Chevron reported a loss of $ 8.3 billion in the second quarter, as the coronavirus pandemic “significantly reduced demand.” Amid a historic drop in oil prices, the company’s average price per barrel of oil and natural gas liquids fell more than 60% year-over-year.
The oil giant lost $ 1.59 a share on an adjusted basis, while revenue reached $ 13.49 billion. In the same quarter last year, the company earned $ 2.27 a share with $ 36.32 billion in revenue.
Analysts expected the company to post a loss of 92 cents a share, at $ 22.097 billion in revenue, according to Refinitiv estimates.
Part of the company’s loss stemmed from a $ 1.8 billion write-down associated primarily with a downward revision to the company’s commodity price outlook. The company also completely hurt its $ 2.6 billion investment in Venezuela, and reported $ 780 million in expenses related to job cuts.
Chevron shares fell more than 2% during premarket trading on Friday.
“The past few months have presented unique challenges,” said Michael Wirth, Chevron’s CEO, in a statement. “The economic impact of the COVID-19 response significantly reduced demand for our products and lowered commodity prices. Given the uncertainties associated with the economic recovery and ample supplies of oil and gas, we did a downward revision from our outlook on commodity prices. ” additional.
The company said that while demand and prices have begun to show signs of recovery, they have not returned to pre-pandemic levels. Given the uncertain outlook, Chevon said results could also depress next quarter.
During the second quarter, the company’s average sales price per barrel of petroleum and natural gas liquids in the United States was $ 19, down from $ 52 the prior year. Natural gas prices increased to $ 0.81 per thousand cubic feet, up from $ 0.68 in the same quarter of the previous year.
“We are focused on what we can control. Our actions are guided by our values and our long-standing financial priorities: protecting the dividend, investing for a long-term value and maintaining a solid balance sheet,” added Wirth.
In early July, Chevron announced that it would buy from independent oil and gas producer Noble Energy, in a move that Chevron CEO Michael Wirth said would be “good business” for shareholders of both companies. Including the debt, the total value of the agreement was $ 13 billion.
The acquisition would enhance Chevron’s portfolio in the oil-rich Permian Basin as well as the Colorado DJ Basin. Noble Energy also has assets in Israel and West Africa, which will further enhance Chevron’s international footprint. It will also generate about $ 300 million in annual cost savings, Chevron said in a statement.
The deal was the largest in the industry since oil prices plummeted in March and April, hit by a price war between Saudi Arabia and Russia, as well as an unprecedented drop in demand due to the pandemic.
For the first quarter, Chevron reported earnings per share of $ 1.93, which included $ 680 million in one-time favorable items, and $ 31.5 billion in revenue, helped by subsequent margins and increased production in the Permian basin. .
Chevron’s shares fell 28% this year.
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