Chevron Corporation (NYSE: CVX) today reported earnings of $5.3 billion ($2.64 per share - diluted) for the fourth quarter 2010, compared with $3.1 billion ($1.53 per share - diluted) in the 2009 fourth quarter. Results in the 2010 period included gains of nearly $400 million from downstream asset sales. Foreign currency effects decreased earnings in the 2010 quarter by $99 million, compared with a decrease of $67 million a year earlier.
Full-year 2010 earnings were $19.0 billion ($9.48 per share - diluted), up from $10.5 billion ($5.24 per share - diluted) in 2009.
Sales and other operating revenues in the fourth quarter 2010 were $52 billion, up from $48 billion in the year-ago period mainly due to higher prices for crude oil and refined products.
Earnings Summary
Fourth Quarter Year
Millions of dollars 2010 2009 2010 2009
Earnings by Business Segment
Upstream $4,847 $4,161 $17,677 $10,932
Downstream 742 (673 ) 2,478 473
All Other (294 ) (418 ) (1,131 ) (922 )
Total (1)(2)(3) $5,295 $3,070 $19,024 $10,483
(1) Includes foreign currency effects $(99 ) $(67 ) $(423 ) $(744 )
(2) Net income attributable to Chevron Corporation (See Attachment 1)
(3) Prior period information conformed to 2010 presentation of Business Segments.
"Financially and operationally, 2010 was an outstanding year," said Chairman and CEO John Watson. "Earnings and cash flow increased significantly in 2010 as a result of higher prices for crude oil, higher net oil-equivalent production and improved refined product sales margins. Our financial strength enabled us to invest in our attractive development projects and acquire several new resource opportunities. At the same time, we increased the annual dividend on our common shares for the 23rd consecutive year and resumed our common stock repurchase program. From an operating perspective, safety results were world-class, net oil-equivalent production for the year came in above target, and refinery reliability was strong."
Watson continued, "During the fourth quarter, we announced the acquisition of Atlas Energy, Inc., which will provide Chevron with an attractive natural gas position, primarily located in southwestern Pennsylvania's Marcellus Shale. We look forward to the results from the Atlas stockholders' meeting on February 16 and are very pleased with the talented people and assets that this acquisition will bring."
Recent upstream achievements include:
* United States - Sanctioned development of the Big Foot project in the deepwater Gulf of Mexico. Big Foot will be the company's sixth operated facility in the deepwater Gulf. Chevron has a 60 percent working interest in the project.
* Australia - Signed an additional binding Sales and Purchase Agreement with an Asian customer for Gorgon liquefied natural gas.
* Indonesia - Awarded front-end engineering and design contracts for the deepwater Gendalo-Gehem natural gas development in the Makassar Strait, offshore East Kalimantan.
* Kazakhstan/Russia - Reached agreement with the other shareholders and governing bodies of the Caspian Pipeline Consortium for expansion of the Caspian pipeline. The 935-mile pipeline carries crude oil from Western Kazakhstan to a dedicated terminal on the Black Sea in Russia.
* Republic of the Congo - Confirmed discoveries at the Bilondo Marine 2 and 3 wells within the Moho-Bilondo license. Chevron has a 31.5 percent interest in the permit area.
Watson commented that the company added approximately 240 million barrels of net oil-equivalent reserves in 2010. These additions, which are subject to final reviews, equate to 24 percent of net oil-equivalent production for the year. Included in the net additions is a 140 million barrel unfavorable effect of higher crude oil prices on certain production-sharing and variable-royalty contracts. Watson added, "We took several major deepwater projects to final investment decision in 2010, and we expect to recognize reserves for these projects in future years, consistent with Securities and Exchange Commission (SEC) rules." The company will provide additional details relating to 2010 reserve additions in its Annual Report on Form 10-K scheduled for filing with the SEC on February 24.
"In the downstream business, we successfully completed the first year of a multiyear plan to improve returns," Watson added. Efforts continued on streamlining the asset portfolio with completion of the sale of marketing businesses in three countries in southeast Africa. The company also announced an agreement to sell its fuel marketing and aviation businesses in 15 countries in the Caribbean and Central America, with closing of the transactions expected by the third quarter 2011, following receipt of required local regulatory and government approvals.
Also in the fourth quarter, the company commissioned a new continuous catalytic reformer at its Pascagoula, Mississippi refinery and announced plans to construct a 53,000-barrel-per-day heavy oil fluid catalytic cracker at the 50 percent-owned GS Caltex Yeosu Refinery in South Korea. The company's 50 percent-owned Chevron Phillips Chemical Company LLC started up polyethylene and normal alpha olefins plants at its 49 percent-owned Q-Chem II Project in Mesaieed, Qatar and announced plans to construct a 1-hexene plant capable of producing in excess of 440 million pounds per year at its Cedar Bayou Facility in Baytown, Texas.
The company purchased $750 million of its common stock in the fourth quarter 2010 under the stock repurchase program announced earlier in the year. At the end of the year, balances of cash, cash equivalents, time deposits and marketable securities totaled $17.1 billion, up over $8 billion from the end of 2009. Total debt at December 31, 2010 stood at $11.5 billion, up $1.0 billion from a year earlier.
28 January 2011 , 10:00648
