Chevron profit plunges on lower production, prices

Published on NewsOK Modified: May 2, 2014 at 9:58 am •  Published: May 2, 2014
Advertisement
;

NEW YORK (AP) — Chevron Corp. reported a steep decline in first quarter profit because of lower global oil prices and bad weather that slowed oil production.

Chevron said Friday that it earned $4.52 billion in the first three months of the year on revenue of $50.98 billion. Last year during the same period, Chevron earned $6.18 billion on revenue of $54.3 billion.

On a per share basis, Chevron earned $2.36, down from $3.18 last year. Analysts had expected Chevron to earn $2.54, on average, according to FactSet.

Chevron shares fell 2 cents to $124.92 in morning trading.

Chevron and other major oil companies are struggling to maintain production as they drain oil and gas from their fields around the world. At the same time, the cost of exploring new fields is rising as they have to venture into more extreme and remote conditions to access hydrocarbons.

Profits are getting squeezed as these costs rise, because average oil prices have been roughly flat for about three years.

Chevron is developing several enormous projects in Australia and the Gulf of Mexico that are expected to help the company grow production in the coming years. But they aren't producing anything yet, and analysts worry about the company's ability to get the projects up and running on time and on budget.