Chevron reported a loss of $ 8.3 billion in the second quarter as the coronavirus pandemic “significantly reduced demand.” Against the background of a historic decline in oil prices, the company’s average price per barrel of oil and natural gas fell by more than 60% over the previous year.
The oil giant lost $ 1.59 a share on an adjusted basis, while revenue reached $ 13.49 billion. In the same quarter a year ago, the company earned $ 2.27 per share with $ 36.32 billion in revenue.
Analysts expect the company to report a loss of 92 cents per share on revenue of 22.097 billion dollars, according to estimates by Refinitiv.
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Shares of Chevron slipped more than 2% during trading in the pre-sale market on Friday.
“There have been unique challenges over the last few months,” said Michael Wirth, CEO of Chevron. “The economic impact of the COVID-19 response has significantly reduced demand for our products and lowered commodity prices. Given the uncertainty surrounding the economic recovery and the abundance of oil and gas supplies, we have revised downwards to the commodity price forecast,” he said. added.
The company said that although demand and prices began to show signs of recovery, they were not returning to pre-pandemic levels. Given the uncertain outlook, Chevon said the results could decline in the next quarter.
In the second quarter, the average selling price per barrel of oil and natural gas liquids in the United States was $ 19, which is lower than $ 52 a year earlier. Natural gas prices rose to $ 0.81 per thousand cubic feet, from $ 0.68 in the same quarter a year earlier.
“We are focused on what we can control. Our actions are guided by our values and our long-term financial priorities: to protect the dividend, to invest in long-term value and to maintain a strong balance sheet,” Wirth added.
Earlier in July, Chevron announced it would buy independent oil and gas producer Noble Energy, prompting Chevron CEO Michael Wirth to say it would be a “good deal” for shareholders in the two companies. Including debt, the total value of the deal was $ 13 billion.
The acquisition will enhance Chevron’s portfolio in the Perm oil-rich pool, as well as in Colorado’s DJ Basin. Noble Energy also has assets in Israel and West Africa, which will further strengthen Chevron’s international footprint. That would also result in about $ 300 million in cost savings, a Chevron statement said.
The deal was the biggest in the industry after oil prices fell in March and April, hit by the 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 positions and $ 31.5 billion in revenue, supported by downstream and increased production in the Permian Basin.
Shares of Chevron have fallen 28% this year.
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