Nov 1 Refining weakness led to a surprise
decline in Chevron Corp's quarterly profit, and oil and
gas well output increased but remained below target, sending the
company's shares down 2 percent.
Capital spending is running ahead of budget, while
production is short of expectations due to a slow ramp-up of gas
exports from Angola and damage to a customer's gas facility in
Thailand from a lightning strike, the No. 2 U.S. oil company
said on Friday.
But a bounceback in fourth-quarter oil and gas output would
lead to Chevron producing between 98 percent and 99 percent of
its 2013 forecast of 2.65 million barrels of oil equivalent per
day (bpd), a company spokesman told analysts on a conference
U.S. refineries have been squeezed in the past year by a
sharp reduction of the feedstock discount they had enjoyed from
relatively cheaper U.S. crude oil, although that spread has
started widening again over the past month.
Downstream difficulties were shared widely, with Chevron's
larger rival Exxon Mobil Corp reporting lower earnings
on Thursday despite increased oil and gas output.
Some investors have been clamoring for more returns of
capital from the world's biggest oil companies.
Chevron Chief Financial Officer Pat Yarrington reiterated
that capital spending would flatten out once the company's huge
Australian liquefied natural gas projects are out of the way,
giving management more flexibility with cash.
"At the same time though, we do fundamentally believe our
greatest value proposition for shareholders is finding and
investing in the right resources and developing the right
projects, so we will continue to invest in the business," she
Chevron's third-quarter net income fell to $4.95 billion, or
$2.57 per share, from $5.25 billion, or $2.69 per share, a year
earlier. Analysts, on average, had expected $2.71 per share,
according to Thomson Reuters I/B/E/S.
Earnings from its downstream arm, which includes refineries
and chemical production, fell 45 percent to $380 million.
As for upstream, the company produced 2.59 million bpd in
the quarter, up from 2.52 million bpd a year earlier.
Output is expected to grow 25 percent by 2017, boosted by
Australian LNG. But the cost of those projects pushed Chevron's
capital budget up by $7 billion in two years to $36.7 billion
for 2013, and Yarrington said spending this year would be about
10 percent higher than that due to acreage acquisitions.
Chevron shares were down 2.3 percent at $117.20 in midday
trading on the New York Stock Exchange. The stock has
outperformed Exxon in 2013, rising 11 percent, compared with 4
percent for the sector leader.