Chevron earnings slump in Q1, but cash flow surges
US energy company Chevron said April 30 it recorded a year-on-year drop in earnings in Q1 2021. But it boasted $3.4bn in free cash flow, versus $2.7bn a year earlier. Results were supported by assets from the October acquisition of Noble Energy, which operates gas fields in the eastern Mediterranean; but offset by the February storm and the sale of some of its operations in the Appalachia shale basin.
Earnings in Q1 came in at $1.4bn, compared with $3.6bn during the same period last year. CEO Mike Wirth said the downturn was attributable to the winter storm in February that idled large parts of the US energy sector, as well as the lingering strains from the pandemic.
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Crude oil through its US refining segment was down 9% from year-ago levels to 881,000 b/d, while refined product sales of 1.05mn b/d were also down 9% y/y, primarily due to the pandemic-driven decline in demand.
Chevron's exploration and production activity in the US improved to $941mn in Q1 earnings, however, compared with the year-earlier level of $241mn, driven primarily by higher crude oil and natural gas realisations. It recorded net oil-equivalent production of 1.08mn b/d in Q1, up just 11,000 b/d from the same time last year. Net natural gas production from the US averaged 1.64bn ft3/d, up 5% from year-ago levels.
Internationally, net oil-equivalent production was down 6% from the year-ago level to average 2.05mn b/d, driven in part by the lack of production from Venezuela. International natural gas production increased 1% from year-ago levels to average 6.13bn ft3/d.
As with other major oil and gas companies, Chevron is accelerating down the energy transition pathway, investing in green ammonia, hydrogen, biofuels, geothermal energy and offshore wind.
“We took action to advance a lower-carbon future by announcing plans with partners to develop carbon-negative bioenergy and commercially viable, large-scale businesses in hydrogen,” Wirth added. Chevron said April 21 it was teaming up with the North American division of Toyota to explore the use of hydrogen in the transportation sector.