press release

Chevron Press Release - Chevron Reports First Quarter Net Income Increased 35 Percent To $831 Million

SAN FRANCISCO, April 23, 1997 -- Chevron Corp. today reported that first quarter net income was $831 million ($1.27 per share), an increase of 35 percent from 1996 first quarter net income of $616 million ($.94 per share).

Net income benefited $27 million from net special items, whereas last year's first quarter earnings contained no special items. Excluding the special items, first quarter operating earnings were an all-time high $804 million.

"We're off to a great start in 1997, continuing our record pace of 1996," commented Chairman and CEO Ken Derr. "Our upstream operations turned in excellent results. Crude oil and natural gas prices on average were higher than a year ago, although they have fallen significantly from year-end 1996 levels. The declining oil and gas prices during the quarter benefited our U.S. downstream and chemicals businesses, as lower feedstock and fuel costs improved product sales margins." Derr observed that while this year's first quarter was a period of declining crude oil prices, during last year's first quarter, prices rose steadily, dampening downstream profitability.

"Crude oil prices have continued to soften into the second quarter," said Derr. "This should help maintain downstream and chemical margins, while our continued production growth and cost containment efforts should help lessen the impact of declining prices on upstream results.

"Our worldwide liquids production was up 63,000 barrels per day, or 6 percent, from the first quarter of last year, to 1,076,000 barrels," continued Derr. "For the second consecutive quarter, U.S. oil and gas production was higher than the year before, evidence that we are reversing our domestic production decline. Ongoing operating expenses declined to $5.89 per barrel, down ten cents from the year-ago quarter. Return on capital employed, excluding special items, was a strong 13.5 percent for the 12 months ended March 31, 1997, compared with 12.8 percent for the year 1996."

Total revenues for the quarter were $11.1 billion, up 8 percent from $10.3 billion in last year's first quarter.

Foreign currency effects reduced net income in both quarters -- $18 million in 1997 and $14 million in 1996.

Exploration and Production

U.S. exploration and production net earnings were $361 million, up from $268 million in the 1996 first quarter. The 1997 results included special gains of $49 million from the sales of two producing properties and charges of $6 million for environmental remediation provisions. Higher crude oil and natural gas prices and volumes accounted for the strong increase in operating earnings.

Average crude oil realizations of $19.86 per barrel were up $3.19 from the 1996 first quarter. Average natural gas prices of $2.77 per thousand cubic feet were 49 cents higher than in the first quarter of last year.

Net liquids production increased to 347,000 barrels per day from 339,000 in the prior-year first quarter. Also, net natural gas production of 1.93 billion cubic feet per day was up from 1.88 billion.

International exploration and production net earnings were $347 million, up 38 percent from $251 million in the 1996 first quarter. The strong earnings reflected increased crude oil liftings and higher crude oil and natural gas prices, when compared with the year-ago quarter.

Net liquids production increased 55,000 barrels per day to 729,000, mostly due to higher volumes in Kazakhstan and Congo. Natural gas production increased 13 percent to 617 million cubic feet per day, from higher production in Kazakhstan and Canada.

Refining and Marketing

U.S. refining and marketing net earnings were $70 million. Excluding a special charge of $8 million included in the 1997 results, operating earnings were $78 million, a sharp improvement from the $18 million reported in last year's first quarter.

In the 1996 first quarter, crude oil prices increased faster than prices for the company's refined products, particularly gasoline. The reverse occurred in the 1997 first quarter when crude oil prices rapidly declined, benefiting downstream sales margins. Partially offsetting this improvement was refinery downtime for planned maintenance. Despite the improvement in earnings, the company's return on capital remains very low in the capital intensive and highly competitive U.S. refining and marketing business.

Total product sales volumes were 1.17 million barrels a day, up 9 percent from the comparable quarter last year. Branded gasoline sales increased 2 percent to 480,000 barrels per day.

International refining and marketing net earnings were $56 million, down from $75 million reported for the first quarter of 1996. Product sales margins continue to be weak in the United Kingdom and in most of Caltex's Asia-Pacific areas of operation. Additionally, foreign currency effects in 1997, mostly related to Caltex translation losses in Korea, reduced earnings $29 million. In the 1996 first quarter, foreign currency losses were $10 million.

Sales volumes declined 15 percent to 912,000 barrels per day, reflecting the absence of volumes associated with Caltex's interest in a Japanese affiliate that was sold in the second quarter of 1996, and lower sales volumes from Chevron's international trading activities.

Chemicals

Chemicals net earnings were $63 million in the 1997 quarter, about flat with $64 million earned in last year's first quarter. Results continue to reflect the cyclical downturn in the chemicals industry, but were much improved from the 1996 fourth quarter because of lower feedstock and fuel costs and price improvements for some of the company's products.

Corporate and Other

Corporate and other incurred charges of $81 million compared with charges of $72 million in the comparable prior-year quarter. However, after excluding a 1997 special charge of $8 million for environmental remediation, charges were flat between periods.

Capital and Exploratory Expenditures

Capital and exploratory expenditures, including the company's share of affiliates' expenditures, were $941 million in the 1997 first quarter, compared with $923 million spent in the first quarter of 1996.


CHEVRON CORPORATION - FINANCIAL REVIEW
(MILLIONS OF DOLLARS)


   
CONSOLIDATED STATEMENT OF INCOME                                        Three Months
   (unaudited)                                                       1997       1996
                
REVENUES:        
 Sales and Other Operating Revenues (1)                            $10,794    $10,157
 Equity in Net Income of Affiliated Companies                          178        136
 Other Income                                                          121         43
                                                                    11,093     10,336
COSTS AND OTHER DEDUCTIONS:     
 Purchased Crude Oil and Products                                    5,710      5,448
 Operating Expenses                                                  1,375      1,313
 Selling, General and Administrative Expenses                          345        354 
 Exploration Expenses                                                   81         92 
 Depreciation, Depletion and Amortization                              546        531           
 Taxes Other Than on Income (1)                                      1,495      1,413
 Interest and Debt Expense                                              82         96           
                                                                     9,634      9,247 
Income Before Income Tax Expense                                     1,459      1,089
 Income Tax Expense                                                    628        473 
NET INCOME                                                           $ 831       $616           

PER SHARE AMOUNTS               
NET INCOME                                                          $ 1.27      $ .94
DIVIDENDS                                                           $  .54      $ .50

Average Common Shares Outstanding (000's)                          653,323    652,563


EARNINGS BY MAJOR OPERATING AREA
   (unaudited)                                                           Three Months
                                                                      1997       1996           
Exploration and Production      
 United States                                                       $ 361      $ 268           
 International                                                         347        251           
  Total Exploration and Production                                     708        519           
Refining, Marketing and Transportation
 United States                                                          70         18           
 International                                                          56         75           
  Total Refining, Marketing and Transportation                         126         93           
  Total Petroleum Operations                                           834        612           
Chemicals                                                               63         64           
Coal                                                                    15         12           
Corporate and Other (2)                                                (81)       (72)          
NET INCOME                                                           $ 831      $ 616           
        
(1)  Includes consumer excise taxes                                $ 1,314    $ 1,244


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

SPECIAL ITEMS BY MAJOR OPERATING AREA                                   First Quarter
 (unaudited)      1997       1996
         
U. S. Exploration and Production                                     $  43       $ - 
U. S. Refining, Marketing and Transportation                            (8)        - 
Corporate and Other*                                                    (8)        - 
  Total Special Items                                                 $ 27       $ - 
                
SUMMARY OF SPECIAL ITEMS                                                First Quarter
 (unaudited)                                                          1997       1996
        
Asset Sales                                                           $ 49       $ - 
Environmental Remediation Provisions                                   (14)        - 
Other, Net                                                              (8)        - 
  Total Special Items                                                 $ 27       $ - 

FOREIGN EXCHANGE LOSSES                                              $ (18)     $ (14)

EARNINGS BY MAJOR OPERATING AREA 
 EXCLUDING SPECIAL ITEMS            
 (unaudited)                                                            First Quarter           
                                                                      1997       1996    
Exploration and Production
 United States                                                       $ 318      $ 268 
 International                                                         347        251 
  Total Exploration and Production                                     665        519 
Refining, Marketing and Transportation   
 United States                                                          78         18 
 International                                                          56         75 
  Total Refining, Marketing and Transportation                         134         93 
  Total Petroleum Operations                                           799        612 
Chemicals                                                               63         64 
Coal                                                                    15         12 
Corporate and Other *                                                  (73)       (72)
 Earnings Excluding Special Items                                      804        616 

Special Items                                                           27         - 
 Net Income                                                          $ 831      $ 616 

 

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


CONSOLIDATED BALANCE SHEET                                  March 31,    December 31,
     (unaudited)                                                 1997        1996
ASSETS:
  Cash and Cash Equivalents                                 $   1,385   $     892
  Other Current Assets                                          6,316       7,050
    Total Current Assets                                        7,701       7,942
  Investments and Advances                                      4,524       4,463
  Properties, Plant and Equipment-Net                          21,684      21,496
  Other                                                         1,008         953
    TOTAL ASSETS                                            $  34,917   $  34,854

LIABILITIES:
  Short-Term Debt                                           $   2,865   $   2,706
  Other Current Liabilities                                     5,487       6,201
    Total Current Liabilities                                   8,352       8,907
  Long-Term Debt and Capital Lease Obligations                  3,918       3,988
  Deferred Income Taxes                                         3,012       2,851
  Reserves For Employee Benefit Plans                           1,619       1,627
  Deferred Credits and Other Noncurrent Obligations             1,873       1,858
    TOTAL LIABILITIES                                          18,774      19,231

STOCKHOLDERS' EQUITY                                           16,143      15,623
    TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY              $  34,917   $  34,854


CONSOLIDATED STATEMENT OF CASH FLOWS                                 Three Months
         (unaudited)                                             1997        1996

OPERATING ACTIVITIES
  Net Income                                                $     831   $     616
  Adjustments
    Depreciation, depletion and amortization                      546         531
    Dry hole expense related to prior years' expenditures          13           7
    Distributions less than equity in affiliates' income          (88)        (69)
    Net before-tax (gains) losses on asset retirements and sales  (67)          7
    Net currency translation (gains) losses                        (7)          6
    Net increase in operating working capital                    (315)        (44)
    Deferred income tax provision                                 168          86
    Other                                                         (51)        (37)
      Net cash provided by operating activities                 1,030       1,103

INVESTING ACTIVITIES
  Capital expenditures                                           (712)       (656)
  Proceeds from asset sales                                        58         190
  Net sales of marketable securities                              328         326
    Net cash used for investing activities                       (326)       (140)

FINANCING ACTIVITIES
  Net borrowings (payments) of short-term obligations             304        (205)
  Proceeds from issuance of long-term debt                          5           5
  Repayments of long-term debt and other financing obligations   (156)        (72)
  Cash dividends paid                                            (353)       (326)
  Purchases of treasury shares                                     (2)         (2)
    Net cash used for financing activities                       (202)       (600)

EFFECT OF EXCHANGE RATE ON CASH AND CASH EQUIVALENTS               (9)         (4)

NET CHANGE IN CASH AND CASH EQUIVALENTS                           493         359

CASH AND CASH EQUIVALENTS AT JANUARY 1, 1997 AND 1996             892         621
CASH AND CASH EQUIVALENTS AT MARCH 31, 1997 AND 1996        $   1,385   $     980

	

CAPITAL AND EXPLORATORY EXPENDITURES (1)                                First Quarter           
 (millions of dollars)                                             1997          1996           
United States
 Exploration and Production                                       $ 298         $ 194           
 Refining, Marketing and Transportation"                             63            80           
 Chemicals                                                           92            50           
 Other                                                               30            14           
  Total United States                                               483           338           

International
 Exploration and Production                                         339           444           
 Refining, Marketing and Transportation                              91           138           
 Chemicals                                                           26             3           
 Other                                                                2             -           
  Total International                                               458           585           
  Worldwide                                                       $ 941         $ 923           

OPERATING STATISTICS (1)
NET LIQUIDS PRODUCTION (MB/D):
 United States                                                      347           339           
 International                                                      729           674           
  Worldwide                                                       1,076         1,013           

NET NATURAL GAS PRODUCTION (MMCF/D):
 United States                                                    1,927         1,876   
 International                                                      617           547           
  Worldwide                                                       2,544         2,423   

SALES OF NATURAL GAS (MMCF/D):
 United States                                                    3,770         3,515   
 International                                                      777           681           
  Worldwide                                                       4,547         4,196   

SALES OF NATURAL GAS LIQUIDS (MB/D):
 United States                                                      157           240           
 International                                                       40            39           
  Worldwide                                                         197           279           

SALES OF REFINED PRODUCTS (MB/D):
 United States                                                    1,170         1,078
 International                                                      912         1,073   
  Worldwide                                                       2,082         2,151   

REFINERY INPUT (MB/D):
 United States                                                      846           927           
 International                                                      573           670           
  Worldwide                                                       1,419         1,597

CHEMICALS SALES & OTHER OPERATING       
REVENUES (millions of dollars) (2)
 United States                                                    $ 752         $ 716           
 International                                                      134           151           
  Worldwide                                                       $ 886         $ 867           

(1) Includes interest in affiliates.
(2) Includes sales to other Chevron companies. 

Updated: April 1997