Chevron Corp.’s U.S. net oil-equivalent production dropped by 18,000 boe/d in July and August from the full second quarter of this year in part because of increased maintenance activity across “multiple assets” in the Gulf of Mexico (GOM), the oil major said late Tuesday. However, domestic natural gas production in the two-month period was higher.
The San Ramon, CA-based producer is scheduled to issue full third quarter earnings numbers on Oct. 28. In an interim report, the oil major said profits for the third quarter are expected to be “comparable” with those in the previous quarter.
Chevron, one of the biggest explorers in the GOM, began to turn on the throttle during the second quarter to help recover a “lost year of production” following the deepwater drilling moratorium, Vice Chairman George Kirkland said in late July (see Daily GPI, Aug. 1). The company has several deepwater projects in early stages, including initial development wells at the Jack/St. Malo prospect and at Big Foot.
Lower crude oil realizations and lower liftings are expected to cut into the third quarter upstream earnings, while downstream earnings are expected to be higher, mostly reflecting an asset sale gain. Earnings in both operating segments should benefit from favorable noncash foreign currency effects because of a stronger U.S. dollar in the latest quarter against other major currencies, Chevron said.
In the United States the company’s natural gas production in July and August produced 1,278 MMcf/d, up from 1,255 MMcf/d in the full third quarter of 2010. By comparison, Chevron this year produced 1,299 MMcf/d in the second quarter and 1,270 MMcf/d in the first quarter. U.S. net liquids production reached 463,000 b/d in July and August, versus 478,000 b/d in the second quarter and 482,000 b/d in the first quarter of this year. In the third quarter of 2010 net liquids output was 482,000 b/d.
Chevron’s domestic natural gas price realizations in August and September dropped 19 cents to $4.16/Mcf, while international gas realizations were up 11 cents to $5.60/Mcf. Meanwhile, U.S. crude oil realizations fell almost $8/bbl to $100.87 in July and August from the second quarter. Increased production is forecast for the final three months of this year to reflect completed maintenance issues, planned turnarounds and new output.
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