Production is essentially flat year over year. Let’s recap the current and apparent oversupply situation in the oil patch.
Russian production: all-time highs
Saudi and OPEC production: all-time highs
CVX oil production: all-time highs
The King of the Frackers, PXD’s oil production: all-time highs
etc., etc., etc.
Boy, this price decline has really hurt oil production, no? That’s how oil bottomed, right? All of the marginal players stopped producing and the supply/demand situation tipped the scales into the bulls favor, right?
None of that shit happened. These companies are drilling faster than ever. Supply is at record levels. The terminals at Cushing, OK are brimming with light sweet crude.
Highlights of the CVX quarter, courtesy of Briefing.com.
- Reports Q1 (Mar) loss of $0.39 per share, $0.23 worse than the Capital IQ Consensus of ($0.16); revenues fell 31.9% year/year to $23.53 bln vs the $22.74 bln two analyst estimate.
- Co said, “Our Upstream business was impacted by a more than 35% decline in crude oil prices. Our Downstream operations continued to perform well, although overall industry conditions and margins this quarter were weaker than a year ago. Our efforts are focused on improving free cash flow,” Watson stated. “We are controlling our spend and getting key projects under construction online, which will boost revenues. We announced first LNG production and first cargo shipment from Train 1 at the Gorgon Project in March. Production from the Angola LNG plant is imminent and a cargo shipment is expected in May. Earlier in the year, we started up production at the Chuandongbei Project in China, and we continue to ramp up production in the Permian Basin and elsewhere.”
- Upstream: Worldwide net oil-equivalent production was 2.67 mln barrels per day in first quarter 2016, compared with 2.68 mln barrels per day in the 2015 first quarter
- Production increases from project ramp-ups in the United States, Nigeria and other areas, and production entitlement effects in several locations, were offset by the Partitioned Zone shut-in and normal field declines.
- International: International upstream operations incurred a loss of $609 mln in first quarter 2016 compared with earnings of $2.02 bln a year earlier.
- The decrease was due to lower crude oil and natural gas realizations, the absence of a first quarter 2015 reduction in statutory tax rates in the United Kingdom, and lower gains on asset sales. Partially offsetting these effects were higher liftings and lower exploration expenses. Foreign currency effects decreased earnings by $298 mln in the 2016 quarter, compared with an increase of $522 mln a year earlier.
- International downstream operations earned $488 mln in first quarter 2016 compared with $717 mln a year earlier. The decrease was primarily due to lower margins on refined product sales, partially offset by lower operating expenses and a favorable change in effects on derivative instruments. Foreign currency effects decreased earnings by $48 mln in first quarter 2016, compared with an increase of $54 mln a year earlier.
Refinery crude oil input of 795,000 barrels per day in first quarter 2016 increased 13,000 barrels per day from the year-ago period, mainly due to lower turnaround activity, partially offset by the divestment of Caltex Australia Limited
- Downstream: U.S. downstream operations earned $247 mln in first quarter 2016 compared with earnings of $706 mln a year earlier
- The decrease was primarily due to lower margins on refined products, an asset impairment, higher operating expenses primarily due to planned turnaround activity in first quarter 2016, and lower earnings from the 50%-owned Chevron Phillips Chemical Company LLC. Refinery crude oil input in first quarter 2016 increased 4% to 957,000 barrels per day from the year-ago period