Chevron reported a $ 8.3 billion loss in the second quarter after the coronavirus pandemic “significantly reduced demand.” Amid a historic drop in oil prices, the company average price for barrels of oil and liquefied natural gas fell more than 60% year-on-year.
The oil giant lost $ 1.59 per share on a regulated basis, while revenue reached $ 13.49 billion. In the same quarter a year ago, the company earned $ 2.27 per share in revenue of $ 36.32 billion.
Analysts expected the company to post a loss of 92 cents per share, to $ 22.097 billion in revenue, according to Refinitiv estimates.
Part of the company’s loss came from a $ 1.8 billion write-up largely linked to a downward revision in terms of the company’s commodity prices. The company also completely undermined its $ 2.6 billion investment in Venezuela and reported $ 780 million in expenses related to job cuts.
Shares of Chevron fell more than 2% during the money trading on Friday.
“Recent months have presented unique challenges,” said Michael Wirth, CEO of Chevron, in a statement. “The economic impact of responding to COVID-19 significantly reduced demand for our products and lowered commodity prices. Given the uncertainties associated with economic recovery, and abundant oil and gas supplies, we conducted a downward revision of our outlook. commodity prices, “he added.
The company said that while demand and prices have begun to show signs of recovery, they have not returned to pre-forecast levels. Given the uncertain outlook, Chevon said the results could be depressed in the next quarter as well.
During the second quarter, the company’s average selling price for barrels of oil and natural gas liquefied U.S. was $ 19, up from $ 52 a year earlier. Natural gas prices rose to $ 0.81 per thousand cubic meters, from $ 0.68 in the same quarter a year ago.
“We are focused on what we can control. Our stocks are driven by our values and our long-term financial advantages: protecting dividends, investing in long-term values and maintaining a strong balance sheet,” Wirth added.
Earlier in July, Chevron announced it would buy independent oil and gas producer Noble Energy, in a move that Chevron CEO Michael Wirth said would be a “good deal” for shareholders in both companies. Including the debt, the total value of the deal was $ 13 billion.
The acquisition would improve Chevron’s portfolio in the Permian oil-rich basin, as well as in DJ Basin, Colorado. Noble Energy also has assets in Israel and West Africa, which will further improve Chevron’s international footprint. It will also lead to about $ 300 million in annual cost savings, Chevron said in a statement.
The deal was the biggest 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 one-time favored items, and $ 31.5 billion in earnings, helped by downstream margins and output growth in Përmet Basin.
Chevron shares have fallen 28% this year.
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