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Chevron reported second quarter results Friday along with fellow oil major ExxonMobill. $CVX reported an $8.3 billion loss as the coronavirus “significantly reduced demand.” Chevron's average price per barrel of oil and NGL fell more than 60% year over year.

Chevron Gas Station

Chevron Inc. (NYSE: $CVX) Reported Earnings Before Open Friday

($1.59) Missed ($0.92) EPS AND $13.49B Missed $22.097 Billion Revenue Forecast

Earnings

Chevron Corp. (NYSE: CVX) reported second quarter results on Friday. Chevron reported an $8.3 billion loss as the coronavirus pandemic “significantly reduced demand.” The oil giant lost $1.59 per share on an adjusted basis, while revenue came in at $13.49 billion. Analysts expected the company to post a loss of 92 cents per share, on $22.097 billion in revenue, according to estimates from Refinitiv.

In the same quarter a year ago the company earned $2.27 per share on $36.32 billion in revenue.

Part of the company’s loss came from noncash net charges of $5.2 billion, including a $1.8 billion write-down primarily associated with a downward revision in commodity price outlook, as well as a $2.6 billion impairment change related to Chevron’s Venezuela investment. The company also reported $780 million in expenses related to job cuts.

Chevron Corporation NYSE: CVX

Market Reaction Pre-market 83.35 −2.92 (-3.38%)

Highlights

“The past few months have presented unique challenges,” CEO Michael Wirth said in a statement. “The economic impact of the response to COVID-19 significantly reduced demand for our products and lowered commodity prices. Given the uncertainties associated with economic recovery, and ample oil and gas supplies, we made a downward revision to our commodity price outlook.”

  • Average sales price per barrel of oil and natural gas liquids in the U.S. was $19, down from $52 a year earlier.
  • Natural gas prices rose to 81 cents per thousand cubic feet, up from 68 cents a year 

CVX Earnings Q2 20

Dividend

“We’re focused on what we can control. Our actions are guided by our values and our long-standing financial priorities: to protect the dividend, invest for long term value and maintain a strong balance sheet,” Wirth said.

Noble Energy Aquistion

Earlier in July, Chevron announced plans to buy independent oil and gas producer Noble Energy, in a move that Wirth said would be a “good deal” for shareholders in both companies. Including debt, the total value of the deal was $13 billion.

The acquisition would enhance Chevron’s portfolio in the oil-rich Permian Basin, as well as in Colorado’s DJ Basin. Noble Energy also has assets in Israel and West Africa, which will further enhance Chevron’s international footprint. It will also lead to around $300 million in annual cost savings, Chevron said.

The deal was the industry’s largest since oil prices plummeted in March and April, hit by a price war between Saudi Arabia and Russia, as well as an unprecedented plunge in demand due to the pandemic

 

About Chevron

What Analysts Will Be Watching

Chevron Corp. is a U.S.-based integrated oil and gas company with worldwide operations in exploration and production, refining and marketing, transportation and petrochemicals. It has large exposure to the Permian and to LNG with the  Wheatstone Chevron LNG Facility production starting in Western Australia

The Permian Basin remains a key source of capital flexibility, and it is a key issue behind many analysts preference for Chevron versus some of the other majors. Chevron’s liquids-rich upstream segment is likely to benefit from higher crude price realizations. This segment is expected to record higher production volumes on the back of major capital projects including Gorgon, and core developments in the Gulf of Mexico and Permian Basin.

Sources: TradersCommunity, AlphaStreet, XOM, CVX

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