Chevron Bounces Back to Profitability with $415million Net Income

Oil company, Chevron Corporation, on Friday, January 27, recorded earnings of $415 million ($0.22 per share – diluted) for fourth quarter 2016, compared with a loss of $588 million ($0.31 per share – diluted) in the 2015 fourth quarter.

Foreign currency effects increased earnings in the 2016 quarter by $26 million, compared with an increase of $46 million a year earlier.

Full-year 2016 results were a loss of $497 million ($0.27 per share – diluted) compared with earnings of $4.6 billion ($2.45 per share – diluted) in 2015.

Sales and other operating revenues in fourth quarter 2016 were $30 billion, compared to $28 billion in the year-ago period.

“Our 2016 earnings reflect the low oil and gas prices we saw during the year,” said Chairman and CEO John Watson. “We responded aggressively to those conditions, cutting capital and operating expenses by $14 billion. We are well positioned to improve earnings and be cash flow balanced in 2017 through continued tight spending and cost control and additional revenue from expected production growth. That confidence enabled us to increase the 2016 annual dividend payout for the 29th consecutive year.”

“We were able to reach noteworthy milestones in 2016 on major capital projects,” Watson added. “We achieved first gas and cargo shipments at our Gorgon Project in Australia, first gas at our Chuandongbei Project in China, and increased production from our Permian Basin shale and tight oil properties. In addition, we announced the final investment decision on the Future Growth and Wellhead Pressure Management Project at the company’s 50 percent-owned affiliate, Tengizchevroil, in Kazakhstan.”

Watson commented that the company added approximately 900 million barrels of net oil-equivalent proved reserves in 2016.

These additions, which are subject to final reviews, equate to approximately 95 percent of net oil-equivalent production for the year.

The largest additions were from the Future Growth Project at Tengizchevroil, the Permian Basin in the United States and the Wheatstone Project in Australia. The company will provide additional details relating to 2016 reserve additions in its Annual Report on Form 10-K scheduled for filing with the SEC on February 23, 2017.

At year-end, balances of cash, cash equivalents and marketable securities totaled $7.0 billion, a decrease of $4.3 billion from the end of 2015. Total debt at December 31, 2016 stood at $46.1 billion, an increase of $7.5 billion from a year earlier.

Worldwide net oil-equivalent production was 2.67 million barrels per day in fourth quarter 2016, essentially unchanged from the 2015 fourth quarter.

Net oil-equivalent production for the full year 2016 was 2.59 million barrels per day, a decrease of 1 percent from the prior year.