Near-record oil prices sustained the bottom line for most of the majors in 2Q2007, but the profits didn’t translate into gains in North American natural gas production for Chevron Corp. or Royal Dutch Shell plc.
Chevron delivered a 24% rise in quarterly profit on Friday, with earnings reaching $5.38 billion ($2.52/share) from $4.35 billion ($1.97) in 2Q2006. However, the San Ramon, CA-based producer’s global oil and gas output dropped 1% to 2.63 million boe/d, partly the result of lower U.S. production, CEO Dave O’Reilly told energy analysts.
U.S. upstream income jumped to $1.22 billion from $901 million, but Chevron’s domestic gas output fell 7% to 1.703 Bcf/d from 1.832 Bcf/d. O’Reilly said the company’s oil and gas production worldwide will most likely be flat through the rest of this year.
“In the second half of the year, there will be some declines here in the United States as the result of normal field declines, particularly in the Gulf of Mexico,” O’Reilly said on a conference call. Several deepwater projects are being assessed, but appraisal wells on the Jack and St. Malo discoveries in the Lower Tertiary won’t be completed before 2008, and any word on when those may progress is months down the line, O’Reilly said.
Chevron’s Henry Hub bidweek prices averaged $7.56/Mcf, up from $6.81, and at the California border, prices averaged $6.85, compared with $5.65 a year ago. In the Rocky Mountains, gas prices averaged $3.72/Mcf, well below the $5.26 that it captured in 2Q2006.
Shell, the world’s second largest oil company behind ExxonMobil Corp., on Thursday reported an 18% surge in its quarterly profit to $8.67 billion ($1.38/share) from $7.32 billion ($1.13) in 2Q2006. Shell spent $916 million on U.S. exploration in 2Q2007, which was down from $985 million for the same period of 2006.
Total crude oil production for Shell rose 1% worldwide. However, the London-based major was unable to deliver an increase in gas output, with the gas available for sale falling 6% to 7.367 Bcf/d from 7.865 Bcf/d in 2Q2006. In the United States, Shell’s gas output fell to 1.09 Bcf/d from 1.175 Bcf/d.
CEO Jeroen van der Veer told analysts that Shell has begun “rejuvenating” its portfolio and plans to “sustain investments in new legacy assets as well as disposals, both upstream and downstream.” Most of its new investments are expected to be made outside of North America.
©Copyright 2007Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.
© 2020 Natural Gas Intelligence. All rights reserved.
ISSN © 1532-1231 | ISSN © 2577-9877 |