Chevron Corp. on Friday said net income plunged in 3Q2012 by one-third from a year ago on lower production and lower sales prices.

The San Ramon, CA-based producer, the second largest oil and gas operator in the United States, earned $5.25 billion net ($2.69/share) versus $7.83 billion ($3.92) in 3Q2011. Revenue dropped to $55.66 billion from $61.26 billion.

Chevron’s U.S. production of 637,000 boe/d net in the quarter was down 25,000 boe/d, or 4%, from a year earlier. The decrease was associated with normal field declines, an absence of volumes associated with Cook Inlet, AK, assets sold in 2011, and the effects of storm-related shut-ins from Hurricane Isaac in the Gulf of Mexico (GOM). Partially offsetting this decrease was further ramp-up at its Perdido and Caesar/Tonga projects in the GOM.

U.S. natural gas production fell 6% to 1.18 Bcf/d net in 3Q2012, while the liquids component declined by 440,000 boe/d net. Total global production was off 3% year/year to 2.52 million boe/d. Production in the final three months of this year is expected to be higher, which would reflect completed maintenance and restoring GOM operations.

“This quarter’s earnings were solid but off from their near-record level of a year ago,” said CEO John Watson. “Crude oil prices were down and we had a heavy period of planned oilfield maintenance, which temporarily reduced oil and gas production in several locations. Foreign currency movements also hurt our results this quarter, while they benefited the year-ago period.”

However, the CEO said Chevron was continuing “to progress” several upstream projects. The Gorgon liquefied natural gas (LNG) development in Australia, along with deepwater GOM projects at Bigfoot and Jack/St. Malo “are all over 50% complete. The Wheatstone [LNG] project in Australia is also off to a good start. Each of these projects is expected to deliver significant future value for our shareholders.”

In the latest quarter Watson noted that Chevron agreed to acquire from Chesapeake Energy Corp. more acreage in New Mexico’s Delaware Basin, where it already is one of the largest leaseholders (see related story; Daily GPI, Sept. 17).

U.S. upstream earnings of $1.12 billion in 3Q2012 were down $386 million from a year earlier, primarily because of lower crude oil and natural gas realizations, as well as lower production.

Chevron’s realized U.S. natural gas prices averaged $2.63/Mcf in 3Q2012, versus $4.14 in 3Q2011. U.S. oil and natural gas liquids prices averaged $91/bbl, compared with $97. Outside of the United States, Chevron’s natural gas sold for about $6.03/Mcf, up from $5.50 a year ago, while oil and natural gas liquids prices fell to average $98/bbl from $103.

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