• First quarter earnings of $3.6 billion
• Cash flow from operations of $4.7 billion
• Taking actions to protect the dividend, sustain long-term value and preserve cash
• Further reducing 2020 capital expenditure guidance to as low as $14 billion
• Completed asset sales in the Philippines and Azerbaijan

Chevron Corporation reported earnings of $3.6 billion ($1.93 per share - diluted) for first quarter 2020, compared with earnings of $2.6 billion ($1.39 per share - diluted) in the first quarter 2019. Included in the current quarter was a gain of $240 million associated with the sale of upstream assets in the Philippines and favorable tax items totaling $440 million attributable to international upstream. Foreign currency effects increased earnings in the first quarter 2020 by $514 million.

Sales and other operating revenues in first quarter 2020 were $30 billion, compared to $34 billion in the year-ago period.

Cash flow from operations in the first three months of 2020 was $4.7 billion, compared with $5.1 billion in the corresponding 2019 period. Excluding working capital effects, cash flow from operations in first quarter 2020 was $5.8 billion, compared with $6.3 billion in the corresponding 2019 period.

Capital and exploratory expenditures in the first three months of 2020 were $4.4 billion, compared with $4.7 billion in 2019. The amounts included $1.2 billion in 2020 and $1.5 billion in 2019 for the company’s share of expenditures by affiliates, which did not require cash outlays by the company. Expenditures for upstream represented 88 percent of the companywide total in 2020.

“First quarter earnings were up from a year ago,” said Michael K. Wirth, Chevron’s chairman of the board and chief executive officer, “driven by downstream margins and increased Permian production. However, commodity prices fell significantly in March and the weakness continued into the second quarter, primarily due to reduced demand resulting from the COVID-19 pandemic.” Financial results in future periods are expected to be depressed as long as current market conditions persist.

“Chevron is responding to these unprecedented challenges by making changes to what we control, and with a commitment to protect the long-term health and value of the company,” Wirth added. “Our company entered this crisis well positioned with a strong balance sheet, flexible capital program and low breakeven price. These advantages will be important as we respond to challenging market conditions.”

Chevron is further reducing its 2020 capital expenditure guidance by up to $2 billion to $14 billion. In addition, the company estimates that 2020 operating costs will decrease by $1 billion. This follows the previously announced suspension of share repurchases and the completion of additional asset sales.

“Together these actions are consistent with our longstanding financial priorities: to protect the dividend; to prioritize capital that drives long-term value; and to maintain a strong balance sheet,” said Wirth.

“Our primary focus continues to be the safety of our people and operations, and providing the energy essential to everyday life and vital to combat the pandemic. Our products support the efforts of health care providers and first responders around the globe and fuel the transportation that keeps global supply chains moving,” Wirth concluded.

Meanwhile, Chevron's portfolio high-grading continued with the close of asset sales in the Philippines in March and Azerbaijan in April, which together generated over $1.6 billion in proceeds this year.

U.S. Upstream

Worldwide net oil-equivalent production was 3.24 million barrels per day in first quarter 2020, an increase of over 6 percent from a year ago, and a new quarterly record.

U.S. upstream operations earned $241 million in first quarter 2020, compared with earnings of $748 million a year earlier. The decrease was primarily due to lower crude oil and natural gas realizations and higher depreciation expense, partially offset by higher crude oil and natural gas production.

The company’s average sales price per barrel of crude oil and natural gas liquids was $37 in first quarter 2020, down from $48 a year earlier. The average sales price of natural gas was $0.60 per thousand cubic feet in first quarter 2020, down from $1.64 in last year’s first quarter.

Net oil-equivalent production of 1.06 million barrels per day in first quarter 2020 was up 180,000 barrels per day from a year earlier. Production increases from shale and tight properties in the Permian Basin in Texas and New Mexico were partially offset by normal field declines. The net liquids component of oil-equivalent production in first quarter 2020 increased 16 percent to 803,000 barrels per day, while net natural gas production increased 35 percent to 1.56 billion cubic feet per day, compared to last year's first quarter.

First quarter unconventional net oil-equivalent production in the Permian Basin was 580,000 barrels per day, representing growth of 48 percent compared to a year ago.

International Upstream

International upstream operations earned $2.7 billion in first quarter 2020, compared with $2.4 billion a year ago. Foreign currency effects had a favorable impact on earnings of $636 million between periods. Favorable tax items, the gain on the Philippines asset sale and favorable trading effects also contributed to the increase. Partially offsetting these items were lower crude oil and natural gas prices.

The average sales price for crude oil and natural gas liquids in first quarter 2020 was $43 per barrel, down from $58 a year earlier. The average sales price of natural gas was $5.66 per thousand cubic feet in the quarter, compared with $6.57 in last year’s first quarter.

Net oil-equivalent production of 2.17 million barrels per day in first quarter 2020 increased 17,000 barrels per day from first quarter 2019. Increases from production entitlement effects, the absence of first quarter 2019 downtime at Gorgon, and other factors were largely offset by asset sale decreases of 95,000 barrels per day and normal field declines. The net liquids component of oil-equivalent production decreased 2 percent to 1.16 million barrels per day in first quarter 2020, while net natural gas production of 6.05 billion cubic feet per day increased 4 percent, compared to last year's first quarter.

U.S. Downstream

U.S. downstream operations earned $450 million in first quarter 2020, compared with earnings of $217 million a year earlier. The increase was mainly due to higher margins on refined product sales, partially offset by higher operating expenses and lower earnings from the 50 percentowned Chevron Phillips Chemical Company.

Refinery crude oil input in first quarter 2020 increased 12 percent to 965,000 barrels per day from the year-ago period, primarily due to the acquisition of the Pasadena refinery in Texas.

Refined product sales of 1.16 million barrels per day were down 3 percent from first quarter 2019, mainly due to lower jet fuel and diesel sales.

International Downstream

International downstream operations earned $653 million in first quarter 2020, compared with $35 million a year earlier. The increase in earnings was largely due to higher margins on refined product sales, partially offset by higher operating expenses. Foreign currency effects had a favorable impact on earnings of $29 million between periods.

Refinery crude oil input of 635,000 barrels per day in first quarter 2020 decreased 5 percent from the year-ago period.

Refined product sales of 1.27 million barrels per day in first quarter 2020 were down 10 percent from the year-ago period, mainly due to lower jet fuel, diesel and gasoline sales resulting from travel restrictions associated with the COVID-19 pandemic.

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