Chevron Corp said it made record profits during the second quarter of 2022, thanks to high commodity prices, effectively beating analysts’ expectations for both revenue and earnings per share.
Chevron reported earnings of US$5.95 per diluted share, compared to $1.60 in the second quarter a year ago, beating estimates of $5.02 per diluted share. The oil and gas giant also posted revenues of US$68.76 billion for 2Q, beating estimates of $59.29 billion.
Sales and other operating revenues in the second quarter of 2022 were $65 billion, compared to $36 billion in the year-ago period.
READ: Exxon Mobil sees its 2Q profit soar nearly 300% on surging energy prices
Included in the current quarter were charges associated with an early contract termination of $600 million, pension settlement costs of $11 million, and a gain on asset sales of $200 million. Foreign currency effects increased earnings by $668 million.
“Second quarter financial performance improved as we delivered a return on capital employed of 26%,” Mike Wirth, Chevron’s chief executive officer, said in a statement.
The company also strengthened its balance sheet, lowering its debt ratio to under 15%, and increased the top end of its annual share repurchase guidance range to $15 billion.
“We more than doubled investment compared to last year to grow both traditional and new energy business lines,” Wirth said. “With Permian production more than 15% higher than a year ago and now as one of the leading renewable fuel producers in the United States, Chevron is increasing energy supplies to help meet the challenges facing global markets.”
This investment includes total capital and exploratory and acquisition-related expenditures as Chevron closed its acquisition of Renewable Energy Group and completed the formation of a renewable fuels joint venture with Bunge North America.
Also during the second quarter, the company sanctioned the Ballymore project in the deepwater US Gulf of Mexico, which is expected to require a gross investment of approximately $1.6 billion. The field is planned to be produced through an existing facility with an allocated capacity of 75,000 barrels of crude oil per day.
The company’s average US sales price for a barrel of crude oil and natural gas liquids was US$89 in 2Q, up from $54 a year earlier. Gas prices in the US are hovering around US$4 per gallon.
The oil giant increased guidance for its buyback program, lifting the top end of the range to US$15 billion from $10 billion.
The company advanced its carbon capture and storage (CCS) business this quarter by launching a CCS project aimed at reducing the carbon intensity of its upstream operations in California and forming an expanded joint venture to develop the Bayou Bend CCS hub in Texas, with the goal of it becoming one of the first offshore CCS projects in the US.
Chevron shares rose 4% at the opening bell on Friday, to US$156.91 per share.
Contact the author at susie@proactiveinvestors.com