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Chevron Third Quarter 2022 Results

Share Print Bookmark    |    Friday,October 28,2022

Chevron Corp. reported its third quarter 2022 results.

Chevron reported earnings of $11.2 billion ($5.78 per share - diluted) for third quarter 2022, compared with $6.1 billion ($3.19 per share - diluted) in third quarter 2021. Included in the current quarter were pension settlement costs of $177 million. Foreign currency effects increased earnings by $624 million. Adjusted earnings of $10.8 billion ($5.56 per share - diluted) in third quarter 2022 compares to adjusted earnings of $5.7 billion ($2.96 per share - diluted) in third quarter 2021.

Sales and other operating revenues in third quarter 2022 were $64 billion, compared to $43 billion in the year-ago period.

Mike Wirth, Chevron's chairman and chief executive officer, said: "We delivered another quarter of strong financial performance with return on capital employed of 25 percent. At the same time, we're increasing investments and growing energy supplies, with our Permian production reaching another quarterly record."

During the quarter, the company paid dividends of $2.7 billion (6 percent higher per share than third quarter 2021), increased investments by over 50 percent from last year, paid down debt for the sixth consecutive quarter, and repurchased $3.75 billion of shares (more than 1 percent of shares outstanding). The company's third quarter Permian Basin unconventional production totaled over 700,000 barrels of oil equivalent per day, up over 12 percent from last year's quarter.

"We've also taken important steps to position both our traditional and new energy businesses to help meet the world's growing demand for our products."

Recent business highlights include:

• Approved a project to increase light crude oil processing capacity by 15 percent at the company's Pasadena, Texas refinery.
• Entered Namibia by acquiring an 80 percent working interest in a Deepwater oil and gas exploration lease.
• Received permits, as part of joint ventures, to assess carbon storage for three blocks totaling nearly 7.8 million acres in offshore Australia.
• Broke ground on a lower carbon feedstock expansion project at the company's bio-refinery in Germany.
• Delivered renewable natural gas for the first time from the Brightmark RNG Holdings LLC joint venture project in South Dakota.

Upstream

Worldwide net oil-equivalent production was 3.03 million barrels per day in third quarter 2022. International production decreased 3 percent primarily due to the end of concessions in Thailand and Indonesia, while U.S. production increased 4 percent compared to the same period a year ago, mainly in the Gulf of Mexico and the Permian Basin.

U.S. upstream operations earned $3.40 billion in third quarter 2022, compared with $1.96 billion a year earlier. The improvement was primarily due to higher realizations and higher volumes, partially offset by the absence of third quarter 2021 asset sale gains.

The company's average sales price per barrel of crude oil and natural gas liquids was $76 in third quarter 2022, up from $58 a year earlier. The average sales price of natural gas was $7.05 per thousand cubic feet in third quarter 2022, up from $3.25 in last year's third quarter.

Net oil-equivalent production of 1.18 million barrels per day in third quarter 2022 was up 49,000 barrels per day from a year earlier. The increase was primarily due to net production increases in the Gulf of Mexico, due to the absence of third quarter 2021 weather impacts, and in the Permian Basin. The net liquids component of oil-equivalent production in third quarter 2022 increased 6 percent to 891,000 barrels per day, and net natural gas production was 1.71 billion cubic feet per day, similar to last year's third quarter.

International upstream operations earned $5.91 billion in third quarter 2022, compared with $3.17 billion a year ago. The increase in earnings was primarily due to higher realizations, partially offset by lower sales volumes. Foreign currency effects had a favorable impact on earnings of $155 million compared to last year's third quarter.

The average sales price for crude oil and natural gas liquids in third quarter 2022 was $89 per barrel, up from $68 a year earlier. The average sales price of natural gas was $10.36 per thousand cubic feet in the third quarter, up from $6.28 in last year's third quarter.

Net oil-equivalent production of 1.85 million barrels per day in third quarter 2022 was down 56,000 barrels per day from third quarter 2021. The decrease was primarily due to the absence of production following expiration of the Erawan concession in Thailand and Rokan concession in Indonesia, partially offset by the absence of third quarter 2021 planned turnaround impacts at Tengizchevroil. The net liquids component of oil-equivalent production decreased 11 percent to 816,000 barrels per day in third quarter 2022, while net natural gas production increased 4 percent to 6.21 billion cubic feet per day compared to last year's third quarter.

Downstream

U.S. downstream operations reported earnings of $1.29 billion in third quarter 2022, compared with earnings of $1.08 billion a year earlier. The increase was mainly due to higher margins on refined product sales, partially offset by lower earnings from the 50 percent-owned Chevron Phillips Chemical Company and higher operating expenses that were largely associated with planned turnarounds.

Refinery crude oil input in third quarter 2022 decreased 13 percent to 779,000 barrels per day from the year-ago period, primarily due to planned turnarounds.

Refined product sales of 1.25 million barrels per day were up 5 percent from the year-ago period, mainly due to higher renewable fuel sales following the Renewable Energy Group, Inc. acquisition and higher jet fuel demand as restrictions from the pandemic continue to ease.

International downstream operations reported earnings of $1.24 billion in third quarter 2022, compared with $227 million a year earlier. The increase was mainly due to higher margins on refined product sales and a $56 million favorable swing in foreign currency impacts compared to last year's third quarter.

Refinery crude oil input of 651,000 barrels per day in third quarter 2022 increased 11 percent from the year-ago period as refinery runs increased due to higher demand.

Refined product sales of 1.44 million barrels per day in third quarter 2022 increased 4 percent from the year-ago period, mainly due to higher demand for jet fuel as restrictions from the pandemic continue to ease.

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 third quarter 2022 were $606 million, compared to $334 million a year earlier. The increase in net charges between periods was mainly due to the absence of third quarter 2021 favorable tax items and higher current quarter pension settlement expenses, partially offset by higher interest income from higher cash balances and lower debt interest expenses. Foreign currency effects decreased net charges by $108 million between periods.

Cash Flow

Cash flow from operations in the first nine months of 2022 was $37.1 billion, compared with $19.7 billion in the first nine months of 2021. Excluding working capital effects, cash flow from operations in the first nine months of 2022 was $35.9 billion, compared with $21.2 billion in the first nine months of 2021.

Capital Expenditures

Capital and exploratory expenditures for the company's consolidated entities (C&E) in the first nine months of 2022 were $8.2 billion, compared with $5.8 billion in the first nine months of 2021. Additionally, the company's share of equity affiliate capital and exploratory expenditures (Affiliate C&E) was $2.4 billion in the first nine months of 2022 and $2.3 billion in the first nine months of 2021 and did not require cash outlays by the company. C&E for 2022 includes $0.8 billion of inorganic spend largely associated with the formation of the Bunge joint venture. The acquisition of Renewable Energy Group, Inc. is not included in the company's C&E.