Per-share profit climbed to $2.29 from $1.64 a year earlier, the San Ramon, California-based company said today in a statement on PR Newswire.
Chief Executive Officer David O'Reilly tapped new wells in Africa and the Caribbean and had Unocal's operations for the full quarter after buying the company in August 2005. Chevron also resumed output from some Gulf of Mexico wells and onshore fuel plants that were idled a year earlier by hurricanes. The company last month took the first step toward unlocking reserves beneath the Gulf that may be as vast as Alaska's Prudhoe Bay.
``Chevron has been plodding along, investing in their operations, and they've had some big finds which have the potential for long-term future payoffs,'' said Douglas Christopher, who helps manage $8 billion, including Chevron shares, at Crowell Weedon & Co. in Los Angeles.
U.S. oil futures traded 12 percent higher than a year earlier, at a third-quarter average of $70.60 per barrel. Prices climbed, reaching a record $78.40 in July, as militants disrupted supplies in Nigeria, Africa's biggest crude producer, and worldwide demand rose.
Unocal Wells
The earnings statement was released before the opening of regular trading on U.S. stock markets. Shares of Chevron yesterday fell 8 cents to $67.50 in New York Stock Exchange composite trading. The stock, which has climbed 19 percent this year, has 11 buy ratings, 12 hold recommendations and one sell rating from analysts.
Each $1 increase in the price of oil boosts Chevron's per- share earnings by 1.8 percent, said William Featherston, a UBS Securities LLC analyst who rates the company's stock at ``neutral.''
Chevron raised production at its Lobito field off the Angolan coast, part of the company's $2.3 billion BBLT deepwater development, and by tapping the Dolphin Deep gas field in Trinidad & Tobago, said Daniel Barcelo, an analyst at Banc of America Securities in New York who rates the company's shares a ``buy'' and doesn't own any.
Chevron's results capped a week of earnings announcements by five of the world's six largest publicly traded oil companies. Irving, Texas-based Exxon Mobil Corp., the world's largest oil company, yesterday reported net income of $10.5 billion, up 5.7 percent from a year earlier.
Big Oil
Exxon Mobil, Houston-based ConocoPhillips and Europe's Royal Dutch Shell Plc and BP Plc netted more than $26.5 billion combined in the quarter. That works out to $200,000 a minute.
U.S. refining margins averaged about $11 per barrel during the third quarter, down 26 percent from a year earlier, based on benchmark crude-oil and fuel futures traded in New York. Retail gasoline prices in the U.S. dropped 19 percent as fuel output grew faster than demand.
O'Reilly, a Dublin-born chemical engineer, is in talks to join with Chinese petroleum producers on exploration and production ventures one year after beating out China's Cnooc Ltd. to acquire Unocal.
Last month, Chevron announced it had completed the deepest successful test of a Gulf of Mexico well, showing it may be possible to produce billions of barrels of oil from undersea reservoirs previously thought too deep to exploit.
Jack No. 2
The Jack No. 2 well, operated and 50 percent owned by Chevron, dug into geologic formations that are two miles deeper than the Gulf fields pumped today.
The Jack field, discovered by Chevron in July 2004, may hold as much as 500 million barrels of oil, Barcelo said. The field is 20,000 feet (6,096 meters) below the seafloor under 7,000 feet of water.
Jack and nearby discoveries, such as Chevron's Tahiti and BP Plc's Kaskida fields, are part of a layer of rocks between 24 million and 65 million years old that span thousands of square miles beneath the Gulf and may hold 3 billion to 15 billion barrels of crude and gas.
Chevron expects to begin producing oil and gas from Jack in six or seven years.
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