Chevron profit nearly quadruples as oil prices surge

div classBodysc17zpet90 cdBBJodivpBy Sabrina Vallep

pHOUSTON Reuters Chevron Corp‘s firstquarter profit nearly quadrupled from the same period a year ago, easily surpassing Wall Street’s forecasts as oil and gas prices surged following Russias invasion of Ukraine.pdivdivdiv classBodysc17zpet90 cdBBJodiv

pThe secondlargest U.S. oil producer on Friday posted adjusted earnings of 6.5 billion, or 3.36 per share, 8 cents above Wall Streets mean estimate of 3.27, according to Refinitiv. Chevron earned 1.7 billion, or 90 cents per share, in the same quarter last year.p

pThe worlds largest energy companies have profited handsomely on the back of rising oil and gas prices, which surged in February as Moscow planned its advance on Ukraine. p

pThe global benchmark Brent averaged 114 per barrel in the first quarter. Energy supplies have tightened around the globe as demand has rebounded to near prepandemic levels.p

pChevrons revenue rose 70 to 54.4 billion in the first quarter, above the Refinitiv consensus of 47.9 billion.p

pThe producer is using its massive profit to raise investments in production and in renewable fuels, return cash to shareholders and pay down debt.p

pThe company‘s U.S. oil and gas production rose by 10 from the yearago period. Russia’s output has dipped after the United States and allies imposed heavy sanctions on Moscow. The United States is the worlds largest crude oil producer, but output has grown slowly in 2022 even as prices have increased.p

pIn the first quarter, Chevron pumped a record of 692,000 barrels of oil and gas per day boed in the Permian, the top U.S. unconventional basin, and boosted fullyear guidance to a range of 700,000 to 750,000 boed.p

p“Chevron is doing its part to grow domestic supply,” Chevrons Chief Executive Mike Wirth said in an earnings release.p

pThe revenues from higher oil prices could be used to return cash to shareholders, expand Chevrons lowcarbon business and pay down debt, Chief Financial Officer Pierre Breber told Reuters.p

p“First is the dividend. The second is investing in the business. Third is maintaining a balanced strong balance sheet. And then the fourth is returning excess cash to shareholders,” he said.p

pChevron earlier this year increased its dividend payments by 6 to 1.42 per share and increased its buyback program to 10 billion annually. p

pThe company has the capacity to raise buybacks further but Chevron is aiming at a level it can maintain when the oil industry goes through a downturn, Breber said.p

p“We have a very clear plan” to deliver high returns to shareholders while decreasing carbon emissions, Breber told Reuters by phone. “We continue to stay on this path.” p

pChevron plans to raise investments and acquisitions this year by more than 50 from 2021, which may include deals in lowercarbon ventures like natural gas and renewable fuels. p

pRBC Capital Markets said earlier this month that Chevron could be interested in buying a liquefied natural gas LNG facility on the U.S. Gulf Coast as it expands its natural gas business. The company declined to comment in speculations.p

pChevron recently expanded its renewable fuels business by buying Renewable Energy Group and signed an agreement with agricultural giant Bunge North America. Its has also invested in hydrogen, carbon capture and offsets businesses, with plans to build 30 hydrogen fueling stations in California. p

pChevrons shares were down 0.5 to 161 in premarket trading.