For the first quarter, Chevron announced EPS of $ 1.93, which included $ 680 million in one-time favorable items and $ 31.5 billion in revenue, helped by downstream margins and increased production in the Permian. In the same quarter a year earlier, the oil giant had earned $ 1.39 per share for $ 35.20 billion in revenue.
Production in the United States – the second largest oil company rose 6% year over year to a record 3.24 million barrels per day of net oil equivalent production. Chevron said production in the Permian basin has increased 48% year-over-year.
But impatiently, the company said that falling oil prices will have a significant impact. “Financial results for future periods are expected to be depressed as long as current market conditions persist,” the company said in a statement. Chevron said in the first quarter the average price per barrel of crude oil and natural gas liquids was $ 37, about 23% lower than a year earlier, while the selling price of natural gas had gone from $ 1.64 to 60 cents.
Chevron’s shares fell about 2% in Friday’s presale trade.
Energy companies have been forced to cut spending and cut costs following a historic downturn in West Texas Intermediate, the US oil benchmark, which has lost 70% this year. Much of the decline is due to a drop in demand due to the coronavirus.
“We have really seen demand in places we have never seen before, and the market is reflecting it, and supply has been slower to respond to it, so prices reflect the real dramatic impact of the downturn and, in fact, closing economies around the world as we fight the virus, “said CEO Michael Wirth on” Squawk Box “on CNBC on Friday.
But he said demand was likely to bottom in the second quarter and that last week the outlook had started to improve.
“I think that as we start to see things move on and the economies start to pick up, demand will gradually come back,” he said, adding that it will be “a very, very difficult quarter”.
Chevron said on Friday it would cut its 2020 capital spending plans by an additional $ 2 billion to $ 14 billion. In March, the company announced a 20% reduction in its capital spending plan – from $ 20 billion to $ 16 billion – and announced that it was suspending its buyout program to cut costs.
The company once again recalled that its dividend is a priority, and that its action to make it sustainable over the long term.
“Together, these actions are in line with our long-standing financial priorities: protecting the dividend; prioritize the capital that generates long-term value; and maintain a strong balance sheet, “Wirth said in a statement regarding capital spending cuts.
Chevron shares have lost 23% this year.
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