10 April 2014, News Wires – US supermajor Chevron expects its first quarter earnings to fall from fourth-quarter levels due to impairments and foreign exchange losses, according to its interim quarterly update.
The first two months of 2014 showed hits from “adverse foreign exchange effects” and selected asset impairments, Chevron said.
“Absent these impacts, first quarter 2014 earnings are expected to be comparable with the prior quarter’s results,” the California-based company said.
Chevron reported net income in the three months to December last year of $4.93 billion, or $2.57 per share. That represented more than a 30% drop from a year earlier.
Upstream downtime caused, in part, by weather in early 2014 has affected production so far this year “across multiple regions” including Kazakhstan, Canada, and the US.
But higher demand in Thailand and increased production at the company’s LNG facility in Angola have offset some of that decline.
Chevron produced 637,000 barrels of oil equivalent per day in the US in 2014 through February, down from 650,000 in the fourth quarter.
Internationally, production came to 1.94 million boepd, up slightly from the 1.93 million boepd produced in the previous quarter.
The company took an impairment of between $400 million and $500 million in the first two months of the year, a loss it chalked up to “primarily mining” and “various upstream assets”.
The foreign exchange hit resulted in an approximate $100 million loss.
Downstream earnings were also expected to be lower in the first quarter.