For those looking for even a small piece of good news in the midst of economic decline, the small profit posted by Chevron Corp. in the final period of 2008 was some relief. Like ExxonMobil Corp. (see related story), Chevron’s natural gas and oil volumes fell because of the continuing impact of hurricanes Gustav and Ike.

The San Ramon, CA-based major reported net income of $4.90 billion ($2.44/share) in 4Q2008, up from $4.88 billion ($2.32/share) in the year-ago period. Results in the last three months of 2008 included a $600 million gain on an upstream asset-exchange transaction. Foreign-currency effects also lifted net income by $478 million in the period, compared with a reduction to earnings of $2 million in 4Q2007.

Sales and other operating revenues in the fourth quarter 2008 were $43 billion, compared with $60 billion a year earlier. For the year 2008, sales and other operating revenues were $265 billion, versus $214 billion in 2007.

“We achieved much success in 2008,” said CEO Dave O’Reilly. “Record earnings and strong cash flows for the year enabled us to invest $23 billion in an attractive portfolio of capital and exploratory projects, buy back $8 billion of our common stock and increase the dividend payment on our common shares for the 21st consecutive year. We enter 2009 with the financial strength to meet the challenges of a difficult economy and with a continued focus on cost management and capital stewardship.”

In the United States production began last year at Chevron’s 75%-owned and operated Blind Faith project in the deepwater Gulf of Mexico (GOM). Total volumes are expected to ramp up in 1Q2009 to around 65,000 b/d of crude and 55 MMcf/d of natural gas. Blind Faith was the third major project completed in the second half of 2008.

Chevron also added 1.34 billion boe of proved reserves in 2008. These additions would equate to 146% of boe production for the year, the company noted. Included in the additions are favorable effects of lower year-end prices on the calculation of reserves associated with production-sharing and variable-royalty contracts.

Net output was 619,000 boe/d in the final period, down 111,000 boe/d from a year earlier. About 75% of the decline was associated with the continuing effects of production that was shut-in as a result of September hurricanes in the GOM. The net liquids component of production was down 12% at 399,000 b/d, and net natural gas production declined 21% to 1.3 Bcf/d.

At the end of 2008, almost 50,000 boe/d of Chevron’s production remained offline in the GOM because of hurricanes Gustav and Ike. Restoration of the volumes, said the producer, will “occur as repairs to third-party pipelines and producing facilities are completed.”

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