Chevron Issues Interim Update for First Quarter of 2011 (CVX)

Chevron Corporation (NYSE: CVX) today reported in its interim update that earnings for the first quarter 2011 are expected to be higher than in the fourth quarter 2010.

U.S. net oil-equivalent production was lower during the first two months of the first quarter, decreasing by 12,000 barrels per day compared with the fourth quarter 2010 average, reflecting small declines across multiple assets. International net oil-equivalent production declined 26,000 barrels per day during the first two months of the first quarter. An increase in crude oil prices during this period reduced the company's production under cost-recovery and variable-royalty provisions on certain international production contracts. Maintenance activity in Angola and weather-related downtime in Australia and the United Kingdom also adversely impacted production.

U.S. crude oil realizations increased $8.67 to $88.23 per barrel during the first two months of the first quarter. International liquids realizations improved by $12.24 to $91.33 per barrel, with the earnings benefit from higher realizations partly offset by lower liftings. U.S. and international natural gas realizations increased $0.50 and $0.15 per thousand cubic feet, respectively.

For the full first quarter, worldwide refining margins improved compared with fourth quarter 2010, with the exception of N.W. Europe. Marketing margins were mixed, while chemical indicator margins improved between periods.

During the first two months of the first quarter, U.S. refinery crude-input volumes decreased 6,000 barrels per day due to maintenance activities at mulitple refineries. Outside the United States, refinery crude-input volumes were in-line with fourth quarter 2010 results.

Downstream earnings in the first quarter are expected to be negatively impacted by mark-to-market effects on open derivative contracts tied to underlying physical positions.