EX-99.1 2 d378079dex991.htm PRESS RELEASE Press Release

Chevron Corporation

Policy, Government and Public Affairs

Post Office Box 6078

San Ramon, CA 94583-0778






SAN RAMON, Calif., July 11, 2012 – Chevron Corporation (NYSE: CVX) today reported in its interim update that earnings for the second quarter 2012 are expected to be higher than first quarter 2012. Upstream results are projected to be lower between sequential quarters, due to lower average crude oil prices, partially offset by foreign exchange gains. Downstream earnings in the second quarter are expected to be significantly higher, reflecting improved refining margins and gains on asset sales.

Basis for Comparison in Interim Update

This interim update contains certain industry and company operating data for the second quarter 2012. 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 27, 2012. The reader should not place undue reliance on this data.

Readers are advised that portions of the commentary below compare results for the first two months of the second quarter 2012 to full first quarter 2012 results, as indicated.


The table that follows includes information on production and price indicators for crude oil and natural gas for specific markets. Actual realizations may vary from indicative pricing due to quality and location differentials and the effect of pricing lags. International earnings reflect actual liftings, which may differ from production due to the timing of cargoes and other factors.


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              2011      2012  
             2Q      3Q      4Q      1Q      2Q thru
     2Q thru

U.S. Upstream


Net Production:



     MBD         478         453         447         456         466         n/a   

Natural Gas

     MMCFD         1,299         1,260         1,290         1,170         1,196         n/a   

Total Oil-Equivalent

     MBOED         694         662         661         651         665         n/a   



Avg. WTI Spot Price

     $/Bbl         102.34         89.51         93.98         103.00         98.81         93.34   

Avg. Midway Sunset Posted Price1

     $/Bbl         108.67         102.99         107.83         112.01         108.42         102.72   

Nat. Gas-Henry Hub “Bid Week” Avg.

     $/MCF         4.32         4.20         3.55         2.73         2.11         2.21   

Nat. Gas-CA Border “Bid Week” Avg.

     $/MCF         4.24         4.32         3.74         2.96         2.27         2.40   

Nat. Gas-Rocky Mountain “Bid Week” Avg.

     $/MCF         3.88         3.81         3.35         2.56         1.74         1.88   

Average Realizations:



     $/Bbl         108.80         101.27         105.37         108.37         108.80         n/a   


     $/Bbl         103.63         96.75         100.65         101.93         102.14         n/a   

Natural Gas

     $/MCF         4.35         4.14         3.62         2.48         2.05         n/a   

International Upstream


Net Production:



     MBD         1,388         1,353         1,369         1,338         1,305         n/a   

Natural Gas

     MMCFD         3,670         3,496         3,658         3,849         3,868         n/a   

Total Oil Equivalent

     MBOED         2,000         1,937         1,980         1,980         1,950         n/a   



Avg. Brent Spot Price 2

     $/Bbl         117.04         113.41         109.35         118.60         114.52         108.29   

Average Realizations:



     $/Bbl         106.84         102.82         101.33         110.03         104.47         n/a   

Natural Gas

     $/MCF         5.49         5.50         5.55         5.88         6.23         n/a   

1 As of second quarter 2012, Avg. Midway Sunset Posted Price is based on the average of four companies’ posted prices to better reflect realizations. Prior to second quarter 2012, the price is based only on the Chevron average posting.

2 The Avg. Brent Spot Price is based on Platts daily assessments, using Chevron’s internal formula to produce a quarterly average.

U.S. net oil-equivalent production increased 14,000 barrels per day during the first two months of the second quarter, largely reflecting increased production in the Gulf of Mexico. International net oil-equivalent production during the first two months of the second quarter decreased 30,000 barrels per day. Continued shut-in of production at the Frade field in Brazil and planned maintenance in Kazakhstan contributed to the majority of the decline. Production ramp-up at Usan in Nigeria partially offset these effects.

U.S. crude oil realizations during the first two months of the second quarter were in line with first quarter prices, reflecting the typical monthly lag on pricing in the Gulf of Mexico. International liquids realizations decreased $5.56, to $104.47 per barrel. U.S. natural gas realizations decreased $0.43 to $2.05 per thousand cubic feet, while international natural gas realizations increased $0.35 per thousand cubic feet during the first two months of the second quarter.


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The table that follows includes industry benchmark indicators for refining and marketing margins. Actual margins realized by the company will differ due to crude and product mix effects, planned and unplanned shutdown activity and other company-specific and operational factors.


                    2011      2012  
                  2Q      3Q      4Q      1Q      2Q thru
     2Q thru



Market Indicators:


Refining Margins


U.S. West Coast – Blended 5-3-1-1

           19.41         14.31         14.45         19.64         23.20         21.32   

U.S. Gulf Coast – Maya 5-3-1-1

           27.72         24.45         11.84         20.56         25.01         24.89   

Singapore – Dubai 3-1-1-1

           9.00         10.39         8.77         9.73         9.78         9.30   

Marketing Margins


U.S. West – Weighted DTW to Spot

           7.26         5.07         5.39         4.16         7.62         10.14   

U.S. East – Houston Mogas Rack to Spot

           4.49         4.46         4.35         3.90         5.33         5.10   

Asia-Pacific / Middle East / Africa

           5.74         6.19         5.65         4.75         6.42         n/a   

Actual Volumes:


U.S. Refinery Input

     MBD            875         897         763         926         921         n/a   

Int’l Refinery Input

     MBD            1,017         882         805         779         853         n/a   

U.S. Branded Mogas Sales

     MBD              510         529         515         505         519         n/a   

For the full second quarter, U.S. refining and marketing margins increased compared to first quarter 2012, while international refining margins decreased over the same period.

International downstream earnings in the second quarter are expected to include gains of approximately $200 million from asset sales. Additionally, favorable inventory effects are projected to benefit earnings consistent with the sharp decline in crude and product prices toward the end of the second quarter.

During the first two months of the second quarter, U.S. refinery crude-input volumes were in line with the first quarter. International refinery crude-input volumes increased 74,000 barrels per day compared to the first quarter, largely reflecting completion of planned maintenance at the Yeosu, South Korea and Cape Town, South Africa refineries.


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The company’s general guidance for the quarterly net after-tax charges related to corporate and other activities is between $300 million and $400 million. Due to the potential for non-ratable accruals related to income taxes, pension settlements, environmental and other matters, actual results may significantly differ from the guidance range.

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Chevron’s discussion of second quarter 2012 earnings with security analysts will take place on Friday, July 27, 2012, at 8:00 a.m. PDT. 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 will be contained in the Earnings Supplement that will be available under “Events & Presentations” in the “Investors” section on the website.




This interim update of Chevron Corporation 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 such as “anticipates,” “expects,” “intends,” “plans,” “targets,” “forecasts,” “projects,” “believes,” “seeks,” “schedules,” “estimates,” “budgets,” “outlook” 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, some 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 interim update. 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 chemical margins; 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 equity affiliates; 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 net production or manufacturing facilities or delivery/transportation networks due to war, accidents, political events, civil unrest, severe weather or crude oil production quotas that might be imposed by the Organization of Petroleum Exporting Countries; the potential liability for remedial actions or assessments under existing or future environmental regulations and litigation; significant investment or product changes under existing or future environmental statutes, regulations and litigation; 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; the effects of changed accounting rules under generally accepted accounting principles promulgated by rule-setting bodies; and the factors set forth under the heading “Risk Factors” on pages 29 through 31 of the company’s 2011 Annual Report on Form 10-K. In addition, such results could be affected by general domestic and international economic and political conditions. Other unpredictable or unknown factors not discussed in this interim update could also have material adverse effects on forward-looking statements.