===============================================================================
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
Current Report
Pursuant to Section 13 of 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 29, 1998
Chevron Corporation
-------------------
(Exact name of registrant as specified in its charter)
Delaware 1-368-2 94-0890210
--------------------------- ---------------------- -------------------
(State or other jurisdiction (Commission File Number) (I.R.S. Employer No.)
of incorporation )
575 Market Street, San Francisco, CA 94105
----------------------------------------- -----------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (415) 894-7700
-------------------------------------------------------------
(Former name or former address, if changed since last report)
Item 5. Other Events.
------------
On January 22, 1998, Chevron Corporation issued a press release
announcing preliminary, unaudited earnings for the year ending December
31, 1997.
Item 7. Financial Statements and Exhibits.
---------------------------------
(c) Exhibits.
99.1 Press Release of Chevron Corporation dated January 22, 1998,
entitled "Chevron Reports Record 1997 Net Income of $3.310
Billion"
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: January 29, 1998
CHEVRON CORPORATION
By /s/ S. J. CROWE
-----------------------
S. J. Crowe, Comptroller
(Duly Authorized Officer)
EXHIBIT 99.1
------------
Chevron Corporation
Public Affairs
P. O. Box 7753
San Francisco, CA 94120-7753
Phone 415 894 4246
News
For Release at 6:00 AM PST
January 22, 1998
- --------------------------
Chevron Reports Record 1997 Net Income of $3.310 Billion
Fourth Quarter 1997 net income doubled to $929 million
Operating earnings for the year increased 20 percent to a record $3.180
billion
Annual return on capital employed, excluding the effects of special
items, was 14.7 percent, the highest in the last decade
Debt was reduced by more than $600 million during the year
Annual dividends increased for the tenth consecutive year
A $2.0 billion share repurchase program began in December 1997
International liquids production increased 4 percent, an increase for the
eighth consecutive year
Worldwide net oil and gas reserve additions exceeded production for the
fifth consecutive year
U. S. net oil and gas reserve additions replaced production for the first
time since 1984
San Francisco, Jan. 22 - Chevron Corporation today reported that preliminary
net income for the year 1997 was a record $3.310 billion ($5.03 per share), up
27 percent from 1996 net income of $2.607 billion ($3.98 per share). Net
income for 1997 included net benefits of $130 million from special items while
net income in 1996 included $44 million of net special charges.
Net income of $929 million ($1.41 per share) for the fourth quarter 1997
included net benefits of $122 million from special items, primarily net gains
from asset dispositions and favorable prior-year tax adjustments. Fourth
quarter 1996 net income of $464 million ($0.71 per share) included special
charges totaling $221 million, mostly related to the then-expected merger of
the company's United Kingdom refining and marketing operations with two other
oil companies.
Operating earnings for 1997 were $3.180 billion, up 20 percent from $2.651
billion earned in 1996, after excluding special items in both years. Fourth
quarter 1997 operating earnings increased 18 percent to $807 million from $685
million earned in the 1996 fourth quarter.
Fourth Quarter Year
-------------- ---------------
$ Millions 1997 1996 1997 1996
----- ----- ----- -----
Operating Earnings 807 685 3,180 2,651
Special Items 122 (221) 130 (44)
--- ---- ----- ------
Net Income 929 464 3,310 2,607
=== ==== ===== =====
Chairman and CEO Ken Derr said "For the second year in a row, I am very
pleased to announce that our company earned record profits. In spite of lower
crude oil prices, we reached our earnings goal of $3 billion one year ahead of
schedule. Our earnings improvement in 1997 was driven by the excellent
performance of our U.S. refining and marketing operations and our continued
-1-
<PAGE>
focus on international liquids production growth. Our employees executed our
plans with excellence and built on the success we demonstrated in 1996.
Derr continued "Our U.S. refining and marketing business had its best
year since 1988. Our strategies of maximizing brand value, maintaining
incident free operations, and focusing on controlling costs really paid off.
U.S. refining and marketing 1997 operating earnings of $662 million more than
doubled from last year's level, benefiting from increased refined product
demand and improved sales margins.
"International exploration and production operations increased net
liquids production by 4 percent, to 731,000 barrels per day in 1997, the eighth
consecutive year of production increases. In the U.S., I'm pleased that we
reversed the decline in liquids production that we've seen during the last
several years and increased production to 343,000 barrels per day from 341,000
barrels per day in 1996.
Derr said "Operating expenses, excluding the effects of special items,
declined 7 percent to $5.68 per barrel in 1997. The per-barrel reduction in
operating expenses was due to an absolute reduction of more than $200 million
and a 4 percent increase in liquids production and product sales volumes.
Since 1991 we have taken more than $1.5 billion out of our cost structure.
"Our return on capital employed, excluding special items, increased to
14.7 percent for the year 1997 compared with 12.8 percent last year. Due to
the company's continued financial success and its excellent opportunities for
growth, the Board of Directors approved a $6.3 billion capital program for
1998, the largest in the company's history. This capital program will allow us
to build on the exploration and production successes we've had in West Africa,
Kazakhstan, Australia, the North Sea, offshore eastern Canada and the deep
water areas of the Gulf of Mexico".
"A number of significant highlights affecting our current and future
operations occurred in 1997," said Derr. These included:
- -- Worldwide Liquids Production. Worldwide net liquids production increased
by 3 percent to 1.074 million barrels per day, the highest level since
1985, reflecting increased production in Kazakhstan and West Africa.
- -- Caspian Sea Region. Gross liquids production from the Tengiz field in
1997 averaged about 155,000 barrels per day, an increase of 38 percent
over 1996 average production. In July, Tengizchevroil (TCO), the
company's 45-percent owned affiliate, announced the construction of a
fifth oil and gas processing plant at Tengiz, to be commissioned by the
end of 1999. This $250 million expansion project is expected to boost
production capacity to 240,000 barrels per day. TCO continues to
successfully move crude oil by pipeline, barge and rail car and looks
forward to the completion of a direct pipeline to the Black Sea by the
Caspian Pipeline Consortium (CPC). In May 1997, Chevron acquired a 15
percent interest in CPC. In addition, the company signed an agreement
with the Republic of Azerbaijan to explore the Absheron Offshore Block in
the southern Caspian Sea.
- -- Angola. The first production of crude oil from the Ndola and Sanha
Fields, offshore Angola, began in April and August 1997, respectively,
opening a new production area for Chevron's Angolan operations. Also,
the company announced two giant crude oil discoveries in Block 14, a
contract area adjacent to our major areas of production, and the
-2-
<PAGE>
company's first finds in that country's deep-water. Chevron is operator
and holds a 31 percent interest in Block 14.
- -- LL-652 Operating Agreement, Venezuela. Chevron and its partners
successfully bid to operate the LL-652 oil field in Venezuela's Lake
Maracaibo. Chevron, with a 30 percent interest, will operate the field
under a 20-year contract beginning in 1998. The field currently is
producing 11,700 barrels per day. The partners are preparing a field
development plan that is expected to increase production to the field's
estimated potential of 115,000 barrels per day by 2006.
- -- Hibernia, Eastern Canada. In November, initial production began from the
Hibernia oil development project, off the east coast of Newfoundland, in
which Chevron has an approximate 27 percent interest. At year-end 1997,
production from two wells had reached 60,000 barrels per day.
- -- Deep Water Gulf of Mexico. Chevron acquired 134 additional offshore
Louisiana and Texas leases at federal sales during the year, furthering
its intent to be a major participant in the development of the Gulf's
deep waters. The company's deep water portfolio consists of 362 tracts
in waters as deep as 8,500 feet, including an interest in the Genesis
project, where first production is expected in late 1998.
- -- Chemicals. Chevron and its partner, the Saudi Industrial Venture Capital
Group, broke ground on a $650 million petrochemical complex in Al-Jubail,
Saudi Arabia, which is scheduled to be completed in 1999. The facilities
will manufacture cyclohexane and benzene, using Chevron's proprietary
Aromax technology. In a separate development, Chevron Chemical signed a
memorandum of understanding in May with a subsidiary of Petroleos de
Venezuela, S.A. to study the feasibility of an integrated aromatics
project in Venezuela. In the United States, a major expansion and
debottlenecking of the Port Arthur, Texas ethylene plant was completed
during the year.
"These events will help position the company to continue growing its core
international petroleum and chemicals businesses and to help mitigate the
effects of possible adverse economic pressures," said Derr. "The recent fall
of crude oil and natural gas prices in late 1997 and early 1998 will further
challenge us to find areas where we can develop profitable revenue-generating
opportunities and, at the same time, continue to find ways to reduce the costs
of current operations."
Total revenues in 1997 were $42.0 billion, down 4 percent from $43.9
billion in 1996. Fourth quarter revenues of $10.3 billion were 10 percent
lower than 1996 fourth quarter revenues of $11.5 billion. Revenues for the
year declined on lower crude oil and refined product prices and lower U.S.
natural gas production. These factors were mitigated partially by increased
refined product sales volumes and higher natural gas prices.
Foreign currency gains included in net income were $231 million in 1997
compared with losses of $26 million in 1996. For the fourth quarter of 1997,
foreign currency gains were $190 million compared with currency losses of $12
million in the 1996 fourth quarter. The foreign currency gains for 1997
primarily occurred in the Caltex areas of operation.
-3-
<PAGE>
Exploration and Production
--------------------------
U.S. Exploration and Production
- -------------------------------
$ Millions Fourth Quarter Year
-------------- ---------------
1997 1996 1997 1996
---- ---- ----- -----
Operating Earnings 268 418 972 1,109
Special Items 51 (30) 83 (22)
--- --- ----- -----
Net Earnings 319 388 1,055 1,087
=== === ===== =====
U.S. exploration and production earnings declined for the year and fourth
quarter mainly due to lower crude oil prices and higher exploration expenses.
For the year, the company's average crude oil realization of $17.68 per barrel
was $1.12 lower than the $18.80 averaged for 1996. In the fourth quarter,
average realizations were $17.26, down by more than $4.00 from $21.32 per
barrel in the prior-year quarter. Average natural gas prices increased $0.14
to $2.42 per thousand cubic feet for the year and increased $.09 to $2.77 per
thousand cubic feet in the fourth quarter, from comparable 1996 periods.
Net liquids production for the year averaged 343,000 barrels per day, up
from 341,000 in 1996. Fourth quarter 1997 production also averaged 343,000
barrels per day, which was flat compared with the prior-year fourth quarter.
Net natural gas production in 1997 averaged 1.849 billion cubic feet per day,
down about 1 percent from 1996. For the 1997 fourth quarter, natural gas
production averaged 1.779 billion cubic feet per day, down from 1.940 billion
in the year-earlier quarter, primarily reflecting normal field declines and
property sales.
Special items in the fourth quarter 1997 included net gains on producing
property sales, offset partially by charges for asset write-downs, and
litigation and severance provisions. Earnings for the year also included gains
from the sales of producing properties earlier in the year, partially offset by
provisions for environmental remediation and the cost of the company's employee
performance stock option program.
International Exploration and Production
- ----------------------------------------
$ Millions Fourth Quarter Year
-------------- ---------------
1997 1996 1997 1996
---- ---- ----- -----
Operating Earnings 265 333 1,197 1,142
Special Items (4) 76 55 69
---- ---- ----- -----
Net Earnings 261 409 1,252 1,211
==== ==== ===== =====
Strong international upstream earnings reflected higher crude oil sales
volumes. For the year 1997, net liquids production increased 4 percent to
731,000 barrels per day. Kazakhstan, Nigeria and Congo were the principal
sources of the increase. Fourth quarter 1997 liquids production was up 1
percent to 743,000 barrels per day compared with the 1996 quarter. The fourth
quarter 1997 increase was mitigated by lower production from Tengiz, due to
maintenance and debottlenecking activities. Net natural gas production
decreased about 1 percent for the year to 576 million cubic feet per day in
1997 and decreased about 9 percent to 567 million cubic feet per day in the
1997 fourth quarter. Net natural gas production declines for the year and
quarter occurred in Canada, Kazakhstan, the U.K. and Indonesia. Partially
offsetting these declines was initial commercial natural gas production in
Nigeria, where the Escravos Natural Gas Project began operation in 1997.
-4-
<PAGE>
For the eighth consecutive year net production and proved reserves
increased, reflecting the company's success in its strategy to grow
international operations. In 1997, the company estimates it replaced about 110
percent of its international oil and gas production through additions to proved
reserves. Further production increases are expected in 1998 as new
developments come on stream in West Africa; offshore Canada where the Hibernia
oil field began production in November 1997; and from continued expansion of
the Tengiz field in Kazakhstan.
The special item included in 1997 fourth quarter income was a charge for a
prior-year tax settlement. For the year, net income included the benefits from
gains on asset sales and a net favorable prior-year tax settlement, partially
offset by a charge for the cost of the employee performance stock option
program.
Earnings for the year 1997 and fourth quarter 1997 included net foreign
exchange gains of $77 million and $43 million, respectively. Earnings for the
comparable periods in 1996 included net foreign exchange losses of $27 million
and $22 million. These earnings impacts primarily reflected currency rate
swings of the U.S. dollar relative to the Australian dollar and the British
pound.
Refining and Marketing
----------------------
U.S. Refining and Marketing
- ---------------------------
$ Millions Fourth Quarter Year
-------------- --------------
1997 1996 1997 1996
---- ---- ---- ----
Operating Earnings (Loss) 174 (28) 662 290
Special Items (18) (60) (61) (97)
---- ---- ---- ----
Net Earnings (Loss) 156 (88) 601 193
==== ==== ==== ====
Operating earnings for U.S. refining and marketing in 1997 were the highest
since 1988. The significant improvement in earnings compared with the same
periods for 1996 was driven by higher demand for refined products and improved
sales margins, reflecting both lower crude oil costs and lower operating
expenses.
Refined product sales volumes increased by 6 percent to 1,193,000 barrels
per day in 1997; fourth quarter 1997 volumes increased by 3 percent to
1,164,000 barrels per day. Most of this increase reflects higher gasoline
sales volumes in both 1997 periods.
For 1997, U.S. refined product sales realizations declined about $1.00, or 3
percent, to $28.93 per barrel. Fourth quarter realizations declined about 7
percent compared with the 1996 quarter.
Fourth quarter 1997 net income included special charges arising from the
disposition of three domestic tankers. Additionally, special items for the
year 1997 included provisions for environmental remediation, a litigation issue
and the cost of the company's employee performance stock option program.
International Refining and Marketing
- ------------------------------------
$ Millions Fourth Quarter Year
-------------- --------------
1997 1996 1997 1996
---- ---- ---- ----
Operating Earnings 133 29 367 167
Special Items 6 (201) (69) 59
---- ---- ---- ----
Net Earnings (Loss) 139 (172) 298 226
==== ==== ==== ====
-5-
<PAGE>
International refining and marketing operational earnings increased
significantly for the fourth quarter and year 1997 relative to the same 1996
periods. The higher 1997 earnings were largely attributable to Caltex,
Chevron's 50-percent owned affiliate, and reflected currency gains of $162
million for the year and $143 million for the quarter, as Asian currencies
generally weakened against the U.S. dollar. The largest currency impact was in
Korea, as a result of local tax benefits on currency losses from U.S. dollar-
denominated liabilities.
Partially offsetting Caltex's currency gains were inventory valuation losses
associated with the recent decline in crude oil prices and higher provisions
for the uncollectibility of receivables in Asia, totaling about $50 million.
Absent these effects, Caltex's operations were approximately break-even in the
fourth quarter 1997, as higher local currency costs for crude oil were not
immediately recoverable in the marketplace. Caltex's annual earnings,
excluding the above-mentioned effects, increased as margins in certain of its
major markets improved from last year's depressed levels.
Effective October 1, 1997, Caltex changed the functional currency of its
Korean and Japanese affiliates to the U.S. dollar. International refining
and marketing earnings included foreign exchange gains (including the company's
share of Caltex's gains) of $154 million and $151 million for 1997 and the
fourth quarter 1997, respectively. Earnings for 1996 included foreign exchange
losses of $17 million, while earnings for the fourth quarter 1996 included
gains of $5 million.
During the fourth quarter 1997, the company withdrew from the U.K. refining
and marketing business. Excluding the sales from this discontinued business,
refined product sales volumes declined by 6 percent to 783,000 barrels per day
in 1997. For the fourth quarter 1997, sales volumes declined by 2 percent to
815,000 barrels per day compared with sales for the same period in 1996.
Earnings for international refining and marketing in the fourth quarter
1997 included special item gains of $6 million from last-in first-out (LIFO)
inventory adjustments, mostly from Caltex operations. For the year 1997,
earnings also included a third quarter 1997 special charge for the company's
withdrawal from the U.K. refining and marketing business and second quarter
1997 charges for the cost of the employee performance stock option program. In
the fourth quarter 1996, special items included a charge related to the then-
expected merger of the company's United Kingdom refining and marketing
operations with two other oil companies.
Chemicals
---------
Chemicals Fourth Quarter Year
- --------- -------------- --------------
$ Millions 1997 1996 1997 1996
---- ---- ---- ----
Operating Earnings 41 36 224 228
Special Items 22 - 4 (28)
---- ---- ---- ----
Net Earnings 63 36 228 200
==== ==== ==== ====
Operating earnings for the year 1997 were nearly flat with those of 1996.
Earnings for 1997 benefited from reduced depreciation expense, as a result of a
reassessment of the useful lives of certain assets. This benefit was offset
partially by higher operating expenses, related to maintenance and expansion
activities during the year. Earnings for 1996 benefited from a non-recurring
receipt of insurance proceeds.
-6-
<PAGE>
Fourth quarter 1997 net income included benefits from special items,
primarily gains from the sale of an equity interest in a European chemical
company. This gain was partially offset by losses from a partial shutdown of
certain U.S chemical manufacturing assets and an unfavorable LIFO inventory
adjustment.
Coal and Other Minerals
-----------------------
Coal and other minerals Fourth Quarter Year
- ------------------------ -------------- --------------
$ Millions 1997 1996 1997 1996
---- ---- ---- ----
Operating Earnings 11 10 50 48
Special Items - 1 (2) (2)
---- ---- ---- ----
Net Earnings 11 11 48 46
==== ==== ==== ====
Coal earnings increased slightly in 1997, primarily due to higher equity
affiliate earnings.
Corporate and Other
-------------------
Corporate and other Fourth Quarter Year
- ------------------- -------------- --------------
$ Millions 1997 1996 1997 1996
---- ---- ---- ----
Operating Charges, Net (85) (113) (292) (333)
Special Items 65 (7) 120 (23)
---- ---- ---- ----
Net Charges (20) (120) (172) (356)
==== ==== ==== ====
Corporate and other operating charges declined by $41 million in 1997, as a
result of lower interest expense on reduced debt levels combined with higher
interest income and lower insurance costs.
The benefits of special items in the fourth quarter 1997 were due primarily
to favorable prior-year tax adjustments. In addition, special items for the
year included an additional prior-year tax adjustment, along with charges for
the write-down of certain telecommunications equipment and the cost of the
employee performance stock option program.
Capital and Exploratory Expenditures
------------------------------------
Capital and exploratory expenditures, including the company's share of
affiliates' expenditures, were $5.541 billion for the year 1997, compared with
$4.840 billion spent in 1996. Fourth quarter expenditures were $1.740 billion
and $1.591 billion in 1997 and 1996, respectively. In 1997, exploration and
production spending totaled $3.586 billion, of which 54 percent was spent in
international areas.
The company recently announced its 1998 capital and exploratory budget at a
record $6.3 billion, a 14 percent increase from 1997 expenditures. About 63
percent of the total capital program, or nearly $4.0 billion, is earmarked for
worldwide exploration and production. Consistent with the company's strategy
to expand its international exploration and production business, about $2.5
billion of these expenditures will be made outside of the United States.
-7-
<PAGE>
CHEVRON CORPORATION - FINANCIAL REVIEW -1-
(MILLIONS OF DOLLARS)
CONSOLIDATED STATEMENT OF INCOME
- --------------------------------
(unaudited)
Fourth Quarter Twelve Months
------------------- -----------------
REVENUES: 1997 1996 1997 1996
------- -------- ------- -------
Sales and Other Operating Revenues (1) $ 9,712 $ 11,265 $ 40,583 $ 42,782
Income from Equity Affiliates 207 81 742 767
Other Income 390 165 679 344
------- -------- ------- -------
10,309 11,511 42,004 43,893
------- -------- ------- -------
COSTS AND OTHER DEDUCTIONS:
Purchased Crude Oil and Products 4,599 6,109 20,223 22,826
Operating Expenses 1,303 1,719 5,280 6,007
Selling and Administrative Expenses 496 334 1,533 1,377
Exploration Expenses 205 126 493 455
Depreciation, Depletion and Amortization 657 603 2,300 2,216
Taxes Other Than on Income (1) 1,512 1,550 6,307 5,908
Interest and Debt Expense 85 90 312 364
------- ------- ------- -------
8,857 10,531 36,448 39,153
------- ------- ------- -------
Income Before Income Tax Expense 1,452 980 5,556 4,740
Income Tax Expense 523 516 2,246 2,133
------- ------- ------- -------
NET INCOME $ 929 $ 464 $ 3,310 $ 2,607
======= ======= ======= =======
PER SHARE AMOUNTS
Earnings - Basic $ 1.41 $ .71 $ 5.05 $ 3.99
Earnings - Diluted $ 1.41 $ .71 $ 5.03 $ 3.98
Dividends $ .58 $ .54 $ 2.28 $ 2.08
Average Common Shares
Outstanding (000's) 656,953 653,019 654,991 652,769
EARNINGS BY MAJOR OPERATING AREA
- --------------------------------
(unaudited) Fourth Quarter Twelve Months
----------------- ----------------
1997 1996 1997 1996
------- ------- ------- ------
Exploration and Production
United States $ 319 $ 388 $ 1,055 $ 1,087
International 261 409 1,252 1,211
------- ------- ------ ------
Total Exploration and Production 580 797 2,307 2,298
------- ------- ------ ------
Refining, Marketing and Transportation
United States 156 (88) 601 193
International 139 (172) 298 226
------- ------- ------ ------
Total Refining, Marketing
and Transportation 295 (260) 899 419
------- ------ ------ -------
Total Petroleum Operations 875 537 3,206 2,717
Chemicals 63 36 228 200
Coal and Other Minerals 11 11 48 46
Corporate and Other (2) (20) (120) (172) (356)
------- ------ ------ ------
NET INCOME $ 929 $ 464 $ 3,310 $ 2,607
======= ====== ====== ======
(1) Includes consumer excise taxes $ 1,326 $ 1,357 $ 5,574 $ 5,202
(2) Corporate and Other includes interest expense, interest income on
cash and marketable securities, corporate center costs, and real estate
and insurance activities.
<PAGE>
CHEVRON CORPORATION - FINANCIAL REVIEW -2-
(MILLIONS OF DOLLARS)
SPECIAL ITEMS BY MAJOR OPERATING AREA Fourth Quarter Twelve Months
- ------------------------------------- ----------------- ---------------
(unaudited) 1997 1996 1997 1996
------- ------- ------- -----
U.S. Exploration and Production $ 51 $ (30) $ 83 $ (22)
International Exploration and Production (4) 76 55 69
U.S. Refining, Marketing
and Transportation (18) (60) (61) (97)
International Refining, Marketing
and Transportation 6 (201) (69) 59
Chemicals 22 - 4 (28)
Coal and Other Minerals - 1 (2) (2)
Corporate and Other * 65 (7) 120 (23)
------- ------- ------- -----
Total Special Items $ 122 $ (221) $ 130 $ (44)
======= ======= ======= =====
SUMMARY OF SPECIAL ITEMS Fourth Quarter Twelve Months
- ------------------------ ------------------ ---------------
(unaudited) 1997 1996 1997 1996
------- ------- ------- -----
Asset Dispositions $ 156 $ 95 $ 183 $ 391
Asset Write-offs and Revaluations (78) (289) (86) (337)
Environmental Remediation Provisions - (1) (35) (54)
Prior-Year Tax Adjustments 54 - 152 52
Restructurings & Reorganizations (6) 3 (6) (14)
LIFO Inventory (Losses) Gains 5 (4) 5 (4)
Other, Net (9) (25) (83) (78)
------ ------- -------- -----
Total Special Items $ 122 $ (221) $ 130 $ (44)
======= ======= ======= =====
FOREIGN EXCHANGE GAINS (LOSSES) $ 190 $ (12) $ 231 $ (26)
- ------------------------------
EARNINGS BY MAJOR OPERATING AREA
EXCLUDING SPECIAL ITEMS
- --------------------------------
(unaudited) Fourth Quarter Twelve Months
----------------- ----------------
1997 1996 1997 1996
------- ------- ------- ------
Exploration and Production
United States $ 268 $ 418 $ 972 $ 1,109
International 265 333 1,197 1,142
------- ------- ------ ------
Total Exploration and Production 533 751 2,169 2,251
------- ------- ------ ------
Refining, Marketing and Transportation
United States 174 (28) 662 290
International 133 29 367 167
------- ------- ------- ------
Total Refining, Marketing
and Transportation 307 1 1,029 457
------- ------- ------- ------
Total Petroleum Operations 840 752 3,198 2,708
Chemicals 41 36 224 228
Coal and Other Minerals 11 10 50 48
Corporate and Other * (85) (113) (292) (333)
------- ------- ------- ------
Earnings Excluding Special Items 807 685 3,180 2,651
Special Items 122 (221) 130 (44)
------- ------- ------- ------
Net Income $ 929 $ 464 $ 3,310 $ 2,607
======= ======= ======= ======
* "Corporate and Other" includes interest expense, interest income on
cash and marketable securities, corporate center costs, and real estate
and insurance activities.
<PAGE>
CHEVRON CORPORATION - FINANCIAL REVIEW -3-
OPERATING STATISTICS (1) Fourth Quarter Twelve Months
- -------------------- --------------- --------------
1997 1996 1997 1996
---- ---- ---- ----
NET LIQUIDS PRODUCTION (MB/D):
United States 343 343 343 341
International 743 735 731 702
----- ----- ----- -----
Worldwide 1,086 1,078 1,074 1,043
===== ===== ===== =====
NET NATURAL GAS PRODUCTION (MMCF/D):
United States 1,779 1,940 1,849 1,875
International 567 625 576 584
----- ----- ----- -----
Worldwide 2,346 2,565 2,425 2,459
===== ===== ===== =====
SALES OF NATURAL GAS LIQUIDS (MB/D):
United States 151 124 132 187
International 45 3 43 36
----- ------ ----- -----
Worldwide 196 162 175 223
===== ====== ===== =====
SALES OF REFINED PRODUCTS (MB/D):
United States 1,164 1,127 1,193 1,122
International 889 934 886 944
----- ----- ----- -----
Worldwide 2,053 2,061 2,079 2,066
===== ===== ===== =====
REFINERY INPUT (MB/D):
United States 933 942 933 951
International 556 524 565 537
----- ----- ----- -----
Worldwide 1,489 1,466 1,498 1,488
===== ===== ===== =====
CHEMICALS SALES & OTHER OPERATING
REVENUES (millions of dollars) (2)
United States $ 742 $ 718 $ 3,045 $ 2,936
International 155 147 588 605
----- ----- ----- -----
Worldwide $ 897 $ 865 $ 3,633 $ 3,541
===== ===== ===== =====
(1) Includes interest in affiliates
(2) Includes sales to other Chevron companies
