May 2, 2014 / 1:10 PM / 4 years ago

UPDATE 2-Crude oil reliance dents Chevron's profit

(Adds unit info, stock price, natural gas data)

By Ernest Scheyder

May 2 (Reuters) - Sliding production and weak crude oil prices hampered Chevron Corp in the first quarter, leading the second-largest U.S. oil producer, to report a profit well below Wall Street’s expectations.

Chevron, unlike other large energy companies, derives a larger portion of its U.S. profit from crude oil than natural gas.

That has generally helped the company the past few years, when natural gas prices sat near 10-year lows. Yet a bitter cold winter in U.S. during the first quarter pushed up natural gas prices roughly 50 percent over the same quarter in 2013, a rally that left Chevron behind and boosted results for rivals Exxon Mobil Corp and ConocoPhillips.

Chevron’s average selling price for two key types of crude oil, meanwhile, fell 4 percent.

The company posted net income of $4.51 billion, or $2.36 per share, compared with $6.18 billion, or $3.18 per share, in the year-ago quarter.

Analysts, though, expected earnings of $2.51 per share, according to Thomson Reuters I/B/E/S.

Globally, Chevron’s production fell 2 percent to 2.59 million barrels of oil equivalent per day (boepd).

The results stood in contrast to Exxon and ConocoPhillips, which on Thursday posted quarterly profits that beat Wall Street’s expectations. Both companies produce more natural gas in the United States than Chevron, and rebounding natural gas prices in the first quarter lifted their respective results.

For example, Chevron produced 1.2 million cubic feet of natural gas per day (mcfd) in the last quarter in the U.S., compared with Exxon’s 3.4 mcfd produced in the country.

Chevron Chief Executive John Watson attributed lower crude oil prices to “global economic factors” and pinned much of the drop in production on bad weather in Kazakhstan, where the company is the largest private oil producer and holds stakes in two oil fields.

Shares of Chevron rose 0.4 percent to $125.39 in Friday morning trading. As of Thursday’s close, the stock had gained about 6 percent in the last six months. (Reporting by Ernest Scheyder; Editing by Sofina Mirza-Reid and Marguerita Choy)

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