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Chevron 1Q gushes
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April 25, 2001: 1:20 p.m. ET
Exploration and production revenue lifts oil company's results past forecasts
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NEW YORK (CNNfn) - Chevron Corp. and Unocal Corp. are among several oil companies that reported a rise in quarterly profit Wednesday, bolstered by stepped-up exploration and production as fuel prices, particularly for natural gas, continued to rise.
Oil companies have benefited from an electricity shortage in California in which power plants are buying more natural gas, leading to an increase in prices.
But oil prices continue to rise as well. Demand remains strong as consumers shift from home heating oil to gasoline as the summer driving season looms closer in the United States, and as the Organization of Petroleum Exporting Countries (OPEC) cuts production.
Crude oil prices averaged about $28.75 a barrel in the quarter, similar to the strong level they averaged a year ago, while natural gas prices averaged $6.45 per thousand cubic feet, more than 2-1/2 times the $2.46 of the period last year.
Chevron (CHV: up $0.44 to $94.74, Research, Estimates), -- which will be the world's fourth-largest if its pending merger with Texaco (TX: up $0.39 to $71.45, Research, Estimates) is approved – reported first-quarter earnings of $1.6 billion, or $2.49 a share, up from $1.04 billion, or $1.59 a share, in the year-earlier period. That's a 53 percent increase.
Wall Street analysts anticipated $2.21 a share for the No. 2 U.S. oil company, according to earnings tracker First Call.
"As we have seen for more than a year," Chevron CEO Dave O'Reilly said, "our upstream business -- exploration and production -- has been the major contributor to our higher profits."
Chevron's home state has become ground zero of a deepening energy crisis that is forcing Californians to pay substantially more for electricity at the same time that they face the country's highest prices for gasoline.
The soaring price of natural gas – the fuel used at many of California's power plants – played a big role in Chevron's first quarter profit.
Revenue in the quarter rose to $12.3 billion from $11.7 billion, driven by natural gas and refined products sales.
Meanwhile El Segundo, Calif.-based Unocal (UCL: up $0.29 to $37.08, Research, Estimates) reported first-quarter earnings of $340 million, or $1.35 a share excluding items, compared with $139 million, or 57 cents a share a year earlier. Analysts on average expected a range of $1.22-to-$1.30 a share, according to First Call.
Unocal said production of natural gas, for which demand remained strong, helped drive higher profits in the quarter.
Amerada-Hess (AHC: up $1.92 to $86.67, Research, Estimates) also posted better-than expected profit, with earnings of $337 million, or $3.79 a share, compared with $224 million, or $2.47 a share, a year ago.
Analysts had forecast earnings of $3.18 a share, according to First Call.
Sales increased to $4.2 billion in the quarter from $2.8 billion.
And Oklahoma City-based Kerr-McGee (KMG: up $0.73 to $72.38, Research, Estimates) saw earnings surge 81 percent as it reported net income of $33.7 million, or $3.21 a share, compared with $185.2 million, or $1.94 a share a year earlier.
Excluding one-time items, Kerr-McGee earned $253 million, or $2.45 a share, compared with $180 million, or $1.89 a share. Analysts surveyed by First Call anticipated $2.36 a share.
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Sales increased to $1 billion from $886 million a year earlier.
Earlier this week, Exxon Mobil, the world's biggest oil company, reported a $5 billion first-quarter profit, up 44 percent from a year ago. 
from staff and wire reports
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