Hope springs eternal. But sometimes, you can't beat the
trend.
That's what
Chevron (NYSE: CVX) found out as it reported
earnings late last week. Like
ExxonMobil (NYSE: XOM),
ConocoPhillips (NYSE: COP), and
Royal Dutch Shell (NYSE: RDS-A), Chevron saw
its revenue and profits take a solid beating from an energy
market that looks nothing like it did last year.
But before you conclude that Chevron had nothing new to
add to the energy mix,
take a closer lookat the company. The company's
presentation seemed more upbeat to me than the others, with
the
possible exceptionof
BP (NYSE: BP).
Chevron reported earnings of $3.83 billion, or $1.92 per
share, versus the year-ago $7.89 billion, or $3.85 per share.
Its net oil-equivalent production was an impressive 11% more
than the third quarter of 2008.
There were some one-time items in the earnings, but for
the most part, the drop came from two factors. In the
upstream segment, lower commodity prices cut earnings, even
in the face of higher production. The downstream segment was
clobbered -- especially in the U.S. -- by reduced demand and
skinnier margins. Sales slid from $76 billion last year to
$45 billion in the most recent quarter.
But in my opinion, the most helpful part of the company's
entire release process was CEO Dave O'Reilly's recap of
several of the meaningful projects his company has in the
works. I'll mention just a few, in his words:
Total (NYSE: TOT) and
Eni (NYSE: E) on the project.
"We also announced three natural gas discoveries this
quarter in Camarvon Basin offshore western Australia."
"Our upstream major capital projects continue their
strong performance. The offshore Nigeria Agbami project
reached capacity of 250,000 barrels a day in August 2009.
This was over four months ahead of schedule."
"In Australia, we announced a final investment decision
for (its massive LNG project)
Gorgon. We expect Gorgon to add to our reserves and
provide stable and steady production for decades to come.
The project has around 40 trillion cubic feet of resources,
which is equivalent to about 6.7 billion barrels of
oil."
Whether December's results will improve on higher crude
prices or continue to be held in check by weak natural gas
prices and slim refinery margins is open to debate. In the
meantime, Chevron is doing some awfully good work around the
world. I'd suggest you pay attention to this second-largest
U.S. oil company and the
strength it's exhibiting.
What do you think of the future of Big Oil? Why not let me
know by responding with a comment in the space below?
This article was originally published as
Busy Chevron Makes Global Trackson
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