UPDATE 2-Chevron sees Q1 earnings up despite weaker output

Tue Apr 10, 2012 6:51pm EDT

* Jan-Feb output 2.63 mln bpd, vs 2.68 mln 2012 estimate

* Refining margins up sharply, West Coast figure at 3-yr high

* Chevron reports earnings on April 27

By Braden Reddall

April 10 (Reuters) - Chevron Corp forecast a rise in first-quarter profits from the previous quarter as higher oil prices and refining margins offset lower U.S. production and the impact of a shutdown in Brazil.

Analysts, on average, estimate net income of $6.3 billion, or $3.14 per share, according to Thomson Reuters I/B/E/S. This compared with $6.2 billion a year before and $5.1 billion in the fourth quarter.

The impact of the shut-in at the Frade field off Brazil last month, which followed leaks there and a huge legal dispute, would average 5,000 barrels per day for the quarter, Chevron said, while the ongoing impact is 33,000 bpd.

"At this time, a production restart date is not available," the second-largest U.S. oil company said in its interim quarterly update on Tuesday. "However, the company's 2012 production guidance remains unchanged."

In total, Chevron produced the oil equivalent of nearly 2.63 million bpd in the first two months of the quarter, down from an average of 2.64 million in all of the fourth quarter and below its 2012 forecast of 2.68 million bpd.

Shares of Chevron rose 0.5 percent in extended trading, after closing 2 percent lower at $101.45 as oil prices and the sector fell on Tuesday.

Chevron's international production was 1.98 million bpd in January and February, unchanged from the fourth-quarter average. U.S. output in those two months was 644,000 bpd, versus 661,000 in the fourth quarter, reflecting a year-end sale of mostly natural gas interests in Alaska.

"If you're going to reduce production in North America, it's good to do it in gas," said Brian Youngberg, an Edward Jones analyst who recommends buying Chevron shares but does not own any.

In refining, Chevron said U.S. margins rose sharply from the three months before, citing industry figures showing Gulf Coast margins up nearly $9 per barrel at $20.56, while West Coast margins rose $5 per barrel to a 3-year high of $19.64.

The San Ramon, California-based company also said total net charges for the first quarter would be at the high end of its new general forecast range of $300 million to $400 million when it reports earnings on April 27.

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