EX-99.1 2 cvx-12312015x8xkex991.htm EXHIBIT 99.1 Exhibit
-1-

news release

 
 
EXHIBIT 99.1
 
FOR RELEASE AT 5:30 AM PST
 
JANUARY 29, 2016

 

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

SAN RAMON, Calif., January 29, 2016 – Chevron Corporation (NYSE: CVX) today reported earnings 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.
Earnings Summary
 
Fourth Quarter
 
Year
Millions of dollars
2015
 
2014
 
2015
 
2014
Earnings by business segment
 
 
 
 
 
 
 
Upstream
$(1,361)
 
$2,673
 
$(1,961)
 
$16,893
Downstream
1,011
 
1,518
 
7,601
 
4,336
All Other
(238)
 
(720)
 
(1,053)
 
(1,988)
Total (1)(2)
$(588)
 
$3,471
 
$4,587
 
$19,241
(1) Includes foreign currency effects
$46
 
$432
 
$769
 
$487
(2) Net income attributable to Chevron Corporation (See Attachment 1)
“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 Africa, 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 Australia, in particular the Gorgon Project
 
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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 the United States and the Wheatstone Project in Australia. 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 the United States and Bangladesh, and production entitlement effects in several locations, were partially offset by the Partitioned Zone shut-in and normal field declines for both comparitive periods.

U.S. Upstream
 
Fourth Quarter
 
Year
Millions of dollars
2015
 
2014
 
2015
 
2014
Earnings
$(1,954)
 
$432
 
$(4,055)
 
$3,327
U.S. 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 Texas and New Mexico 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.











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International Upstream
 
Fourth Quarter
 
Year
Millions of dollars
2015
 
2014
 
2015
 
2014
Earnings*
$593
 
$2,241
 
$2,094
 
$13,566
*Includes foreign currency effects
$91
 
$453
 
$725
 
$597
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 Bangladesh 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
U.S. Downstream
 
Fourth Quarter
 
Year
Millions of dollars
2015
 
2014
 
2015
 
2014
Earnings
$496
 
$889
 
$3,182
 
$2,637
U.S. 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
 
Fourth Quarter
 
Year
Millions of dollars
2015
 
2014
 
2015
 
2014
Earnings*
$515
 
$629
 
$4,419
 
$1,699
*Includes foreign currency effects
$(45)
 
$(21)
 
$47
 
$(112)
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



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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
 
Fourth Quarter
 
Year
Millions of dollars
2015
 
2014
 
2015
 
2014
Net Charges*
$(238)
 
$(720)
 
$(1,053)
 
$(1,988)
*Includes foreign currency effects
$0
 
$0
 
$(3)
 
$2
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.






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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 U.S. 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 - FINANCIAL REVIEW
Attachment 1
 
(Millions of Dollars, Except Per-Share Amounts)
 
 
 
 
 
 
CONSOLIDATED STATEMENT OF INCOME
 
 
(unaudited)
 
Three Months
Ended December 31
 
 
Year Ended
December 31
 
REVENUES AND OTHER INCOME
 
2015

 
2014

 
2015

 
2014

 
 
 
 
 
 
 
 
 
      Sales and other operating revenues *
 
$
28,014

 
$
42,111

 
$
129,925

 
$
200,494

Income from equity affiliates
 
919

 
1,555

 
4,684

 
7,098

Other income
 
314

 
2,422

 
3,868

 
4,378

Total Revenues and Other Income
 
29,247

 
46,088

 
138,477

 
211,970

COSTS AND OTHER DEDUCTIONS
 
 
 
 
 
 
 
 
Purchased crude oil and products
 
14,570

 
24,263

 
69,751

 
119,671

Operating, selling, general and administrative expenses
 
7,273

 
7,940

 
27,477

 
29,779

Exploration expenses
 
1,358

 
510

 
3,340

 
1,985

Depreciation, depletion and amortization
 
5,400

 
4,873

 
21,037

 
16,793

      Taxes other than on income *
 
2,856

 
3,118

 
12,030

 
12,540

Total Costs and Other Deductions
 
31,457

 
40,704

 
133,635

 
180,768

Income (Loss) Before Income Tax Expense
 
(2,210
)
 
5,384

 
4,842

 
31,202

Income tax expense (benefit)
 
(1,655
)
 
1,912

 
132

 
11,892

Net Income (Loss)
 
(555
)
 
3,472

 
4,710

 
19,310

Less: Net income attributable to noncontrolling interests
 
33

 
1

 
123

 
69

NET INCOME ATTRIBUTABLE TO
  CHEVRON CORPORATION
 
$
(588
)
 
$
3,471

 
$
4,587

 
$
19,241

 
 
 
 
 
 
 
 
 
PER-SHARE OF COMMON STOCK
 
 
 
 
 
 
 
 
Net Income (Loss) Attributable to Chevron Corporation
 
 
 
 
 
 
                                               - Basic
 
$
(0.31
)
 
$
1.86

 
$
2.46

 
$
10.21

                                               - Diluted
 
$
(0.31
)
 
$
1.85

 
$
2.45

 
$
10.14

Dividends
 
$
1.07

 
$
1.07

 
$
4.28

 
$
4.21

 
 
 
 
 
 
 
 
 
Weighted Average Number of Shares Outstanding (000's)
 
 
 
 
                                                     - Basic
 
1,869,072

 
1,871,332

 
1,867,941

 
1,883,633

                                                     - Diluted
 
1,874,313

 
1,883,650

 
1,874,971

 
1,897,897

 
 
 
 
 
 
 
 
 
* Includes excise, value-added and similar taxes.
 
$
1,717

 
$
2,004

 
$
7,359

 
$
8,186















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CHEVRON CORPORATION - FINANCIAL REVIEW
Attachment 2
 
(Millions of Dollars)
 
 
 
(unaudited)
 
 
EARNINGS BY MAJOR OPERATING AREA
 
Three Months
Ended December 31
 
 
Year Ended
December 31
 
 
 
2015

 
2014

 
2015

 
2014

Upstream
 
 
 
 
 
 
 
 
United States
 
$
(1,954
)
 
$
432

 
$
(4,055
)
 
$
3,327

International
 
593

 
2,241

 
2,094

 
13,566

Total Upstream
 
(1,361
)
 
2,673

 
(1,961
)
 
16,893

Downstream
 
 
 
 
 
 
 
 
United States
 
496

 
889

 
3,182

 
2,637

International
 
515

 
629

 
4,419

 
1,699

Total Downstream
 
1,011

 
1,518

 
7,601

 
4,336

All Other (1)
 
(238
)
 
(720
)
 
(1,053
)
 
(1,988
)
Total (2)
 
$
(588
)
 
$
3,471

 
$
4,587

 
$
19,241

SELECTED BALANCE SHEET ACCOUNT DATA
 
 
 
 
 
Dec. 31, 2015

 
Dec. 31, 2014

Cash and Cash Equivalents
 
 
 
 
 
$
11,022

 
$
12,785

Time Deposits
 
 
 
 
 
$

 
$
8

Marketable Securities
 
 
 
 
 
$
310

 
$
422

Total Assets
 
 
 
 
 
$
266,103

 
$
266,026

Total Debt
 
 
 
 
 
$
38,592

 
$
27,818

Total Chevron Corporation Stockholders' Equity
 
 
 
 
 
$
152,716

 
$
155,028

 
 
 
Year Ended
December 31
 
CASH FLOW FROM OPERATIONS
 
 
2015

 
2014

Net Cash Provided by Operating Activities
 
 
$
19,456

 
$
31,475

Net increase in Operating Working Capital
 
 
$
(1,979
)
 
$
(540
)
Net Cash Provided by Operating Activities Excluding Working Capital
 
$
21,435

 
$
32,015

 
 
Three Months
Ended December 31
 
 
Year Ended
December 31
 
CAPITAL AND EXPLORATORY EXPENDITURES (3)
2015

 
2014

 
2015

 
2014

United States
 
 
 
 
 
 
 
 
Upstream
 
$
1,670

 
$
2,582

 
$
7,582

 
$
8,799

Downstream
 
541

 
505

 
1,923

 
1,649

Other
 
171

 
206

 
418

 
584

Total United States
 
2,382

 
3,293

 
9,923

 
11,032

International
 
 
 
 
 
 
 
 
Upstream
 
6,104

 
7,672

 
23,535

 
28,316

Downstream
 
215

 
318

 
513

 
941

Other
 
6

 
7

 
8

 
27

Total International
 
6,325

 
7,997

 
24,056

 
29,284

Worldwide
 
$
8,707

 
$
11,290

 
$
33,979

 
$
40,316

(1)  Includes worldwide cash management and debt financing activities, corporate administrative functions, insurance operations, real estate activities, and technology companies.
 
 
 
 
 
 
 
(2)    Net Income Attributable to Chevron Corporation (See Attachment 1)
 
 
 
 
 
 
(3)    Includes interest in affiliates:
 
 
 
 
 
 
 
 
   United States
 
$
358

 
$
323

 
$
1,344

 
$
1,021

   International
 
583

 
722

 
2,053

 
2,446

Total
 
$
941

 
$
1,045

 
$
3,397

 
$
3,467


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CHEVRON CORPORATION - FINANCIAL REVIEW
Attachment 3
 
 
 
 
 
OPERATING STATISTICS (1)
 
Three Months
Ended December 31
 
 
Year Ended
December 31
 
NET LIQUIDS PRODUCTION (MB/D): (2)
 
2015

 
2014

 
2015

 
2014

United States
 
499

 
462

 
501

 
456

International
 
1,276

 
1,270

 
1,243

 
1,253

Worldwide
 
1,775

 
1,732

 
1,744

 
1,709

NET NATURAL GAS PRODUCTION (MMCF/D): (3)
 
 
 
 
 
 
 
 
United States
 
1,320

 
1,266

 
1,310

 
1,250

International
 
4,065

 
3,834

 
3,959

 
3,917

Worldwide
 
5,385

 
5,100

 
5,269

 
5,167

TOTAL NET OIL-EQUIVALENT PRODUCTION (MB/D): (4)
 
 
 
 
 
 
 
United States
 
719

 
673

 
720

 
664

International
 
1,954

 
1,909

 
1,902

 
1,907

Worldwide
 
2,673

 
2,582

 
2,622

 
2,571

SALES OF NATURAL GAS (MMCF/D):
 
 
 
 
 
 
 
 
United States
 
3,843

 
3,689

 
3,913

 
3,995

International
 
4,519

 
4,230

 
4,299

 
4,304

Worldwide
 
8,362

 
7,919

 
8,212

 
8,299

SALES OF NATURAL GAS LIQUIDS (MB/D):
 
 
 
 
 
 
 
 
United States
 
157

 
155

 
153

 
141

International
 
87

 
92

 
89

 
86

Worldwide
 
244

 
247

 
242

 
227

SALES OF REFINED PRODUCTS (MB/D):
 
 
 
 
 
 
 
 
United States
 
1,229

 
1,230

 
1,228

 
1,210

International (5)
 
1,471

 
1,548

 
1,507

 
1,501

Worldwide
 
2,700

 
2,778

 
2,735

 
2,711

REFINERY INPUT (MB/D):
 
 
 
 
 
 
 
 
United States
 
916

 
927

 
924

 
871

International
 
783

 
822

 
778

 
819

Worldwide
 
1,699

 
1,749

 
1,702

 
1,690

 
 
 
 
 
 
 
 
 
(1)    Includes interest in affiliates.
 
 
 
 
 
 
 
 
(2)    Includes: Canada - Synthetic Oil
 
51

 
44

 
47

 
43

                Venezuela Affiliate - Synthetic Oil
 
28

 
29

 
29

 
31

(3)    Includes natural gas consumed in operations (MMCF/D):
 
 
 
 
 
 
 
 
United States
 
66

 
68

 
66

 
71

International
 
433

 
441

 
430

 
452

(4)    Oil-equivalent production is the sum of net liquids production. net natural gas production and synthetic production. The oil-equivalent gas conversion ratio is 6,000 cubic feet of natural gas = 1 barrel of crude oil.
 
 
 
 
 
 
 
 
(5) Includes share of affiliate sales (MB/D):
 
412

 
487

 
420

 
475