Chevron reported a $ 8.3 billion loss 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 liquid natural gas fell more than 60% year-over-year.
The oil giant lost $ 1.59 per share on a tight basis, while revenue amounted to $ 13.49 million. In the same quarter a year ago, the company earned $ 2.27 per share in revenue of $ 36.32 million.
Analysts had expected the company to post a loss of 92 cents per share, for revenue of $ 22.097 billion, according to Refinitiv estimates.
Part of the company’s loss came as a result of a $ 1.8 billion write-down, mainly associated with a downward revision in the company’s commodity prices. The company also deteriorated its $ 2.6 billion investment in Venezuela and reported $ 780 million in expenses related to the job reduction.
Chevron shares fell more than 2% during pre-trade trading on Friday.
“The last few months have presented unique challenges,” Michael Wirth, CEO of Chevron, said in a statement. “The economic impact of the response to COVID-19 significantly reduced demand for our products and decreased commodity prices. Given the uncertainties related to the economic recovery and broad oil and gas supplies, we did a downward revision of our commodity price outlook, ”he said. added.
The company said that although demand and prices have begun to show signs of recovery, they are no longer returning to pre-pandemic levels. Faced with uncertain prospects, Chevon said the results could also depress next quarter.
During the second quarter, the company’s average selling price per barrel of oil and natural gas liquids in the U.S. was $ 19, down from $ 52 a year earlier. Natural gas prices rose to $ 0.81 per thousand cubic feet, to $ 0.68 in the same quarter last year.
“We are focused on what we can control. Our actions are guided by our values and our long-term financial priorities: protecting the dividend, investing in long-term value, and maintaining a strong balance sheet,” Wirth added.
In early July, Chevron announced that it would buy an independent oil and gas producer from Noble Energy, to the extent that Chevron CEO Michael Wirth said it would be a “good deal” for the two companies’ shareholders. . Including debt, the total value of the deal was $ 13 billion.
The acquisition will improve 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 mean annual cost savings of around $ 300 million, Chevron said in a statement.
The deal was the largest in the industry, as oil prices fell 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 favorable items at the same time, and revenue of $ 31.5 billion, helped by declining margins and the increase of production in the Permian basin.
Chevron shares have fallen 28% this year.
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