[Editor’s note: This story was updated at 9:55 a.m. CST Feb. 1.]
Chevron Corp. (NYSE: CVX) on Feb. 1 reported quarterly earnings that topped analysts’ estimates on higher prices and production, sending shares higher in morning trading.
Results for the San Ramon, Calif.-based company reflected a 12.5% increase in oil and gas production as net output rose to 3.08 million barrels per day (bbl/d). Prices paid for its crude were $59 a barrel in the quarter, up from $57 a year earlier, the company said.
It was “a good beat overall,” said Muhammed Ghulam, an analyst at Raymond James. “Permian production growth remained strong, up 12% compared to the prior quarter and 84% year-over-year,” he said.
The Trump administration last month added new sanctions against imports from Venezuela, where Chevron is the last major U.S. oil company with production operations. Fourth-quarter results show net production by its affiliate rose slightly to 24,000 bbl/d, from 23,000 bbl/d a year earlier.
Chevron’s cash flow from operations rose nearly 51% to $30.6 billion, reflecting the higher output and expense reduction. Investors have been pushing oil companies to restrain spending and increase returns to shareholders.
CEO Michael Wirth forecast oil-equivalent production this year to grow between 4% and 7%, excluding asset sales, compared with 2018.
Chevron reported a profit of $3.7 billion, or $1.95 per share, compared with $3.11 billion, or $1.64 a share a year earlier. Analysts’ mean forecast was $1.87 a share, according to Refinitiv.
Business unit results compared to the year-ago period were lower because of the impact of U.S. tax reform a year ago. Profit from oil and gas exploration was $3.29 billion compared with $5.29 billion a year earlier; refining profit fell to $256 million compared with $1.2 billion a year ago.
The company this week announced it would raise its dividend to $1.19 a share from $1.12 per share. It also agreed to pay $350 million to buy a refinery in Pasadena, Texas, from Brazilian state oil company Petrobras, confirming a Reuters report from Monday. The acquisition is intended to process oil flowing from its West Texas shale fields in the Permian Basin.
Shares were up 3.2% at $118.30, helping lift the Dow Jones Industrial Average.
Chevron officials are expected to discuss results on a conference call on Feb. 1.
Genel Energy named oil veteran and COO Bill Higgs as its top executive. Outgoing CEO Murat Özgül will remain with the oil and gas company as a special adviser to the board.
First production from the Seagull oil and gas field being developed by Neptune, BP and Japex in the British North Sea is expected by late 2021.
Oil and gas operating costs in the U.S. shale basins have come down recently following a drop in crude prices, BP’s head of upstream Bernard Looney said on Feb. 5.