Chevron Reports Fourth Quarter Net Income of $3.7 Billion, Annual Earnings of $14.8 Billion

Chevron Corporation (NYSE: CVX) today reported earnings of $3.7 billion
($1.95 per share – diluted) for fourth quarter 2018, compared with $3.1
billion ($1.64 per share – diluted) in the fourth quarter of 2017, which
included $2.02 billion in tax benefits related to U.S. tax reform.
Included in the current quarter was an asset write-off totaling $270
million. Foreign currency effects increased earnings in the 2018 fourth
quarter by $268 million.

Full-year 2018 earnings were $14.8 billion ($7.74 per share – diluted),
compared with $9.2 billion ($4.85 per share – diluted) in 2017. Included
in 2018 were impairments and other charges of $1.59 billion and a gain
on an asset sale of $350 million. Foreign currency effects increased
earnings in 2018 by $611 million.

Sales and other operating revenues in fourth quarter 2018 were $40
billion, compared to $36 billion in the year-ago period.

“Financial and operational results were strong in 2018,” said Michael K.
Wirth, Chevron’s chairman of the board and chief executive officer.
“Earnings and cash flow continued to grow, and we delivered on all of
our financial priorities. We increased the dividend, funded an
attractive capital program, strengthened the balance sheet and returned
surplus cash to our shareholders. During the second half of the year we
repurchased $1.75 billion of the company’s stock, and earlier this week
we announced a quarterly dividend increase of $0.07 per share.”

“We reached significant milestones with upstream major capital projects
in 2018, including the start-up of Wheatstone Train Two, our fifth
operated LNG train in Australia,” Wirth added. “We also continued the
ramp-up of the Permian Basin in Texas and New Mexico, started production
from the Big Foot Project in the Gulf of Mexico, and continued to
progress our Future Growth Project at the company’s 50 percent-owned
affiliate, Tengizchevroil, in Kazakhstan.”

“Our net oil-equivalent production grew more than 7 percent in 2018 to a
record 2.93 million barrels per day. We expect that 2019 production will
continue to grow by 4 to 7 percent, excluding the impact of asset
sales,” Wirth commented.

The company added approximately 1.46 billion barrels of net
oil-equivalent proved reserves in 2018. These additions, which are
subject to final reviews, equate to approximately 136 percent of net
oil-equivalent production for the year. The largest additions were from
the Permian Basin in the United States and the LNG projects in
Australia. The company will provide additional details relating to 2018
reserve additions in its Annual Report on Form 10-K scheduled for filing
with the SEC on February 22, 2019.

“Downstream project milestones included the start-up of a new hydrogen
train at the Richmond Refinery, as well as the start-up and quick
ramp-up of the ethane cracker at the Chevron Phillips’ Cedar Bayou
plant,” Wirth added. “We also expanded our new retail marketing network
in Mexico to over 100 service stations.”

In late January, the company announced that it has signed an agreement
to acquire a 110,000 barrels per day refinery located in Pasadena, Texas.

At year-end, balances of cash, cash equivalents, time deposits and
marketable securities totaled $10.3 billion, an increase of $5.5 billion
from the end of 2017. Total debt at December 31, 2018 stood at $34.5
billion, a decrease of $4.3 billion from a year earlier.

UPSTREAM

Worldwide net oil-equivalent production was 3.08 million barrels per day
in fourth quarter 2018, compared with 2.74 million barrels per day from
a year ago. Net oil-equivalent production for the full year 2018 was
2.93 million barrels per day, compared with 2.73 million barrels per day
from the prior year.

U.S. upstream operations earned $964 million in fourth quarter 2018,
compared with $3.69 billion a year earlier. The decrease was primarily
due to the absence of the prior year benefit of $3.33 billion from U.S.
tax reform, partially offset by higher crude oil production and
realizations.

The company’s average sales price per barrel of crude oil and natural
gas liquids was $56 in fourth quarter 2018, up from $50 a year earlier.
The average sales price of natural gas was $2.01 per thousand cubic feet
in fourth quarter 2018, up from $1.86 in last year’s fourth quarter.

Net oil-equivalent production of 858,000 barrels per day in fourth
quarter 2018 was up 187,000 barrels per day from a year earlier.
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 partially offset by normal field declines and the impact of asset
sales of 17,000 barrels per day. The net liquids component of
oil-equivalent production in fourth quarter 2018 increased 30 percent to
674,000 barrels per day, while net natural gas production increased 20
percent to 1.10 billion cubic feet per day.

International upstream operations earned $2.33 billion in fourth quarter
2018, compared with $1.60 billion a year ago. The increase in earnings
was mainly due to higher natural gas sales volumes and prices partially
offset by higher depreciation expenses from higher production volumes
and an asset write-off. Foreign currency effects had a favorable impact
on earnings of $264 million between periods.

The average sales price for crude oil and natural gas liquids in fourth
quarter 2018 was $59 per barrel, up from $57 a year earlier. The average
sales price of natural gas was $6.81 per thousand cubic feet in the
quarter, compared with $4.93 in last year’s fourth quarter.

Net oil-equivalent production of 2.23 million barrels per day in fourth
quarter 2018 was up 156,000 barrels per day from a year earlier.
Production increases from major capital projects, primarily Wheatstone
and Gorgon in Australia, were partially offset by normal field declines
and production entitlement effects. The net liquids component of
oil-equivalent production decreased 1 percent to 1.19 million barrels
per day in the 2018 fourth quarter, while net natural gas production
increased 19 percent to 6.23 billion cubic feet per day.

DOWNSTREAM

U.S. downstream operations earned $256 million in fourth quarter 2018,
compared with earnings of $1.20 billion a year earlier. The decrease was
primarily due to the absence of the prior year benefit of $1.16 billion
from U.S. tax reform and higher operating expenses, partially offset by
higher margins on refined product sales.

Refinery crude oil input in fourth quarter 2018 increased 10 percent to
918,000 barrels per day from the year-ago period, primarily due to the
absence of turnarounds at the El Segundo, California refinery and the
absence of impacts from Hurricane Nate at the Pascagoula, Mississippi
refinery. Refined product sales of 1.21 million barrels per day were up
3 percent from fourth quarter 2017.

International downstream operations earned $603 million in fourth
quarter 2018, compared with $84 million a year earlier. The increase in
earnings was largely due to higher margins on refined product sales.
Foreign currency effects had a favorable impact on earnings of $85
million between periods.

Refinery crude oil input of 665,000 barrels per day in fourth quarter
2018 decreased 96,000 barrels per day from the year-ago period, mainly
due to the sale of the company’s interest in the Cape Town Refinery in
third quarter 2018 and crude unit maintenance at the Singapore Refining
Company.

Total refined product sales of 1.40 million barrels per day in fourth
quarter 2018 were down 8 percent from the year-ago period, primarily due
to the sale of the southern Africa refining and marketing business in
third quarter 2018.

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 2018 were $419 million, compared with
$3.46 billion in the year-ago period. The change between periods was
mainly due to the absence of a prior year tax charge of $2.47 billion
related to U.S. tax reform and the absence of a reclamation related
charge for a former mining asset. Foreign currency effects had a
favorable impact on earnings of $15 million between periods.

CASH FLOW FROM OPERATIONS

Cash flow from operations in 2018 was $30.6 billion, compared with $20.3
billion in 2017. Excluding working capital effects, cash flow from
operations in 2018 was $31.3 billion, compared with $19.8 billion in
2017 period. The 2017 results were retrospectively adjusted to conform
to new accounting standards that became effective for the company in
first quarter 2018.

CAPITAL AND EXPLORATORY EXPENDITURES

Capital and exploratory expenditures in 2018 were $20.1 billion,
compared with $18.8 billion in 2017. The amounts included $5.7 billion
in 2018 and $4.7 billion in 2017 for the company’s share of expenditures
by affiliates, which did not require cash outlays by the company.
Expenditures for upstream represented 88 percent of the companywide
total in 2018.

NOTICE

Chevron’s discussion of fourth quarter 2018 earnings with security
analysts will take place on Friday, February 1, 2019, 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
website at www.chevron.com
under the “Investors” section. Additional financial and operating
information and other complementary materials will be available under
“Events and Presentations” in the “Investors” section on the Chevron
website.

As used in this news release, the term “Chevron” and such terms as
“the company,” “the corporation,” “our,” “we,” “us” and “its” may refer
to Chevron Corporation, one or more of its consolidated subsidiaries, or
to all of them taken as a whole. All of these terms are used for
convenience only and are not intended as a precise description of any of
the separate companies, each of which manages its own affairs.

CAUTIONARY STATEMENTS RELEVANT TO FORWARD-LOOKING INFORMATION FOR THE
PURPOSE OF “SAFE HARBOR” PROVISIONS OF THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995

This news 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,” “positions,”
“pursues,” “may,” “could,” “should,” “will,” “budgets,” “outlook,”
“trends,” ”guidance,” “focus,” “on schedule,” “on track,” "is slated,”
“goals,” “objectives,” “strategies,” “opportunities,” 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 news 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
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 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
operations due to war, accidents, political events, civil unrest, severe
weather, cyber threats and terrorist acts, crude oil production quotas
or other actions that might be imposed by the Organization of Petroleum
Exporting Countries, or other natural or human causes beyond the
company’s 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
operational, investment or product changes required by existing or
future environmental statutes and regulations, including international
agreements and national or regional legislation and regulatory measures
to limit or reduce greenhouse gas emissions; the potential liability
resulting from other pending or future litigation; the company’s future
acquisition or disposition of assets or shares or the delay or failure
of such transactions to close based on required closing conditions; the
potential for gains and losses from asset dispositions or impairments;
government-mandated sales, divestitures, recapitalizations,
industry-specific taxes, tariffs, sanctions, changes in fiscal terms or
restrictions on scope of company operations; foreign currency movements
compared with the U.S. dollar; material reductions in corporate
liquidity and access to debt markets; 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 19
through 22 of the company’s 2017 Annual Report on Form 10-K. Other
unpredictable or unknown factors not discussed in this news release
could also have material adverse effects on forward-looking statements.

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