U.S. oil giant Chevron posted its worst quarterly results this year 2020. The company admitted recording its worst quarterly loss in at least three decades, weighed down by the fall in oil prices and the global collapse in demand due to Covid-19.

“The economic impact of the response to COVID-19 significantly reduced demand for our products and lowered commodity prices. Given the uncertainties associated with economic recovery, and ample oil and gas supplies, we made a downward revision to our commodity price outlook which resulted in asset impairments and other charges.” said Michael K. Wirth, Chevron’s chairman of the board and chief executive officer. “While demand and commodity prices have shown signs of recovery, they are not back to pre-pandemic levels, and financial results may continue to be depressed into the third quarter 2020.”

According to report, the company reported a 65% (y-o-y) decline in the second quarter revenues and now announced a third quarter dividend of $1.29 per share despite its second quarter operating cash flow nearly touching negative territory.

Chevron announced that the multibillion dollar downfall on its assets for the second time in a year will cut the equivalent of 5% of its worldwide output during the current quarter and backtracked on plans to massively ramp up production from its prized Permian Basin shale holdings.

Without the massive trading operations that shielded European oil explorers such as Royal Dutch Shell Plc and Total SE from losses, Chevron was exposed to the full force of this year’s oil price rout, which savaged both its oil fields and huge refining complexes.

For the first six months, Chevron’s $6.4 billion of dividend payout and share buybacks were supported by $7 billion of debt raises. The company’s international peers, Royal Dutch Shell and BP have slashed their quarterly dividend by 65% and 50%, respectively. Trefis highlights the key factors driving -26% change in Chevron’s stock since 2017 in an interactive dashboard analysis.

Furthermore, the crude price crash during the quarter bled the company’s production division while Covid-19 lockdowns lowered demand for everything from jet fuel to plastic wrap, hobbling the company’s refining and chemical units.

Chevron fully erased the value of its Venezuela operations from its books, amounting to $2.6 billion, after they were effectively frozen by U.S. sanctions, and wrote down another $1.8 billion in assets due to lower commodities prices.

Even stripping out the impairments, Chevron’s adjusted loss was $3 billion, more than twice the average analyst estimate in a Bloomberg survey and the deepest since at least 1989.

“While demand and commodity prices have shown signs of recovery, they are not back to pre-pandemic levels, and financial results may continue to be depressed into the third quarter 2020,” Chevron said in a statement.

Venezuela and low prices aside, Chevron also had a one-off charge of $780 million related to its plan to cut 6,000 jobs, or about 13% of its workforce.

Despite massive drop, Chevron CEO Mike Wirth saw an opportunity for expansion amid the rout: The $5 billion, all-stock takeover of Noble Energy Inc. announced less than two weeks ago. The deal comes at a minuscule premium and plugs holes in Chevron’s long-term portfolio, analysts noted.

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