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Supported by improved production and higher oil prices, coupled with a one-time tax benefit, earnings of oilfield technology firm $CVX climbed to $1.64 per share in 4Q17 from $0.22 per share a year ago. The upturn was partially offset by an asset-related charge. Revenues rose 19% to $37.6BIl, indicating the energy industry is on the recovery path.
$CVX intends to continue with its asset sale program in 4Q17, and expects the sales certain assets in South Africa to close in 2018. Chevron said it will decide on its annual dividend after considering potential market risks, including the uncertainty in OPEC. Going forward, the main component of the company’s investment will be in shale basins.
$CVX said overall production will grow between 6% and 8% in fiscal 2017. The company expects asset sales to have a negative impact of 30,000 barrels per day on full-year-production. Capital expenditure continues to trend down, and more than halved compared to three years ago. Full year Capex is expected to be lower than last year's levels.
Earnings from $CVX’s downstream activities jumped 60% to $1.8Bil in third quarter as gains from international operations more-than doubled. Income from US downstream operations grew 22% compared to last year. However, earnings from international upstream operations decreased by 23%, while the US operations remained in loss.
Benefiting from an upturn in downstream activities, $CVX’s 3Q17 revenue rose 20% to $36Bil. The strong topline and gains from asset sales pushed up earnings by 50% to $2Bil or $1.03 per share, which beat estimates. Upstream operations of the energy firm remained subdued, mainly due to hurricanes. Chevron’s rival $XOM reported a $4Bil profit in 3Q.
$CVX has elected Michael Wirth Chairman of the Board and CEO, effective February 1, 2018. Wirth succeeds John S Watson, who will be retiring on February 1, 2018. Wirth, who currently serves as EVP of Midstream and Development, had joined Chevron in 1982 as a design engineer.
$CVX estimates its operating expenses in fiscal 2017 to be $1.5-2Bil lower than last year’s expenses. Going ahead, increasing dividend is one of the top priorities. The other main long-term objective is to have sufficient cash balance – this year with asset sales and next year without asset sales.
$CVX expects strong production in the second half of 2017 from its assets currently on stream. In the full year, the impact of asset sales on production is estimated at 25,000-75,000 barrels per day. Chevron intends to start production at its new platform offshore Canada before year-en. Earnings are forecast to grow even at flat prices in future.
$CVX said it paid $2Bil as dividend in 2Q17. The proceeds from asset sales totaled $430MM in the quarter. The growing production and additional proceeds from asset sales are expected to favorably impact cash outcomes in the second half of the year. The company continues to guide $1.6Bil in annual net charges for its segment titled ‘Other’.
$CVX reported earnings of $853MM from its upstream operations in 2Q17, compared to a $2.46Bil loss in 2Q16. The improvement reflected narrowing of the loss from US operations and rebound of the international operations. Downstream earnings dropped 6.5% annually to $1.2Bil, owing to lower earnings from international operations.
Energy giant $CVX turned to profit in 2Q17, recovering from last year’s loss. Earnings were boosted by a 10% gain in production and lower expenses. Chevron posted earnings of $0.77 per share, compared to a $0.78 per share loss in 2Q16. Revenues climbed 18% annually to $34.5BIl, helped mainly by improved performance by the upstream segment.
$CVX stated that 1Q is typically its lowest cash generation quarter. A part of this is driven by the working capital. A portion of this working capital is reversing between the end of second quarter and end of the year. The company believes that there will be a strong cash generation in the second half of the year.
$CVX said that it is disappointed with the judgment of the Federal Court's decision related to the interest deduction on intercompany loans. Earlier, the company contested a tax bill of about $250MM. $CVX will review multiple options, including appealing in the High Court of Australia and settling the case with the Australian Taxation Office.