Chevron Reports Fourth Quarter Loss of $588 Million and 2015 Earnings of $4.6 Billion

• Fourth quarter earnings include impairments and other charges of $1.1 billion
• 107 percent oil and gas reserves replacement

--(BUSINESS WIRE)-- Chevron Corporation (NYSE:CVX) today reported a loss of $588 million ($0.31 per share – diluted) for fourth quarter 2015, compared with earnings of $3.5 billion ($1.85 per share – diluted) in the 2014 fourth quarter. Foreign currency effects increased earnings in the 2015 quarter by $46 million, compared with an increase of $432 million a year earlier.

Full-year 2015 earnings were $4.6 billion ($2.45 per share – diluted) compared with $19.2 billion ($10.14 per share – diluted) in 2014.

Sales and other operating revenues in fourth quarter 2015 were $28 billion, compared to $42 billion in the year-ago period.

“Our 2015 earnings were down significantly from the previous year, reflecting a nearly 50 percent year-on-year decline in crude oil prices,” said Chairman and CEO John Watson.

“We’re taking significant action to improve earnings and cash flow in this low price environment,” Watson stated. “Operating expenses and capital spending were reduced $9 billion in 2015 from 2014, and I expect similarly large reductions again in 2016. In addition, asset sales proceeds were $6 billion in 2015, with additional sales planned for 2016 and 2017.”

“Improved refinery reliability allowed us to capture the benefits of a favorable margin environment and post excellent downstream results for the year,” Watson added. “We continued to reshape the downstream portfolio with well-timed asset sales and good progress on petrochemical investments.”

“We advanced our upstream major capital projects,” Watson added. “We had first production from two deepwater projects in

, and ramped up production from Jack/St. Malo in the deepwater Gulf of Mexico and our shale and tight resources in the Permian Basin. We made significant progress on our LNG projects in

, in particular the Gorgon Project where we expect to be producing LNG within the next few weeks. Successful completion and start-up of these and other major capital projects will translate into significantly lower capital spending, higher production and growing cash generation in the months ahead.”

Watson commented that the company added approximately 1.02 billion barrels of net oil-equivalent proved reserves in 2015. These additions, which are subject to final reviews, equate to approximately 107 percent of net oil-equivalent production for the year. The largest additions were from production entitlement effects in several locations and drilling results for the Permian Basin in

and the Wheatstone Project in

. The company will provide additional details relating to 2015 reserve additions in its Annual Report on Form 10-K scheduled for filing with the SEC on February 25, 2016.

At year-end, balances of cash, cash equivalents, time deposits and marketable securities totaled $11.3 billion, a decrease of $1.9 billion from the end of 2014. Total debt at December 31, 2015 stood at $38.6 billion, an increase of $10.8 billion from a year earlier.

UPSTREAM

Worldwide net oil-equivalent production was 2.67 million barrels per day in fourth quarter 2015, up from 2.58 million barrels per day in the 2014 fourth quarter. Net oil-equivalent production for the full year 2015 was 2.62 million barrels per day, an increase of 2 percent from the prior year, and within the range of the production guidance for the year. Production increases from project ramp-ups in

and

, and production entitlement effects in several locations, were partially offset by the Partitioned Zone shut-in and normal field declines for both comparative periods.

upstream operations incurred a loss of $1.95 billion in fourth quarter 2015 compared to earnings of $432 million from a year earlier. The decrease was due to lower crude oil realizations, higher depreciation expenses, higher exploration expenses and lower gains on asset sales, partially offset by higher crude oil production. The increase in depreciation and exploration expenses was primarily due to impairments and project cancellations.

The company’s average sales price per barrel of crude oil and natural gas liquids was $35 in fourth quarter 2015, down from $66 a year ago. The average sales price of natural gas was $1.54 per thousand cubic feet, compared with $3.34 in last year’s fourth quarter.

Net oil-equivalent production of 719,000 barrels per day in fourth quarter 2015 was up 46,000 barrels per day, or 7 percent, from a year earlier. Production increases due to project ramp-ups in the Gulf of Mexico and the Permian Basin in

and

were partially offset by normal field declines and the effect of asset sales. The net liquids component of oil-equivalent production increased 8 percent in the 2015 fourth quarter to 499,000 barrels per day, while net natural gas production increased 4 percent to 1.32 billion cubic feet per day.

International upstream operations earned $593 million in fourth quarter 2015 compared with $2.24 billion a year earlier. The decrease was due to lower crude oil and natural gas realizations, and lower gains on asset sales. Partially offsetting these effects were lower depreciation, operating, tax and exploration expenses, and higher crude oil production. Foreign currency effects increased earnings by $91 million in the 2015 quarter, compared with an increase of $453 million a year earlier.

The average sales price for crude oil and natural gas liquids in fourth quarter 2015 was $39 per barrel, down from $68 a year earlier. The average price of natural gas was $3.99 per thousand cubic feet, compared with $5.38 in last year’s fourth quarter.

Net oil-equivalent production of 1.95 million barrels per day in fourth quarter 2015 increased 45,000 barrels per day, or 2 percent, from a year ago. Production increases from entitlement effects in several locations and project ramp-ups in

and several other areas were partially offset by the Partitioned Zone shut-in and normal field declines. The net liquids component of oil-equivalent production was essentially unchanged at 1.28 million barrels per day in the 2015 fourth quarter, while net natural gas production increased 6 percent to 4.07 billion cubic feet per day.

DOWNSTREAM

downstream operations earned $496 million in fourth quarter 2015 compared with earnings of $889 million a year earlier. The decrease was primarily due to the absence of 2014 gains on asset sales, partially offset by higher margins on refined product sales in fourth quarter 2015 compared to the year-ago period.

Refinery crude oil input in fourth quarter 2015 decreased 1 percent to 916,000 barrels per day from the year-ago period.

Refined product sales of 1.23 million barrels per day were unchanged from fourth quarter 2014. Branded gasoline sales of 515,000 barrels per day were up 1 percent from the 2014 period.

International downstream operations earned $515 million in fourth quarter 2015 compared with $629 million a year earlier. The decrease was primarily due to an unfavorable change in effects on derivative instruments and lower margins on refined product sales, partially offset by the absence of certain one-time employee benefits expenses in the year-ago period and lower income tax expense. Foreign currency effects decreased earnings by $45 million in fourth quarter 2015, compared with a decrease of $21 million a year earlier.

Refinery crude oil input of 783,000 barrels per day in fourth quarter 2015 decreased 39,000 barrels per day from the year-ago period, mainly as a result of the Caltex Australia Limited divestment.

Total refined product sales of 1.47 million barrels per day in fourth quarter 2015 were down 77,000 barrels per day from the year-ago period, mainly as a result of the Caltex Australia Limited divestment. Excluding the effects of the Caltex Australia Limited divestment, refined product sales were up 35,000 barrels per day, primarily reflecting higher sales of gasoline.

ALL OTHER

All Other consists of worldwide cash management and debt financing activities, corporate administrative functions, insurance operations, real estate activities and technology companies.

Net charges in fourth quarter 2015 were $238 million, compared with $720 million in the year-ago period. The change between periods was mainly due to lower corporate tax items and other corporate charges.

CASH FLOW FROM OPERATIONS

Cash flow from operations in 2015 was $19.5 billion, compared with $31.5 billion in 2014. Excluding working capital effects, cash flow from operations in 2015 was $21.4 billion, compared with $32.0 billion in 2014.

CAPITAL AND EXPLORATORY EXPENDITURES

Capital and exploratory expenditures in 2015 were $34.0 billion, compared with $40.3 billion in 2014. The amounts included $3.4 billion in 2015 and $3.5 billion in 2014 for the company’s share of expenditures by affiliates, which did not require cash outlays by the company. Expenditures for upstream represented 92 percent of the companywide total in 2015.

NOTICE

Chevron’s discussion of fourth quarter 2015 earnings with security analysts will take place on Friday, January 29, 2016, 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” 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.

CAUTIONARY STATEMENTS 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 or phrases such as “anticipates,” “expects,” “intends,” “plans,” “targets,” “forecasts,” “projects,” “believes,” “seeks,” “schedules,” “estimates,” “may,” “could,” “should,” “budgets,” “outlook,” “on schedule,” “on track” 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, many 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 report. 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 chemicals margins; the company's ability to realize anticipated cost savings and expenditure reductions; 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 business, results of operations and financial condition of the company’s suppliers, vendors, partners, and equity affiliates, particularly during extended periods of low prices for crude oil and natural gas; 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 business or operations due to war, accidents, political events, civil unrest, severe weather, cyber threats and terrorist acts, crude oil production quotas that might be imposed by the Organization of Petroleum Exporting Countries, or other natural or human causes beyond its control; changing economic, regulatory and political environments in the various countries in which the company operates; general domestic and international economic and political conditions; the potential liability for remedial actions or assessments under existing or future environmental regulations and litigation; significant business, operational, investment or product changes required by existing or future environmental statutes and regulations, including international agreements and national, regional and state legislation and regulatory measures to limit greenhouse gas emissions; 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

dollar; reductions in credit ratings; the effects of changed accounting rules under generally accepted accounting principles promulgated by rule-setting bodies; the company’s ability to identify and mitigate the risks and hazards inherent in operating in the global energy industry; and the factors set forth under the heading “Risk Factors” on pages 22 through 24 of the company’s 2014 Annual Report on Form 10-K. Other unpredictable or unknown factors not discussed in this press release could also have material adverse effects on forward-looking statements.

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Chevron Corporation,

Braden Reddall, +1-925-790-6247

Source: Chevron Corporation

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