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Chevron 2008 3Q Earnings Conference Call Presentation (color)

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The document summarizes Chevron's third quarter 2008 earnings conference call. It discusses Chevron's Q3 2008 earnings of $7.9 billion, an update on upstream production including impacts from hurricanes, the status of major capital projects, and other highlights in upstream operations. Representatives from Chevron's executive team presented on topics such as earnings components, production by region, and progress on key projects.

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Third Quarter 2008 Earnings Conference Call and Webcast October 31, 2008 George Kirkland Executive Vice President, Global Upstream & Gas Steve Crowe Vice President and Chief Financial Officer Jim Aleveras General Manager, Investor Relations © 2008 Chevron Corporation. All Rights Reserved.
Cautionary Statement CAUTIONARY STATEMENT RELEVANT TO FORWARD-LOOKING INFORMATION FOR THE PURPOSE OF “SAFE HARBOR” PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 This presentation of Chevron Corporation contains forward-looking statements relating to Chevron’s operations that are based on management’s current expectations, estimates and projections about the petroleum, chemicals and other energy-related industries. Words such as “anticipates,” “expects,” “intends,” “plans,” “targets,” “projects,” “believes,” “seeks,” “schedules,” “estimates,” “budgets” and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and other factors, some of which are beyond our control and are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements. The reader should not place undue reliance on these forward-looking statements, which speak only as of the date of this presentation. Unless legally required, Chevron undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Among the important factors that could cause actual results to differ materially from those in the forward-looking statements are crude- oil and natural-gas prices; refining, marketing and chemicals margins; actions of competitors; timing of exploration expenses; the competitiveness of alternate energy sources or product substitutes; technological developments; the results of operations and financial condition of equity affiliates; the inability or failure of the company’s joint-venture partners to fund their share of operations and development activities; the potential failure to achieve expected net production from existing and future crude-oil and natural-gas development projects; potential delays in the development, construction or start-up of planned projects; the potential disruption or interruption of the company’s net production or manufacturing facilities or delivery/transportation networks due to war, accidents, political events, civil unrest, severe weather or crude-oil production quotas that might be imposed by OPEC (Organization of Petroleum Exporting Countries); the potential liability for remedial actions or assessments under existing or future environmental regulations and litigation; significant investment or product changes under existing or future environmental statutes, regulations and litigation; the potential liability resulting from pending or future litigation; the company’s acquisition or disposition of assets; gains and losses from asset dispositions or impairments; government-mandated sales, divestitures, recapitalizations, industry-specific taxes, changes in fiscal terms or restrictions on scope of company operations; foreign currency movements compared with the U.S. dollar; the effects of changed accounting rules under generally accepted accounting principles promulgated by rule-setting bodies; and the factors set forth under the heading “Risk Factors” on pages 32 and 33 of the company’s 2007 Annual Report on Form 10-K/A. In addition, such statements could be affected by general domestic and international economic and political conditions. Unpredictable or unknown factors not discussed in this report could also have material adverse effects on forward-looking statements. U.S. Securities and Exchange Commission (SEC) rules permit oil and gas companies to disclose only proved reserves in their filings with the SEC. Certain terms, such as “resources,” “undeveloped gas resources,” “oil in place,” “recoverable reserves,” and “recoverable resources,” among others, may be used in this presentation to describe certain oil and gas properties that are not permitted to be used in filings with the SEC. In addition, SEC regulations define oil-sands reserves as mining-related and not a part of conventional oil and gas reserves. 2 © 2008 Chevron Corporation. All Rights Reserved.
Financial Highlights 3Q08 Earnings $7.9 Billion Earnings per Diluted Share $3.85 ROCE 27.4% (trailing 12 months) Capital & Exploratory $5.5 Billion 3Q08 Share Repurchases $2.0 Billion Debt Ratio 7.4% Net Cash $4.0 Billion (Cash less Debt) 3 © 2008 Chevron Corporation. All Rights Reserved.
Chevron Net Income 3Q08 vs. 2Q08 $ Millions Other Downstream 419 Upstream 2,565 -1,066 7,893 5,975 2Q08 Net 3Q08 Net Income Income 4 © 2008 Chevron Corporation. All Rights Reserved.
U.S. Upstream Income 3Q08 vs. 2Q08 $ Millions Realizations Other Volumes September Asset Hurricanes Sales -130 -195 371 -400 350 2,191 2,187 2Q08 3Q08 Income Income 5 © 2008 Chevron Corporation. All Rights Reserved.
International Upstream Income 3Q08 vs. 2Q08 $ Millions Realizations Volumes DD&A -260 & Opex Other -635 -220 53 5,057 3,995 2Q08 3Q08 Income Income 6 © 2008 Chevron Corporation. All Rights Reserved.
(1) Worldwide Oil & Gas Production 3Q08 vs. 2Q08 MBOED U.S. Kazakhstan Nigeria Other -55 -7 23 -55 2,537 2,443 2Q08 3Q08 Includes volumes produced from oil sands in Canada. (1) 7 © 2008 Chevron Corporation. All Rights Reserved.
U.S. Downstream Income 3Q08 vs. 2Q08 $ Millions Timing Other Effects 96 1,014 Shutdown Impact -682 Realized Industry 1,300 Margins / Margins Volumes 2Q08 3Q08 380 100 -180 Income Income 8 © 2008 Chevron Corporation. All Rights Reserved.
International Downstream Income 3Q08 vs. 2Q08 $ Millions Timing Effects Other -51 817 Volumes Margins -52 15 860 45 2Q08 3Q08 Income Income 9 © 2008 Chevron Corporation. All Rights Reserved.
Chemicals Income 3Q08 vs. 2Q08 $ Millions Olefins Aromatics Other -20 -6 70 55 41 3Q08 2Q08 Income Income 10 © 2008 Chevron Corporation. All Rights Reserved.
(1) All Other Net Charges 3Q08 vs. 2Q08 $ Millions -190 Other Tax -580 90 Environmental 110 190 2Q08 Net 3Q08 Net Charges Charges Includes mining operations of coal and other minerals, and power generation (1) 11 © 2008 Chevron Corporation. All Rights Reserved.
Upstream Update 12 © 2008 Chevron Corporation. All Rights Reserved.
First 3 Quarters Net BOE Production 2007 vs. 2008 MBOED Price Major Base Effects Capital Business Projects Decline Hurricane Disruptions -55 -80 57 2,621 -17 2,526 9 Months 9 Months 2007 2008 13 © 2008 Chevron Corporation. All Rights Reserved.
2008 Net BOE Production Outlook MBOED 4th Qtr Outlook driven by 2,700 ▲ Major Capital Projects ▲ Lower Prices ▼ Base Business declines ▼ Hurricanes 2,600 2,650 2,620 2008 Outlook @ $100/bbl vs. Guidance 2,500 ▼ Price 2,550 2,526 ▼ Hurricanes 2,400 1st 3 Qtrs 4th Qtr 2008 2008 Outlook 2008 Guidance 2008 Outlook @ $100/bbl @ $70/bbl 14 © 2008 Chevron Corporation. All Rights Reserved.
Chevron 2008 Hurricane Damage Pascagoula New Orleans Houston (5) 2 2 (6) 3 (2) 2 3 3 3 3 15 © 2008 Chevron Corporation. All Rights Reserved.
Hurricane Restoration Efforts % Pre-Gustav Pre-storm net OEG Production Restored production 100% ~190 MBOED Permanent hurricane losses 75% 6 – 10 MBOED ~50% of pre-storm 50% production restored to date Forecast dependent on 25% third party pipeline Actual repairs Forecast Ike 0% Sep Oct Nov Dec Jan Feb Mar Apr May Date 16 © 2008 Chevron Corporation. All Rights Reserved.
2008 Project Status Nigeria – First production from Agbami (July) Currently ramping-up, at 110 MBOED Expected to reach full capacity (250 MBOED) by the end of 2009 Kazakhstan – SGP full capacity start-up (Sep) TCO operating at 540 MBOED Australia – First gas from NWS Train 5 (Sep) Increases export capacity by 4 MMTPA Republic of the Congo – First production from Moho-Bilondo (April) 17 © 2008 Chevron Corporation. All Rights Reserved.
2008 Project Status (continued) Azerbaijan – First production from ACG Phase III (April) United Kingdom – First production from Brodgar-Callanish (June/July) Gulf of Mexico – Blind Faith commissioning disrupted by hurricanes On track for start-up during 4Q Indonesia – North Duri Area 12 start-up expected during 4Q 18 © 2008 Chevron Corporation. All Rights Reserved.
2009 Project Status Gulf of Mexico – Tahiti topside modules successfully installed First production during 3Q 2009 Brazil – Frade start-up expected during 2Q 2009 FPSO is 85% complete Angola – Tombua Landana remains on schedule Tower base sail-away occurred during October PNZ – Large Scale Steamflood Pilot on schedule To assess the viability of full-field thermal recovery at Wafra 19 © 2008 Chevron Corporation. All Rights Reserved.
Other Upstream Highlights PNZ – Successful contract extension signed during 3Q Canada – Agreement reached with provincial government to develop Hebron Australia – Significant progress of Gorgon to FID Australia – Significant progress of Wheatstone to FEED China – Anticipate Chuandongbei FID during 4Q 20 © 2008 Chevron Corporation. All Rights Reserved.
Questions and Answers 21 © 2008 Chevron Corporation. All Rights Reserved.

More Related Content

Chevron 2008 3Q Earnings Conference Call Presentation (color)

  • 1. Third Quarter 2008 Earnings Conference Call and Webcast October 31, 2008 George Kirkland Executive Vice President, Global Upstream & Gas Steve Crowe Vice President and Chief Financial Officer Jim Aleveras General Manager, Investor Relations © 2008 Chevron Corporation. All Rights Reserved.
  • 2. Cautionary Statement CAUTIONARY STATEMENT RELEVANT TO FORWARD-LOOKING INFORMATION FOR THE PURPOSE OF “SAFE HARBOR” PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 This presentation of Chevron Corporation contains forward-looking statements relating to Chevron’s operations that are based on management’s current expectations, estimates and projections about the petroleum, chemicals and other energy-related industries. Words such as “anticipates,” “expects,” “intends,” “plans,” “targets,” “projects,” “believes,” “seeks,” “schedules,” “estimates,” “budgets” and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and other factors, some of which are beyond our control and are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements. The reader should not place undue reliance on these forward-looking statements, which speak only as of the date of this presentation. Unless legally required, Chevron undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Among the important factors that could cause actual results to differ materially from those in the forward-looking statements are crude- oil and natural-gas prices; refining, marketing and chemicals margins; actions of competitors; timing of exploration expenses; the competitiveness of alternate energy sources or product substitutes; technological developments; the results of operations and financial condition of equity affiliates; the inability or failure of the company’s joint-venture partners to fund their share of operations and development activities; the potential failure to achieve expected net production from existing and future crude-oil and natural-gas development projects; potential delays in the development, construction or start-up of planned projects; the potential disruption or interruption of the company’s net production or manufacturing facilities or delivery/transportation networks due to war, accidents, political events, civil unrest, severe weather or crude-oil production quotas that might be imposed by OPEC (Organization of Petroleum Exporting Countries); the potential liability for remedial actions or assessments under existing or future environmental regulations and litigation; significant investment or product changes under existing or future environmental statutes, regulations and litigation; the potential liability resulting from pending or future litigation; the company’s acquisition or disposition of assets; gains and losses from asset dispositions or impairments; government-mandated sales, divestitures, recapitalizations, industry-specific taxes, changes in fiscal terms or restrictions on scope of company operations; foreign currency movements compared with the U.S. dollar; the effects of changed accounting rules under generally accepted accounting principles promulgated by rule-setting bodies; and the factors set forth under the heading “Risk Factors” on pages 32 and 33 of the company’s 2007 Annual Report on Form 10-K/A. In addition, such statements could be affected by general domestic and international economic and political conditions. Unpredictable or unknown factors not discussed in this report could also have material adverse effects on forward-looking statements. U.S. Securities and Exchange Commission (SEC) rules permit oil and gas companies to disclose only proved reserves in their filings with the SEC. Certain terms, such as “resources,” “undeveloped gas resources,” “oil in place,” “recoverable reserves,” and “recoverable resources,” among others, may be used in this presentation to describe certain oil and gas properties that are not permitted to be used in filings with the SEC. In addition, SEC regulations define oil-sands reserves as mining-related and not a part of conventional oil and gas reserves. 2 © 2008 Chevron Corporation. All Rights Reserved.
  • 3. Financial Highlights 3Q08 Earnings $7.9 Billion Earnings per Diluted Share $3.85 ROCE 27.4% (trailing 12 months) Capital & Exploratory $5.5 Billion 3Q08 Share Repurchases $2.0 Billion Debt Ratio 7.4% Net Cash $4.0 Billion (Cash less Debt) 3 © 2008 Chevron Corporation. All Rights Reserved.
  • 4. Chevron Net Income 3Q08 vs. 2Q08 $ Millions Other Downstream 419 Upstream 2,565 -1,066 7,893 5,975 2Q08 Net 3Q08 Net Income Income 4 © 2008 Chevron Corporation. All Rights Reserved.
  • 5. U.S. Upstream Income 3Q08 vs. 2Q08 $ Millions Realizations Other Volumes September Asset Hurricanes Sales -130 -195 371 -400 350 2,191 2,187 2Q08 3Q08 Income Income 5 © 2008 Chevron Corporation. All Rights Reserved.
  • 6. International Upstream Income 3Q08 vs. 2Q08 $ Millions Realizations Volumes DD&A -260 & Opex Other -635 -220 53 5,057 3,995 2Q08 3Q08 Income Income 6 © 2008 Chevron Corporation. All Rights Reserved.
  • 7. (1) Worldwide Oil & Gas Production 3Q08 vs. 2Q08 MBOED U.S. Kazakhstan Nigeria Other -55 -7 23 -55 2,537 2,443 2Q08 3Q08 Includes volumes produced from oil sands in Canada. (1) 7 © 2008 Chevron Corporation. All Rights Reserved.
  • 8. U.S. Downstream Income 3Q08 vs. 2Q08 $ Millions Timing Other Effects 96 1,014 Shutdown Impact -682 Realized Industry 1,300 Margins / Margins Volumes 2Q08 3Q08 380 100 -180 Income Income 8 © 2008 Chevron Corporation. All Rights Reserved.
  • 9. International Downstream Income 3Q08 vs. 2Q08 $ Millions Timing Effects Other -51 817 Volumes Margins -52 15 860 45 2Q08 3Q08 Income Income 9 © 2008 Chevron Corporation. All Rights Reserved.
  • 10. Chemicals Income 3Q08 vs. 2Q08 $ Millions Olefins Aromatics Other -20 -6 70 55 41 3Q08 2Q08 Income Income 10 © 2008 Chevron Corporation. All Rights Reserved.
  • 11. (1) All Other Net Charges 3Q08 vs. 2Q08 $ Millions -190 Other Tax -580 90 Environmental 110 190 2Q08 Net 3Q08 Net Charges Charges Includes mining operations of coal and other minerals, and power generation (1) 11 © 2008 Chevron Corporation. All Rights Reserved.
  • 12. Upstream Update 12 © 2008 Chevron Corporation. All Rights Reserved.
  • 13. First 3 Quarters Net BOE Production 2007 vs. 2008 MBOED Price Major Base Effects Capital Business Projects Decline Hurricane Disruptions -55 -80 57 2,621 -17 2,526 9 Months 9 Months 2007 2008 13 © 2008 Chevron Corporation. All Rights Reserved.
  • 14. 2008 Net BOE Production Outlook MBOED 4th Qtr Outlook driven by 2,700 ▲ Major Capital Projects ▲ Lower Prices ▼ Base Business declines ▼ Hurricanes 2,600 2,650 2,620 2008 Outlook @ $100/bbl vs. Guidance 2,500 ▼ Price 2,550 2,526 ▼ Hurricanes 2,400 1st 3 Qtrs 4th Qtr 2008 2008 Outlook 2008 Guidance 2008 Outlook @ $100/bbl @ $70/bbl 14 © 2008 Chevron Corporation. All Rights Reserved.
  • 15. Chevron 2008 Hurricane Damage Pascagoula New Orleans Houston (5) 2 2 (6) 3 (2) 2 3 3 3 3 15 © 2008 Chevron Corporation. All Rights Reserved.
  • 16. Hurricane Restoration Efforts % Pre-Gustav Pre-storm net OEG Production Restored production 100% ~190 MBOED Permanent hurricane losses 75% 6 – 10 MBOED ~50% of pre-storm 50% production restored to date Forecast dependent on 25% third party pipeline Actual repairs Forecast Ike 0% Sep Oct Nov Dec Jan Feb Mar Apr May Date 16 © 2008 Chevron Corporation. All Rights Reserved.
  • 17. 2008 Project Status Nigeria – First production from Agbami (July) Currently ramping-up, at 110 MBOED Expected to reach full capacity (250 MBOED) by the end of 2009 Kazakhstan – SGP full capacity start-up (Sep) TCO operating at 540 MBOED Australia – First gas from NWS Train 5 (Sep) Increases export capacity by 4 MMTPA Republic of the Congo – First production from Moho-Bilondo (April) 17 © 2008 Chevron Corporation. All Rights Reserved.
  • 18. 2008 Project Status (continued) Azerbaijan – First production from ACG Phase III (April) United Kingdom – First production from Brodgar-Callanish (June/July) Gulf of Mexico – Blind Faith commissioning disrupted by hurricanes On track for start-up during 4Q Indonesia – North Duri Area 12 start-up expected during 4Q 18 © 2008 Chevron Corporation. All Rights Reserved.
  • 19. 2009 Project Status Gulf of Mexico – Tahiti topside modules successfully installed First production during 3Q 2009 Brazil – Frade start-up expected during 2Q 2009 FPSO is 85% complete Angola – Tombua Landana remains on schedule Tower base sail-away occurred during October PNZ – Large Scale Steamflood Pilot on schedule To assess the viability of full-field thermal recovery at Wafra 19 © 2008 Chevron Corporation. All Rights Reserved.
  • 20. Other Upstream Highlights PNZ – Successful contract extension signed during 3Q Canada – Agreement reached with provincial government to develop Hebron Australia – Significant progress of Gorgon to FID Australia – Significant progress of Wheatstone to FEED China – Anticipate Chuandongbei FID during 4Q 20 © 2008 Chevron Corporation. All Rights Reserved.
  • 21. Questions and Answers 21 © 2008 Chevron Corporation. All Rights Reserved.