OREANDA-NEWS. January 16, 2013. Chevron Corporation (NYSE: CVX) reported in its interim update that earnings for the fourth quarter 2012 are expected to be notably higher than third quarter 2012.  Upstream results are projected to be higher between sequential quarters, reflecting increased gains on asset transactions and higher liftings, reported the press-centre of Chevron.

Downstream earnings in the fourth quarter are also expected to be higher, largely reflecting a positive swing in timing effects, despite a sharp decline in industry refining margins.

Basis for Comparison in Interim Update
This interim update contains certain industry and company operating data for the fourth quarter 2012. The production volumes, realizations, margins and certain other items in the report are based on a portion of the quarter and are not necessarily indicative of Chevron's full quarterly results to be reported on February 1, 2013. The reader should not place undue reliance on this data.

Readers are advised that portions of the commentary below compare results for the first two months of the fourth quarter 2012 to full third quarter 2012 results, as indicated.

UPSTREAM
The table that follows includes information on production and price indicators for crude oil and natural gas for specific markets. Actual realizations may vary from indicative pricing due to quality and location differentials and the effect of pricing lags. International earnings reflect actual liftings, which may differ from production due to the timing of cargoes and other factors.

U.S. net oil-equivalent production increased 39,000 barrels per day during the first two months of the fourth quarter, reflecting recovery from the impacts of Hurricane Isaac and an increase in production associated with recently acquired acreage in the Permian Basin. International net oil-equivalent production during the first two months of the fourth quarter increased 107,000 barrels per day, mainly due to the absence of planned maintenance in Kazakhstan and the United Kingdom.

International upstream earnings in the fourth quarter are expected to include a gain of approximately USD 1.4 billion from a previously announced asset exchange in Australia, compared to a gain of USD 600 million in the third quarter associated with the sale of an equity interest in the Wheatstone project.

U.S. crude oil realizations increased USD 0.27, to USD 97.61 per barrel during the first two months of the fourth quarter, consistent with the typical monthly lag on pricing in the Gulf of Mexico. International liquids realizations increased USD 1.86, to  USD 100.06 per barrel. U.S. natural gas realizations increased USD 0.51 to USD 3.14 per - 3 thousand cubic feet, while international natural gas realizations decreased USD 0.09 to USD 5.94 per thousand cubic feet during the first two months of the fourth quarter.

DOWNSTREAM
For the full fourth quarter, U.S. and international refining margins decreased significantly compared to third quarter 2012. International marketing margins also declined, while U.S. marketing margins improved from the previous quarter.

During the first two months of the fourth quarter, U.S. refinery crude-input volumes decreased by 77,000 barrels per day compared to the third quarter, driven primarily by the continued shutdown of the Richmond, California refinery crude unit. A return to normal operations at the Pascagoula, Mississippi refinery post Hurricane Isaac partly offset the decrease. International refinery crude-input volumes increased 9,000 barrels per day compared to the third quarter.

ALL OTHER
The company’s general guidance for the quarterly net after-tax charges related to corporate and other activities is between USD 300 million and USD 400 million. Due to the potential for non-ratable accruals related to income taxes, pension settlements, environmental and other matters, actual results may significantly differ from the guidance range. Total net charges for the fourth quarter are expected to be notably higher than the general guidance range.