Chevron Corp. eclipsed Wall Street earnings expectations during the final three months of 2018, but it was its production report that set the tone, with Australian natural gas exports and Permian Basin production lifting output by 12% year/year.

The double-digit production growth in 4Q2018 to 3.1 million boe/d during 4Q2018 was supported by liquefied natural gas (LNG) from the Wheatstone export project in Australia, as well as surging crude supply from Permian wells. For the full year, Chevron reported record oil and gas production of 2.93 million boe/d, about 7% higher than in 2017.

The San Ramon, CA-based supermajor expects to surpass its production milestones in 2019 with another 4-7% increase, based on $60/bbl Brent oil prices, CEO Mike Wirth said during a conference call Friday.

"We expect positive production trends to continue in the first quarter and throughout 2019," Wirth said. “We reached significant milestones with upstream major capital projects in 2018, including the start-up of Wheatstone Train Two, our fifth operated LNG train in Australia.

“We also continued the ramp-up of the Permian Basin in Texas and New Mexico, started production from the Big Foot Project in the Gulf of Mexico (GOM), and continued to progress our future growth project at the company’s 50%-owned affiliate, Tengizchevroil, in Kazakhstan.”

U.S. net production was 858,000 boe/d in the final period of 2018, an increase of 187,000 boe/d from 4Q2017, padded with shale and tight resource additions in the Permian, as well as the base business in the GOM.

The net liquids component of U.S. production increased 30% in the quarter to 674,000 b/d, while net gas production increased 20% to 1.10 Bcf/d.

The company last year added 1.46 billion boe net of proved reserves, equal to an estimated 136% of net production, with the largest additions from the Permian and the Australian LNG projects.

Downstream project milestones last year included the start-up of a hydrogen train at the Richmond Refinery near Houston, as well as the ramp-up of the ethane cracker at the Chevron Phillips’ Cedar Bayou plant in Baytown east of Houston, Wirth noted. In addition, Chevron expanded a retail marketing network in Mexico to more than 100 service stations.

The year already is stacking up to build on last year’s gains as the supermajor in December said it plans to spend $20 billion in 2019 on development and exploration. The budget is weighted to short-cycle projects, most of which are projected to generate cash within two years.

Profit for the final quarter of 2018 soared almost 20% from 4Q2017 to $3.73 billion ($1.95/share), above analyst expectations. Sales and other operating revenues totaled $40 billion, versus $36 billion in the year-ago period.

Full-year earnings climbed to $14.8 billion ($7.74/share), from $9.2 billion ($4.85) in 2017. Cash flow from operations increased 50% to $30.6 billion.

U.S. upstream operations earned $964 million in 4Q2018, compared with $3.69 billion a year earlier, primarily on the absence of a 4Q2017 $3.33 billion benefit from U.S. tax reform.

Average sales prices for crude oil and natural gas liquids were $56/bbl in 4Q2018, up $6 year/year. Natural gas averaged $2.01/Mcf, versus $1.86 in 4Q2017.