Chevron lost $ 8.3 billion in the second quarter as a coronavirus pandemic “significantly reduced demand.” With the historical decline in oil prices, the company’s average price per barrel of oil and natural gas fell by more than 60% year on year.
The oil giant on a revised basis lost $ 1.59 a share, while revenue reached $ 13.49 billion. In the same quarter a year ago, the company earned $ 2.27 per share with revenue of $ 36.32 billion.
According to Refinitiv estimates, analysts expected the company to record a loss of 92 cents per share with revenue of $ 22.097 billion.
Part of the company̵7;s loss came from a decrease in value of $ 1.8 billion, which was mainly related to the downward revision of the commodity price outlook. The company also completely devalued its $ 2.6 billion investment in Venezuela and reported $ 780 million in job cuts.
Shares of Chevron traded more than 2% premarketing on Friday.
“Recent months have posed unique challenges,” said Chevron CEO Michael Wirth in a statement. “The economic impact of the response to COVID-19 has significantly reduced demand for our products and reduced commodity prices. Given the uncertainties associated with the economic recovery and the large volume of oil and gas supplies, we have made a downward revision regarding the outlook for commodity prices, “he said. added.
The company said that while demand and prices began to show signs of recovery, they are not back to pre-pandemic levels. Given the uncertain outlook, Chevon said results could decline in the next quarter.
During the second quarter, the company’s average selling price per barrel of oil and gas in the United States was $ 19, up from $ 52 a year earlier. Gas prices rose to $ 0.81 per thousand cubic meters, an increase of $ 0.68 in the same quarter last year.
“We focus 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 Noble Energy, an independent oil and gas producer, while Chevron CEO Michael Wirth said it would be a “good deal” for the company’s shareholders. Including debt, the total value of the deal was $ 13 billion.
The acquisition would strengthen Chevron’s portfolio in the oil-rich Permian Basin as well as the DJ Basin in Colorado. Noble Energy also has assets in Israel and West Africa, further strengthening Chevron’s international footprint. This will also lead to annual cost savings of around $ 300 million, Chevron said in a statement.
The agreement was the largest in the sector, as 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 benefits, and revenue of $ 31.5 billion, supported by lower margins and increased production in the Perm Basin.
Chevron shares are 28% lower this year.
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