Chevron profit rises 4 percent, even as production falls

Fri Apr 27, 2012 10:32am EDT
 
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By Braden Reddall

(Reuters) - Chevron Corp, the second-largest U.S. oil company, reported a slightly higher-than-expected quarterly profit as rising oil prices and refining margins made up for a decline in oil and gas production.

Chevron shares slipped 0.2 percent in early trading, though that was better than the 1 percent decline for larger rival Exxon Mobil Corp on Thursday after it produced weaker-than-expected earnings due to a drop in oil and gas output.

Chevron's first-quarter profit rose to $6.47 billion, or $3.27 per share, from $6.21 billion, or $3.09 per share, a year earlier. That was just ahead of the $3.26 per share analysts had expected, according to the average on Thomson Reuters I/B/E/S. Revenue rose nearly 1 percent to $60.7 billion.

The company is grappling with weighty legal and political challenges due to an offshore leak in Brazil and a deadly accident at a natural gas well off Nigeria, and Morningstar analyst Allen Good hoped to hear more about them on the conference call on Friday morning.

"Updates on Brazil and Nigeria should be useful, as well as any additional guidance on further downstream sales," he said.

Chevron's downstream, or refining and marketing, division has pulled out of more than two dozen countries in the past few years, and it said last month it was reviewing options for Egypt, Pakistan and its Caltex refining unit in Australia.

BIG SPENDING, OUTPUT DOWN

Oil and gas production declined to 2.63 million barrels per day (bpd) on an oil-equivalent basis, from 2.76 million bpd a year before. Average benchmark oil prices rose about 12 percent over the same period.   Continued...

 
Gasoline is priced over $5 per gallon at a Chevron gasoline station in downtown Los Angeles, California March 13, 2012. REUTERS/Fred Prouser