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In its interim update, the San Ramon, California-based company also said it expects its second quarter upstream earnings to benefit from an increase in crude oil prices, largely offset by substantial unfavorable foreign currency effects, as compared to the previous quarter.
Chevron said total U.S. oil-equivalent production during the first two months of the second quarter increased 11,000 barrels per day mainly due to activities in the Gulf of Mexico that included ongoing restoration of operations damaged by hurricanes last September and the ramp-up of production at Blind Faith.
International oil-equivalent production during April and May fell 13,000 barrels per day from the previous quarter. The liquids component of oil-equivalent production decreased 4,000 barrels per day, while natural gas production decreased about 60 million cubic feet per day.
U.S. crude-oil realizations for the first two months of the second quarter increased 32% from the prior quarter but dropped 57% from a year earlier to $48.79 a barrel. International liquids realizations increased 24% from the prior quarter but fell 56% from last year to $48.83 a barrel.
U.S. natural-gas realizations decreased 21% from the first quarter and 67% from a year ago to $3.26 per thousand cubic feet, while average international natural-gas realizations fell 14% from the fourth quarter and 33% from a year earlier to $3.64 per thousand cubic feet.
Crude for May delivery settled Thursday at $60.41 a barrel on the New York Mercantile Exchange, well below the $147 record seen in July but above the $33 seen in December.
Additionally, Chevron said international upstream results for the first two months of the second quarter included unfavorable foreign currency effects of more than $400 million resulting from the weakening of the U.S. Dollar against most other major currencies, a trend that continued in June. The company also said it expects the international upstream segment to reflect charges of about $100 million related to well write-offs in the quarter.
Chevron said U.S. refinery crude-input volumes during the first two months of the second quarter were essentially unchanged with the first quarter level. International refinery crude-input volumes fell 32,000 barrels per day, or about 3%, mainly due to planned maintenance at refineries in South Korea and Singapore.
The company said U.S. refining margins for the full second quarter were down sharply, more than offsetting an increase in marketing margins, while international refining margins were mixed.
The company said it expects second quarter earnings to include gains of roughly $150 million from the sales of marketing businesses in Kenya and Cameroon, which is $250 million less than asset sales gains recorded in the first quarter.
The company said it expects second quarter after-tax charges for corporate and other activities to be below the normal guidance of $250 million to $350 million.
Chevron did not provide any specific earnings guidance for the second quarter. Analysts polled by Thomson Reuters currently expect the company to earn $1.28 per share on revenue of $37.93 billion for the second quarter. Both the figures are substantially below the company's actual results in the second quarter of last year.
Chevron is scheduled to release complete second quarter results on July 31.
Earlier this week, ConocoPhillips (COP | Quote | Chart | News | PowerRating), the third largest U.S. oil company, said it expects to report higher production for the second quarter as compared to a year earlier. The company also said it expects refining and marketing results for the second quarter to be impacted by significantly compressed light-heavy crude differentials, low worldwide distillate margins and the impact of inventory levels.
Chevron shares, which have traded in a range of $55.50 to $96.79, closed Thursday's regular trading session at $63.08, up 30 cents but lost $1.13 or 1.79% in after hours trading.
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