press release

Chevron Press Release - Chevron Reports 34 Percent Increase In First Quarter Earnings To $616 Million

SAN FRANCISCO, April 22, 1996 -- Chevron Corporation today reported first quarter net income of $616 million ($.94 per share), a 34 percent increase from $459 million ($.70 per share) earned in the first quarter of 1995. There were no special items in this year's first quarter, compared with last year's, which benefited $63 million from special items.

"Overall we had an excellent quarter, both operationally and financially, with operating earnings up 56 percent from the first quarter of 1995," commented Chairman and CEO Ken Derr. "Our worldwide upstream operations reported outstanding results, benefiting from strong crude oil and U.S. natural gas prices. International liquids production continued to increase, up 26,000 barrels per day, or 4 percent, from last year's first quarter to 674,000 barrels per day.

"As expected, chemical earnings declined from the prior year quarter, reflecting softer industry conditions and higher feedstock costs," said Derr.

"Our U.S. refining and marketing earnings of $18 million were a big improvement from last year's loss of $102 million, but still were a very poor return on capital of about 1 percent," said Derr. "From an operational perspective, our refineries ran well in the first quarter, compared with the significant refinery downtime incurred last year. However, despite higher product prices, margins in absolute terms remain low as a very competitive U.S. marketplace did not allow us to fully reflect higher crude oil costs and the additional costs of manufacturing cleaner burning fuels in California. Margins were squeezed as crude oil prices rose nearly $4 per barrel during the last two months of the quarter -- and have increased an additional $3 so far in April.

"We currently have a number of significant events underway," Derr continued. "For instance:

  • Earlier this month, our Caltex affiliate completed the $2 billion sale of its refining affiliate in Japan. We received a cash dividend of $550 million and will recognize a second quarter gain of about $325 million for our share of the transaction.
  • Our 50 percent-owned Tengiz joint venture in Kazakhstan has been very successful in recent months in working with the partners to increase crude oil sales. Tengiz production averaged 83,000 barrels per day in the first quarter, and was 100,000 barrels per day in March, making a positive contribution to first quarter earnings. We are increasingly confident that a solution to the export issue will be reached.
  • Negotiations continue for the merger of our natural gas liquids and natural gas marketing businesses with NGC Corporation, which would give us an approximate 28 percent ownership interest in the resulting company.
  • Our agreement with Maraven to operate the 80,000 barrels per day Boscan heavy oil field in Venezuela is expected to be operational July 1.
  • The N'Kossa oil field in Congo is scheduled to come on stream around June 1, initially producing at about 50,000 barrels per day, with estimated peak production of 120,000 per day. We have a 30 percent interest in this project.
  • Progress continues on the exit from our real estate development business. We are negotiating the sale of the last major portfolio of properties. When completed, we expect to have generated about $300 million of after-tax cash proceeds from the sale of this business for reinvestment in our core operations.
  • Our Caltex affiliate's new 130,000 barrels per day grass-roots refinery in Thailand is scheduled for start-up around mid-year.

"All these events are intended to position the company for profitable growth," concluded Derr. "And we've got a strong portfolio of many other projects underway that are expected to add to shareholder value over the next couple of years."

Chevron's return on capital employed, excluding special items, was 10.6 percent for the 12 months ended March 31, compared with 9.8 percent for the year 1995.

Total revenues for the quarter were $10.3 billion, up 14 percent from $9.0 billion in last year's first quarter. The increased revenues resulted from higher crude oil, natural gas and refined products prices.

Foreign currency effects reduced net income $14 million in the 1996 quarter; in the prior year first quarter, there were no net foreign currency effects.

Exploration and Production

U.S. exploration and production net earnings were $268 million, up significantly from $150 million in the 1995 first quarter. Higher crude oil and natural gas prices more than offset lower crude oil production volumes.

Average crude oil realizations of $16.67 per barrel were up $1.56 from the 1995 first quarter. Average natural gas prices of $2.28 per thousand cubic feet were 83 cents higher than in the comparable prior year quarter.

Net liquids production was 339,000 barrels per day compared with 356,000 barrels per day in the 1995 first quarter; net natural gas production was about flat at 1.9 billion cubic feet per day.

International exploration and production net earnings for the first quarter were $251 million, up from $172 million in last year's first quarter, which included a special charge of $7 million related to an employee severance program.

The strong earnings reflected increased crude oil liftings and higher crude oil prices. Net liquids production increased 26,000 barrels per day to 674,000, mostly due to higher volumes in Angola and Kazakhstan. Natural gas production declined 8 percent to 547 million cubic feet per day, due primarily to a decrease in Canadian production.

Refining and Marketing

U.S. refining and marketing net earnings were $18 million for the quarter, a sharp improvement from the $102 million loss reported in the first quarter of 1995 when very poor sales margins, two major refinery turnarounds and unscheduled refinery maintenance all severely impacted results. Also, the 1995 quarter included a $10 million special charge for environmental remediation.

In 1996, refinery operations were much improved; however, margins remained weak due to competitive market conditions, increased crude oil costs, and in California, the increased manufacturing cost of state-mandated cleaner burning gasolines.

Total product sales volumes were about 1.1 million barrels per day, down slightly from the prior year quarter. Lower unbranded bulk sales volumes were nearly offset by a 5 percent increase in light product sales through the company's marketing system.

The prior year quarter included the Port Arthur, Texas, refinery operations until its sale in late February 1995. Excluding Port Arthur, refinery input at existing refineries increased over 120,000 barrels per day.

International refining and marketing net earnings were $75 million, down from $156 million reported for the first quarter of 1995. However, when 1995 special Caltex-related benefits of $80 million are excluded, 1996 earnings were about flat with the 1995 quarter.

Product sales margins continue to be weak in the United Kingdom and the Caltex areas of operations. Improved trading and shipping results were offset by a $31 million unfavorable swing in foreign currency effects, almost all in the Caltex operating areas. The 1996 first quarter included $10 million in foreign currency losses, whereas the 1995 first quarter benefited from $21 million of foreign currency gains.

Sales volumes increased 9 percent to almost 1.1 million barrels per day, reflecting increases in all the company's refining and marketing operations -- the United Kingdom, Canada and Caltex areas -- as well as higher volumes from international trading activities.

Chemicals

Chemicals net earnings were $64 million in the 1996 quarter compared with a very strong $163 million in last year's first quarter. The decline reflected the weaker industry conditions that began in the last half of 1995, coupled with increased feedstock costs. Lower product prices and higher costs have squeezed sales margins.

Corporate and Other

Corporate and other incurred charges of $72 million compared with charges of $92 million in the comparable prior year quarter. About half of the lower charges resulted from decreased interest expense, due to lower interest rates, and the other half was due to a favorable swing in foreign currency effects.

Capital and Exploratory Expenditures

Capital and exploratory expenditures, including the company's share of affiliates' expenditures, were $923 million in the first quarter, compared with $987 million spent in the first quarter of 1995.


CHEVRON CORPORATION - FINANCIAL REVIEW (MILLIONS OF DOLLARS)

							     -1-
CONSOLIDATED STATEMENT OF INCOME         
 (unaudited)        
                                                         First Quarter
REVENUES: 					       1996         1995
 Sales and Other Operating Revenues (1) 	     $10,157      $8,820
 Equity in Net Income of Affiliated Companies            136         231
 Other Income, Net                                        43         (7)
                                                      10,336       9,044
COSTS AND OTHER DEDUCTIONS:         
 Purchased Crude Oil and Products                      5,448       4,518
 Operating Expenses                                    1,313       1,365
 Exploration Expenses                                     92          71
 Selling, General and Administrative Expenses             354        301
 Depreciation, Depletion and Amortization                 531        576
 Taxes Other Than on Income (1)  			1,413      1,373
 Interest and Debt Expense                                 96        110
                                                        9,247      8,314
Income Before Income Tax Expense                        1,089        730
  Income Tax Expense                                      473        271
NET INCOME                                              $ 616      $ 459

PER SHARE AMOUNTS:
NET INCOME                                              $ .94      $ .70
DIVIDENDS                                               $ .50    $ .4625

Average Common Shares Outstanding (000's)             652,563    651,895


EARNINGS BY MAJOR OPERATING AREA
 (unaudited)                               		First Quarter
                                                        1996        1995
Exploration and Production
 United States                                          $268        $150
 International                                           251         172
   Total Exploration and Production                      519         322
Refining, Marketing and Transportation
 United States                                            18        (102)
 International                                            75         156
   Total Refining, Marketing and Transportation           93          54
   Total Petroleum Operations                            612         376
Chemicals                                                 64         163
Coal and Other Minerals                                   12          12
Corporate and Other (2)                                  (72)        (92)
NET INCOME                                               $616       $459
                   				       $1,244     $1,185

(1)  Includes consumer excise taxes
(2)  "Corporate and Other" includes interest expense, interest income on cash and marketable securities, corporate center costs, and real estate and insurance activities.
	

CHEVRON CORPORATION - FINANCIAL REVIEW                         -2-
  (MILLIONS OF DOLLARS)


 SPECIAL ITEMS BY MAJOR OPERATING AREA                  First Quarter
         (unaudited)                                   1996         1995

 International Exploration and Production               $ -          $(7)
U.S. Refining, Marketing and Transportation               -          (10)
International Refining, Marketing and Transportation      -           80
   Total Special Items                                  $ -          $63


 SUMMARY OF SPECIAL ITEMS                                First Quarter
                    (unaudited)                        1996         1995
                                
 Environmental Remediation Provisions                   $ -         $(10)
 Restructurings & Reorganizations                         -           (7)
 Other, Net                                               -           80
   Total Special Items                                  $ -          $63


 FOREIGN EXCHANGE (LOSSES) GAINS                       $(14)         $ -


EARNINGS BY MAJOR OPERATING AREA
EXCLUDING SPECIAL ITEMS
                        (unaudited)                       First Quarter
                                                       1996         1995
Exploration and Production
 United States                                         $268         $150
 International                                          251          179
   Total Exploration and Production                     519          329
Refining, Marketing and Transportation
 United States                                           18          (92)
 International                                           75           76
  Total Refining, Marketing and Transportation           93          (16)
   Total Petroleum Operations                           612          313
Chemicals                                                64          163
Coal and Other Minerals                                  12           12
Corporate and Other  *                                  (72)         (92)
    Earnings Excluding Special Items                    616          396

Special Items                                             -           63
    Net Income                                         $616         $459

 *  "Corporate and Other" includes interest expense, interest income on cash and marketable securities, corporate center costs, and real estate and insurance activities.
	

CHEVRON CORPORATION - FINANCIAL REVIEW                    -3-
       (MILLIONS OF DOLLARS)   

 CONSOLIDATED BALANCE SHEET                        March 31,  December 31,
                  (unaudited)                        1996           1995
 ASSETS:
  Cash and Cash Equivalents                          $980           $621
  Other Current Assets                              6,940          7,246
      Total Current Assets                          7,920          7,867
  Investments and Advances                          4,111          4,087
  Properties, Plant and Equipment-Net               21,662        21,696
  Other                                                676           680
      TOTAL ASSETS                                 $34,369       $34,330

 LIABILITIES:
  Short-Term Debt                                   $3,724        $3,806
  Other Current Liabilities                          5,605         5,639
      Total Current Liabilities                      9,329         9,445
  Long-Term Debt and Capital Lease Obligations       4,274         4,521
  Deferred Income Taxes                              2,531         2,433
  Reserves For Employee Benefit Plans                1,595         1,584
  Deferred Credits and Other Noncurrent Obligations  1,964         1,992
      TOTAL LIABILITIES                             19,693        19,975
 STOCKHOLDERS' EQUITY                               14,676        14,355
      TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY   $34,369       $34,330


 CONSOLIDATED STATEMENT OF CASH FLOWS                      Three Months
                  (unaudited)                         1996          1995

 OPERATING ACTIVITIES
  Net Income                                          $616          $459
  Adjustments
    Depreciation, depletion and amortization           531           576
    Dry hole expense related to prior years' 
	expenditures 					 7             5
    Distributions less than equity in affiliates' 
	income  				       (69)         (145)
    Net before-tax losses on asset retirements and 
	sales  						 7            15
    Net currency translation losses                      6            31
     Net increase in operating working capital         (44)         (436)
    Deferred income tax provision                       86            82
    Other                                              (37)          (23)
         Net cash provided by operating activities    1,103          564
 INVESTING ACTIVITIES
  Capital expenditures                                 (656)        (732)
  Proceeds from asset sales                             190          243
  Net sales of marketable securities                    326          257
         Net cash used for investing activities        (140)        (232)
 FINANCING ACTIVITIES
  Net (payments) borrowings of short-term obligations  (205)         191
  Proceeds from issuance of long-term debt                5           17
  Repayments of long-term debt and other financing 
	obligations 					(72)	     (44)
  Cash dividends paid                                  (326)        (301)
  Purchases of treasury shares                           (2)          (2)
         Net cash used for financing activities        (600)        (139)

 EFFECT OF EXCHANGE RATE ON CASH AND CASH EQUIVALENTS    (4)           2

 NET CHANGE IN CASH AND CASH EQUIVALENTS                359          195

 CASH AND CASH EQUIVALENTS AT JANUARY 1, 1996 AND 1995  621          413
 CASH AND CASH EQUIVALENTS AT MARCH 31, 1996 AND 1995  $980         $608
	

CHEVRON CORPORATION - FINANCIAL REVIEW                         -4-

CAPITAL AND EXPLORATORY EXPENDITURES (1)                  First Quarter
                      (millions of dollars)    	       1996         1995
United States
   Exploration and Production                          $194         $163
Refining, Marketing and Transportation                   80          183
   Chemicals                                             50           17
   Other                                                 14           12
     Total United States                                338          375

International
   Exploration and Production                           444          459
   Refining, Marketing and Transportation               138          148
   Chemicals                                              3            4
   Other                                                  -            1
     Total International                                585          612
     Worldwide                                        $923          $987

OPERATING STATISTICS (1)
NET LIQUIDS PRODUCTION (MB/D):
   United States                                        339          356
   International                                        674          648
     Worldwide                                        1,013        1,004

NET NATURAL GAS PRODUCTION (MMCF/D):
   United States                                      1,876        1,935
   International                                        547          592
     Worldwide                                        2,423        2,527

SALES OF NATURAL GAS (MMCF/D):
   United States                                      3,515        2,734
   International                                        681          506
     Worldwide                                        4,196        3,240
                    
SALES OF NATURAL GAS LIQUIDS (MB/D):
   United States                                        240          248
   International                                         39           47
     Worldwide                                          279          295

SALES OF REFINED PRODUCTS (MB/D):
   United States                                      1,078        1,098
   International                                      1,073          984
	

Updated: April 1996