U.S. energy behemoth
) released its fourth-quarter 2013 interim update covering the
first two months of the quarter. Chevron expects its
fourth-quarter earnings to be similar to the previous quarter's
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In the upstream activities, the update is bearish as Chevron
projects lower sequential earnings from the segment. Decreased
domestic and international oil equivalent production during the
first two months of the December quarter as compared to
third-quarter 2013, has justified the company's expectation. Both
domestic and international liquid price realization during
Oct-Nov 2013 has decreased from the previous quarter.
However, in the downstream sector, the outlook is positive with
refining margin projected to increase in the U.S. West Coast.
The company's oil and natural gas production averaged 2.564
million oil-equivalent barrels per day, down 3.9% from the
fourth-quarter 2012 level. The decrease was due to the fall in
both domestic and international production. Production also
witnessed a nominal sequential decrease of 0.8%.
In the first two months of the December quarter, Chevron's total
domestic production was 650,000 barrels of oil equivalent per day
(BOE/D) as compared to 655,000 BOE/D in the previous quarter. The
decrease was owing to planned shutdown activities in the Gulf of
Net international oil equivalent production - at 1,914,000 BOE/D
- was 16,000 barrels per day less than the third quarter of 2013.
Australia's maintenance work and shutdown activities at Angola's
liquefied natural gas (LNG) facility affected the result.
The U.S. crude price realizations during Oct-Nov 2013 averaged
$90.17 per barrel, down from $97.18 in third-quarter 2013, while
international realizations decreased by $4.74 to $99.55 per
barrel. Chevron's domestic realized natural gas prices for this
period averaged $3.28 per thousand cubic feet (Mcf) compared with
$3.23 in the third quarter of 2013. However, average
international natural gas realizations were down 20 cents per Mcf
Regarding downstream operations, the second-largest U.S. oil
company by market value after
Exxon Mobil Corp.
), said that its domestic refinery crude input rose 27,000
barrels per day from the previous quarter. The restart of the El
Segundo, California-based refinery aided the result.
Refinery crude input volumes outside the U.S. were, however, down
(by 9,000 barrels per day) during the same period.
The fourth-quarter refining margins increased by $1.46 per barrel
sequentially in the U.S. West Coast. However, it decreased by 67
cents per barrel in the Gulf Coast.
Fourth Quarter Estimate
Chevron plans to release its quarterly results on Jan 31, 2014,
before the opening bell. The Zacks Consensus Estimate for
Chevron's fourth-quarter is $2.88 per share.
Chevron currently retains a Zacks Rank #3 (Hold), implying that
it is expected to perform in line with the broader U.S. equity
market over the next one to three months.
Meanwhile, one can look at better-ranked players in the oil and
gas integrated industry like
). YPF sports a Zacks Rank #1 (Strong Buy) while OMV holds a
Zacks Rank #2 (Buy).