Chevron reported in its interim update that earnings for the second quarter 2011 are expected to be higher than in the first quarter 2011. Upstream results are projected to improve between sequential quarters, benefiting from higher crude oil prices.
Basis for Comparison in Interim Update
The interim update contains certain industry and company operating data for the second quarter 2011. The production volumes, realizations, margins and certain other items in the report are based on a portion of the quarter and are not necessarily indicative of Chevron’s full quarterly results to be reported on July 29, 2011.
Unless noted otherwise, all commentary is based on two months of the second quarter 2011 versus full first quarter 2011 results.
UPSTREAM
U.S. net oil-equivalent production during the first two months of the second quarter was in line with the first quarter 2011. International net oil-equivalent production declined 76,000 barrels per day, largely reflecting maintenance activity in Kazakhstan.
U.S. crude-oil realizations for the first two months of the second quarter increased about $18 per barrel to $111.11, and International liquids realizations improved approximately $13 to $108.46 per barrel. U.S. natural gas realizations increased $0.28 to $4.32 per thousand cubic feet, and international natural gas realizations increased $0.41 to $5.44 per thousand cubic feet.
International Upstream earnings in the second quarter are expected to reflect higher exploration expenses.
The company’s general guidance for the quarterly net after-tax charges related to corporate and other activities is between $250 million and $350 million. Due to foreign currency effects and the potential for irregularly occurring accruals related to income taxes and other matters, actual results may significantly differ from the guidance range.
