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Chevron report second quarter earnings Friday. With oil and natural gas prices at significant highs we look at capital spending and Noble Energy acquisition updates. Fellow oil major Exxon also reports Friday.

Chevron Gas Station

Chevron is the US's second biggest oil company after Exxon

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

$1.71 Beat $1.59 EPS AND $37.6 Beat $36.45 Billion Revenue Forecast

Earnings release: before market; conference call: 11 a.m.

Updated After Earnings 7/30/21

Chevron Corporation Q221 Earnings:

  • Revenue: USD37.6B (est USD36.45B)
  • Adj EPS: USD1.71 (est USD1.61)
  • Resuming Share Buybacks; Targeted At USD2-3B
  • Cash Flow From Operations: USD7B

“Our free cash flow was the highest in two years due to solid operational and financial performance and lower capital spending,” Chevron Chairman and CEO Mike Wirth said in a statement. “We will resume share repurchases in the third quarter at an expected rate of $2- $3 billion per year.”

Market CVX Reaction: Pre market101.53 ▼ 1.04 (▼1.01%)

Highlights

  • Chevron’s net oil-equivalent production rose 5% year over year to 3.13 million barrels per day during the second quarter of 2021.
  • The company’s U.S. upstream operations earned $1.4 billion, compared with a loss of $2.1 billion in the same period a year ago.
  • Chevron said its average sales price per barrel of crude oil and natural gas liquids was $54, up from $19 a year earlier.
  • Average sales price of natural gas was $2.16 per thousand cubic feet in second quarter 2021, up from $0.81 in last year's second quarter

Upstream operations:

"Worldwide net oil-equivalent production was 3.13 million barrels per day in second quarter 2021," the energy company said. "U.S. upstream operations earned $1.4 billion in second quarter 2021, compared with a loss of $2.1 billion a year earlier. The improvement was primarily due to higher crude oil realizations and the absence of second quarter 2020 charges for special items including impairments, write-offs and severance accruals. Higher crude oil production also contributed to the improvement between periods."

"The company's average sales price per barrel of crude oil and natural gas liquids was $54 in second quarter 2021, up from $19 a year earlier. The average sales price of natural gas was $2.16 per thousand cubic feet in second quarter 2021, up from $0.81 in last year's second quarter."

Downstream operations:

"U.S. downstream operations reported earnings of $776 million in second quarter 2021, compared with a loss of $988 million a year earlier. The increase was mainly due to higher margins on refined product sales, higher earnings from the 50 percent-owned Chevron Phillips Chemical Company, higher sales volumes, and lower operating expenses, including the absence of second quarter 2020 severance accruals."

"Refinery crude oil input in second quarter 2021 increased 65 percent to 956,000 barrels per day from the year-ago period, as the company increased refinery runs in response to higher demand and the improved refining margin environment."

 

Earnings Preview

Chevron Corp. (NYSE: CVX) report Q2 2021 earnings before market with projected EPS of $1.59 on projected revenue of $36.33 billion

Despite the sharp decline in revenues with the pandemic the company maintained it's quarterly dividend. 

“2020 was a year like no other,” said Mike Wirth, Chevron’s chief executive. He added that the company ended the year “with a strong balance sheet, having completed a major acquisition and increased our dividend payout for the 33rd consecutive year”.

Noble

The company’s $13bn acquisition of Noble,  the first big move in a wave of mergers that swept through the battered US oil sector last year. closed in the fourth quarter of 2020. For 2018 through 2020, the company generated asset sales proceeds of $7.7 billion, in the middle of its guidance range of $5-$10 billion. 

Outlook

Chevron hasn't issued any earnings guidance for the time being. Revenue guidance hasn't been issued by the company for now. 

 

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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