By Dow Jones Business News, November 01, 2013, 09:35:00 AM EDT
Chevron Increases Spending Guidance
Among U.S. energy companies, Chevron Corp.'s ( CVX ) oil and gas output is a distant second place to Exxon Mobil Corp.
But during the third quarter the California company's spending eclipsed its bigger rival.
Chevron, which has half the revenues of Exxon, said on Friday that it plunked down $10.6 billion last quarter for
capital and exploratory costs. That is a notch higher than Exxon, which shelled out $10.5 billion during the same
period. In a conference call, Chevron Chief Financial Officer Patricia Yarrington said the company's spending this year
would be about 10% higher than planned.
Both companies are spending at historic levels as they invest in massive projects aimed at boosting their oil and gas
output, including plants in Australia that chill natural gas into liquid form for export. Exxon has still spent more
through the first nine months of 2013--$32.6 billion, compared with Chevron's $28.9 billion.
"We are in a capital intensive period as we move forward our Australian LNG projects and our developments in the
deepwater Gulf of Mexico that will deliver significant new volumes to the company," said Chevron spokesman Kurt
This isn't the first time Chevron has upset the apple cart in spending, but it's been a while. The company outspent
Exxon during part of 2009, and also during periods of 2007 and 2006, according to a Wall Street Journal review of the
companies' financial disclosures. Across the past 42 quarters, Exxon's spending has exceeded Chevron's in all but five.
Exxon pumps a little more than 4 million barrels a day of oil and its equivalent in natural gas, compared with
Chevron's 2.6 million barrels of production. When it comes to financial firepower, the gulf between the two companies
isn't as wide as the output and sales figures suggest.
Chevron reported cash flow for the third quarter of $10.3 billion, compared with Exxon's $13.6 billion. The reason?
Chevron squeezes more profit from its production than Exxon, thanks to a strategy that has focused more on oil. Exxon
has hugely expanded its holdings in U.S. natural gas at a time of low prices for that fuel.
Write to Daniel Gilbert at Daniel.Gilbert@wsj.com
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