Chevron Corporation (ticker: CVX) reported earnings of $3.1 billion for Q4 2017. For reference, in Q4 2016 the company made $415 million. Q4 2017 earnings include non-cash tax benefits of $2.02 billion, related to the U.S. tax reform and a non-cash charge of $190 million related to a former mining asset. The company said that foreign currency effects decreased earnings in the Q4 2017 by $96 million.
Full-year 2017 earnings were $9.2 billion compared with a loss of $497 million in 2016. Included in 2017 were non-cash provisional tax benefits of $2.02 billion related to U.S. tax reform, gains on asset sales of $1.44 billion and impairments and other non-cash charges of $840 million. Foreign currency effects decreased earnings in 2017 by $446 million.
Sales and other operating revenues in Q4 2017 were $36 billion, compared to $30 billion in Q4 2016.
“Earnings and cash flow grew significantly in 2017,” said Chairman and CEO Michael Wirth. “We achieved our objective of being cash flow positive through deliberate actions to reduce capital expenditures, lower our cost structure, start and ramp-up projects and conclude planned asset sales. Higher commodity prices helped as well. These improvements give us the confidence to increase the dividend by $0.04 per share, which puts us on track to make 2018 the 31st consecutive year with an increase in annual dividend payout.”
“We replaced more than 150 percent of the reserves we produced, and reached several significant upstream project milestones in 2017,” Wirth added. “These included our first LNG shipments from Train 3 at Gorgon and Train 1 at Wheatstone in Australia. We also posted impressive production growth in the Permian Basin in the U.S.”
The company added approximately 1.54 billion barrels of net oil-equivalent proved reserves in 2017. These additions equate to approximately 155% of net oil-equivalent production for the year. The largest additions were from the Permian Basin in the United States and the Gorgon Project in Australia.
“Our net oil-equivalent production grew by 5 percent in 2017, including the effects of asset sales,” Wirth said. “Importantly, we expect that our 2018 production will continue to grow by 4 to 7 percent, driven primarily by Australian LNG and the acceleration of development activities in the Permian, where investment economics continue to improve.”
Upstream is up
Worldwide net oil-equivalent production was 2.74 MMBOPD in Q4 2017, compared with 2.67 MMBOPD from Q4 2016. Net oil-equivalent production for the full year 2017 was 2.73 MMBOPD, compared with 2.59 MMBOPD from 2016.
U.S. upstream operations earned $3.69 billion in Q4 2017, compared with earnings of $121 million from a year earlier. The improvement reflected a benefit of $3.33 billion from U.S. tax reform along with higher crude oil realizations.
Net oil-equivalent production of 671,000 BOPD in Q4 2017 was down 11,000 BOPD from Q4 2016. Production increases from shale and tight properties in the Permian Basin in Texas and New Mexico, and base business in the Gulf of Mexico, were more than offset by the impact of asset sales of 57,000 BOPD, normal field declines, higher downtime and hurricane effects in the Gulf of Mexico.
The net liquids component of oil-equivalent production in Q4 2017 increased 2% to 518,000 BOPD, while net natural gas production decreased 12% to 920 MMcf/d primarily as a result of asset sales.
International upstream operations earned $1.60 billion in Q4 2017, compared with $809 million in Q4 2016. Net oil-equivalent production of 2.07 MMBOPD in Q4 2017 was up 82,000 BOPD from Q4 2016. Production increases from major capital projects, primarily Gorgon and Wheatstone in Australia and Angola LNG, were partially offset by the impact of asset sales of 27,000 BOPD. The net liquids component of oil-equivalent production decreased 3% to 1.20 MMBOPD in Q4 2017, while net natural gas production increased 16% to 5.24 Bcf/d.
2017 CapEx – pump it upstream
Capital and exploratory expenditures in 2017 were $18.8 billion, compared with $22.4 billion in 2016. The amounts included $4.7 billion in 2017 and $3.8 billion in 2016 for the company’s share of expenditures by affiliates, which did not require cash outlays by the company. Upstream expenditures represented 87% of the company’s investments.
For the projected 2018 CapEx, please click here.
