Chevron posts Q4 losses as oil plunges

OREANDA-NEWS. February 02, 2016. Chevron posted a net loss in the fourth quarter as steep losses in its US upstream business more than wiped out the income made by the non-US business.

"We are taking significant action to improve earnings and cash in this low price environment," chief executive John Watson said in a statement. "Our 2015 earnings were down significantly from the previous year, reflecting a nearly 50pc year-on-year decline in oil prices."

The major's US upstream operations posted a loss of \\$1.95bn in the fourth quarter versus an income of \\$432mn a year earlier, and a loss of \\$4.06bn for the full year compared with an income of \\$3.33bn a year earlier. Non-US upstream operations posted an income of \\$593mn in the fourth quarter, down 74pc from the year earlier level of \\$2.24bn. For the full year, non-US upstream income fell by 85pc to \\$2.09bn versus \\$13.57bn a year earlier.

That resulted in a total upstream business loss of \\$1.36bn in the fourth quarter versus an income of \\$2.67bn a year earlier. For the full year, the losses were \\$1.96bn compared with an income of \\$16.89bn a year earlier.

To cope with the fall in prices and to stem losses, the major reduced its capital expenditure (capex) and operating expenses. Capex in 2015 fell by 16pc to \\$34bn compared with \\$40.3bn a year earlier.

Operating and general and administrative (G&A) expenses fell to \\$7.27bn in the fourth quarter from \\$7.94bn a year earlier. For the full year, they fell to \\$27.48bn from \\$29.78bn a year earlier.

Its average US sale price for crude oil fell to \\$35/bl in fourth quarter from \\$66/bl a year ago. The non-US average sale price fell to \\$39/bl from \\$68/bl a year earlier.

Net US output rose by 7pc from a year earlier to 719,000 b/d of oil equivalent (boe/d) in the fourth quarter. Output increases due to project ramp-ups in the US Gulf of Mexico (GoM) and the Permian Basin in Texas and New Mexico were partially offset by normal field declines and due to asset sales.

Non-US net output rose by 2pc from a year earlier to 1.95mn boe/d as gains in output in Bangladesh were partially offset by the continued shut-in of its Wafra project in the Neutral Zone between Saudi Arabia and Kuwait.

The major's downstream business saw fourth quarter income fall to \\$1.01bn from \\$1.52bn. But for the full year, they gained to \\$7.6bn from \\$4.34bn a year earlier.

As of the end of the year, the major's cash and cash equivalent fell by \\$1.9bn from a year earlier to \\$11.3bn. Cash flow from operations fell to \\$19.5bn for the year from \\$31.5bn a year earlier. Total debt as of 31 December increased by \\$10.8bn from a year earlier to \\$38.6bn.

The major posted a net loss of \\$588mn in the fourth quarter compared with an income of \\$3.47bn a year earlier.