Australia signs natural gas deals worth $60 billion with South Korea, JapanSeptember 10th, 2009 Chevron signs $60B gas deal with S. Korea, JapanSYDNEY — Energy giant Chevron signed deals worth 70 billion Australian dollars ($60 billion) to supply liquefied natural gas to Japan and South Korea, Australia's prime minister said Thursday.
FX Energy to plug and abandon Ostrowiec-1 well, shares fall 21 pctAugust 27th, 2009 FX Energy to abandon Ostrowiec-1 well, shares fallSALT LAKE CITY — FX Energy Inc. on Thursday said it stopped drilling operations at the Ostrowiec-1 wildcat well, which it plans to plug and abandon because it encountered high pressure nonflammable nitrogen gas and lost circulation while coring the target reservoir.
Australian government gives final approval for $41 billion gas sale to ChinaAugust 26th, 2009 Australia gives final approval to Chinese gas saleCANBERRA, Australia — Australia gave final approval Wednesday for a natural gas field development that will export $41 billion in energy to China over 20 years. Environment Minister Peter Garrett said that joint venture partner Chevron had agreed to meet the 28 environmental conditions he had set for the development of the Gorgon gas field off northwest Australia.
Drilling tracts off Texas coast draw lukewarm interest, with low gas prices and strong supplyAugust 18th, 2009 Interest lukewarm in sale of offshore gas leasesNEW ORLEANS — With natural gas prices down two-thirds or more from a year ago and supplies backlogged, interest in Texas offshore leases has dropped. The Minerals Management Service said Tuesday that 26 companies submitted 189 bids on 162 federal tracts — down sharply from last year's western Gulf of Mexico sale that attracted 423 bids from 53 companies on 319 tracts.
Atlas Energy profit tumbles 68 percent on weak natural gas prices, demandAugust 10th, 2009 Atlas Energy 2Q profit falls, misses expectationsPITTSBURGH —Atlas Energy Resources LLC on Monday said its second-quarter profit declined 68 percent and missed analyst expectations, as natural gas prices and demand remained weak. Earnings fell to $12.2 million, or 19 cents per share, compared with $38.4 million, or 57 cents per share, last year.
Marathon 2Q earns fall 47 percent as oil prices fell, but company easily beats expectationsAugust 3rd, 2009 Marathon 2Q profits plunge with oil pricesNEW YORK — Marathon Oil Corp. said Monday its second-quarter profit fell 47 percent from a year ago when crude barrels fetched twice the price.
Chevron 2Q earns fall 71 percent as global petroleum demand falls; production increasesJuly 31st, 2009 Chevron profits tumble 71 pct because of cheap oilNEW YORK — Chevron on Friday said that its second-quarter profits fell 71 percent and the second-largest U.S. oil company put its entire land-based natural gas drilling operations on hold, citing dismal demand.
Chevron 2Q earns fall 71 percent as global petroleum demand fallsJuly 31st, 2009 Chevron 2Q earns tumble 71 percentNEW YORK — Chevron Corp. says its second-quarter profit fell 71 percent as demand for crude oil and gasoline plunged.
Low energy prices slash profits among oil giants and spending comes into focusJuly 31st, 2009 Major oil companies review spending; demand wanesNEW YORK — Oil companies are taking a hard look at their finances following a woeful six months in which slumping energy demand slashed profits for every international integrated crude producer. Oil majors, including Exxon Mobil, French petroleum giant Total SA saw crude production fall during the second quarter.
With crude prices down, oil and gas companies expected to post far lower profitsJuly 14th, 2009 Oil industry profits expected to fall sharplyHOUSTON — Big Oil is set for another big flop. For the second straight quarter, Exxon Mobil, Royal Dutch Shell and most of the world's largest oil companies are poised to report quarterly earnings that pale in comparison to a year ago, when results were buoyed by crude prices that topped out near $150 a barrel.
Chevron says 2Q earnings lifted by higher oil prices; overall results likely to be lowerJuly 9th, 2009 Chevron says oil prices helped 2Q earns v. 1QHOUSTON — Chevron Corp.
Chevron says first-quarter profit falls 64 percent on lower crude, gas pricesMay 1st, 2009 Chevron 1Q profit falls 64 pct as oil prices fallHOUSTON — Chevron Corp. says its first-quarter profit fell 64 percent as it, along with competitors, was stung by lower oil and natural gas prices.
Schlumberger first-quarter profit falls 30 percent as oilfield activity declinesApril 24th, 2009 Schlumberger profit tumbles 30% as drilling dropsHOUSTON — Schlumberger Ltd. says its first-quarter earnings tumbled about 30 percent as oil and natural gas companies cut back on exploration and drilling amid lower prices and demand.
ONGC to start drilling wells in Gulf of KhambhatMarch 10th, 2009 SURAT - Oil and Natural Gas Corp (ONGC) will soon start drilling three exploration wells at a depth of 2,500 to 4,500 metres in the Gulf of Khambhat off northwest Gujarat, officials said. The company has got the clearance from the ministry of environment and forests Feb 22 to start drilling the wells in the CB-ONN-2004/1/2 blocks, they said.
Loading ...