3 International Energy Players to Look at

Earnings driven by increased crude oil realizations:Chevron Corp (NYSE: CVX) has recently witnessed a pull back from its investors as they withdrew a proposal related to the company reporting on the risks from policies to address climate change. On the other hand, CVX recently announced for significant non-core asset sales with streamlining in overall operations. During Q1FY17, Chevron’s revenue grew by 39.1% year on year (yoy) to about $32 billion, while earnings stood at $2.7 billion (against a loss of $725 million in Q1FY16) led by higher crude oil realizations, gain of ~$600 million from the sale of the Indonesia geothermal business, higher natural gas sale volumes and lower operating expenses. Foreign currency effects, however, reduced earnings in Q1FY2017 by $241 million against a decrease of $319 million in Q1FY16. The average sales price for crude oil was $49 per barrel against $29 in Q1FY16 and the average price of natural gas was $4.36 per thousand cubic feet, compared with $3.91 in Q1FY16. Further, cash flows improved significantly benefitted by increasing crude oil prices in international upstream division and ongoing efficiencies implemented across the company. Importantly, CVX has continued to make substantial progress on reducing spending and the operating expenses slipped by 14% yoy in Q1FY17 and capital spending declined over 30% yoy. Further, the company started several new projects while progressing on asset sales. Overall net oil-equivalent production in Q1FY17 increased 3% compared to the 2016 full year and looks to be on track to meet the 4-9% target for 2017.

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