EXHIBIT 99.1
TEXACO REPORTS THIRD QUARTER 2000 RESULTs
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FOR IMMEDIATE RELEASE: TUESDAY, OCTOBER 24, 2000.
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WHITE PLAINS, N.Y., Oct. 24, 2000 -- Texaco reported today third quarter
2000 income before special items of $815 million ($1.49 per share). Net income
for the period was $798 million ($1.46 per share).
<TABLE>
<CAPTION>
EARNINGS SUMMARY
Third Quarter Nine Months
------------- ---------------
2000 1999 2000 1999
----------------------------------------------------------------------
<S> <C> <C> <C> <C>
Income before
special items
(millions) $ 815 $ 453 $ 2,058 $ 844
Per share $ 1.49 $ 0.83 $ 3.76 $ 1.53
Net income
(millions) $ 798 $ 387 $ 1,997 $ 859
Per share $ 1.46 $ 0.71 $ 3.65 $ 1.56
----------------------------------------------------------------------
</TABLE>
Chairman and Chief Executive Officer Peter I. Bijur commented, "We
posted record earnings in the third quarter, due largely to sharply
higher worldwide crude oil and U.S. natural gas prices, which greatly
benefited our upstream operations. These higher prices were a result
of several market factors, including increased global demand. Also
contributing to upstream results was production from the Petronius
field in the Gulf of Mexico which started-up in July. In the
downstream, marketing margins, especially in the Caltex area, remained
under pressure as higher crude oil costs could not be fully recovered
in the marketplace."
Bijur added, "Our capital and exploratory spending rose $600
million this year as we continued to invest in major upstream
development projects and in alternate energy and power projects. In
Nigeria, the successful Ekoli-1 exploration well recently confirmed
the extension of Texaco's Agbami oil discovery on block 216 into the
adjacent block 217."
Commenting on the recently announced merger between Texaco and
Chevron, Bijur said, "The two companies are natural partners. The
merger will create a U.S.-based global enterprise that is highly
competitive across all energy sectors."
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<TABLE>
<CAPTION>
Third Quarter Nine Months
------------- ---------------
Texaco Inc. 2000 1999 2000 1999
(Millions of dollars):
----------------------------------------------------------------------
<S> <C> <C> <C> <C>
Income before special items $ 815 $ 453 $2,058 $ 844
------ ------ ------ ------
Net losses on major
asset sales (12) (80) (77) (135)
Tax issues - - 46 65
Inventory valuation
adjustments - 14 - 152
Employee benefits revision - - 18 -
Litigation and
environmental issues (5) - (22) -
Reorganization, restructuring
and employee separation
costs - - (12) (67)
Net loss on Erskine pipeline - - (14) -
------ ------ ------ ------
Special items (17) (66) (61) 15
------ ------ ------ ------
Net income $ 798 $ 387 $1,997 $ 859
====== ====== ====== ======
<FN>
Details on special items are included in the following segment information.
</FN>
</TABLE>
OPERATING RESULTS
EXPLORATION AND PRODUCTION
<TABLE>
<CAPTION>
Third Quarter Nine Months
------------- ---------------
United States
(Millions of dollars): 2000 1999 2000 1999
----------------------------------------------------------------------
<S> <C> <C> <C> <C>
Operating income before
special items $ 487 $ 258 $1,241 $ 423
Special items (8) - (115) 21
------ ------ ------ ------
Total operating income $ 479 $ 258 $1,126 $ 444
====== ====== ====== ======
</TABLE>
U.S. Exploration and Production earnings for the third quarter and
first nine months of 2000 were significantly higher than last year due
to higher crude oil and natural gas prices. World crude oil prices
were exceptionally strong during the third quarter. Despite production
increases by OPEC members, concerns over low global inventories of
both crude oil and refined products helped push crude oil prices to
their highest levels since the Gulf War in 1991. The spot price of WTI
crude oil averaged $31.66 per barrel during the third quarter, nearly
$10.00 per barrel higher than in 1999.
Texaco's realized crude oil prices for the third quarter and first
nine months of 2000 were $28.11 and $25.79 per barrel, 69 percent and
101 percent higher than last year. U.S. natural gas prices also rose
to record levels during the quarter, as low storage levels and
continued strong demand exceeded the modest recovery in domestic
production. For the third quarter and first nine months of 2000,
Texaco's
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average realized natural gas prices were $4.01 and $3.23 per
MCF, 64 percent and 55 percent above last year.
Daily production decreased for both the third quarter and year.
This expected reduction was due to the sale of non-core producing
properties and natural field declines. First production from our
Petronius project in the Gulf of Mexico began in July and is expected
to average about 12,000 BOE per day in the fourth quarter. During the
third quarter, we received $61 million from the sale of non-core
producing properties, bringing our total cash proceeds for nine months
2000 to $391 million.
Operating expenses increased this year as higher crude oil and
natural gas prices led to significantly higher utilities expenses and
production taxes. Exploratory expenses for the third quarter were $29
million before tax, $17 million higher than last year due to increased
activity in the Gulf of Mexico. Exploratory expenses for the first
nine months of 2000 were $70 million before tax, $34 million lower
than last year, reflecting reduced activities.
Results for the first nine months of 2000 included special charges
of $115 million, including $8 million in the third quarter, for net
losses on the sales of non-core producing properties. Results for 1999
included a special gain of $21 million for the sale of our interest in
several California fields, a special benefit of $11 million for a
production tax refund and a special charge of $11 million for employee
separation costs.
<TABLE>
<CAPTION>
Third Quarter Nine Months
------------- ---------------
International
(Millions of dollars): 2000 1999 2000 1999
----------------------------------------------------------------------
<S> <C> <C> <C> <C>
Operating income before
special items $ 299 $ 129 $ 787 $ 191
Special items (4) - 62 (2)
------ ------ ------ ------
Total operating income $ 295 $ 129 $ 849 $ 189
====== ====== ====== ======
</TABLE>
International Exploration and Production operating results for the
third quarter and first nine months of 2000 were considerably higher
than last year due mostly to higher crude oil prices. Market
conditions have continued to keep crude oil prices strong throughout
the first nine months despite OPEC actions to increase production. Our
realized crude oil prices for the third quarter and nine months 2000
were $26.69 and $24.60 per barrel, 57 percent and 84 percent higher
than last year. Average natural gas prices were $1.58 per MCF for the
third quarter and $1.50 per MCF for the first nine months, 17 percent
and 10 percent above last year.
Daily production decreased six percent for the third quarter and
nine months 2000 due to scheduled maintenance and repairs in our U.K.
North Sea operations, lower lifting entitlements for cost recovery in
Indonesia as a result of higher crude oil prices and the planned sale
of non-core producing
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properties. Production in the Partitioned Neutral Zone and the Karachaganak
field in the Republic of Kazakhstan continues to be above last year's levels.
We have received cash proceeds of $137 million from the sale of non-core
producing properties this year.
Operating expenses for the third quarter were flat with last year,
while expenses for the first nine months decreased slightly.
Exploratory expenses for the third quarter were $77 million before
tax, slightly higher than last year. Exploratory expenses for the
first nine months were $149 million before tax, $29 million lower than
last year which included an unsuccessful exploratory well in a new
offshore area of Trinidad.
Results for the third quarter of 2000 included a special charge of
$4 million for net losses on the sale of non-core producing
properties. Results for 2000 also included a special benefit of $80
million for net gains on the sale of non-core producing properties and
a special charge of $14 million for net losses resulting from the
Erskine pipeline interruption in the U.K. North Sea recorded earlier
in the year. Results for 1999 included a special charge of $2 million
for employee separation costs.
<TABLE>
<CAPTION>
REFINING, MARKETING AND DISTRIBUTION
Third Quarter Nine Months
--------------- ---------------
United States
(Millions of dollars): 2000 1999 2000 1999
----------------------------------------------------------------------
<S> <C> <C> <C> <C>
Operating income before
special items $ 82 $ 118 $ 175 $ 283
Special items (5) - (35) (79)
------ ------ ------ -----
Total operating income $ 77 $ 118 $ 140 $ 204
====== ====== ====== =====
</TABLE>
U.S. Refining, Marketing and Distribution earnings were lower than
last year for both the third quarter and the first nine months.
Equilon's earnings declined from last year due to depressed
marketing margins as pump prices lagged increases in supply costs in a
very competitive market. Weak lubricant margins as a result of higher
base oil costs also negatively impacted earnings. Maintenance activity
at the Puget Sound, Martinez and Wood River refineries adversely
impacted results for both years.
Compared to last year, Motiva's results benefited from improved
East and Gulf Coast refining margins as a result of lower gasoline and
distillate inventories due to industry refinery downtime. Maintenance
activities earlier this year at the Delaware City and Port Arthur
refineries adversely impacted results. While refining results
improved, marketing margins were negatively impacted by higher supply
costs, which were not fully recovered in the market, and by lower
branded gasoline sales volumes.
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Results for the third quarter of 2000 included a $5 million
special charge for environmental issues. Additionally, results for
2000 included special charges of $31 million for the loss on the sale
of the Wood River refinery and $17 million for a patent litigation
issue and a special gain of $18 million for an employee benefits
revision. Results for 1999 included special charges of $76 million for
losses on refinery asset sales and $11 million for employee separation
costs and a special benefit of $8 million for inventory valuation
adjustments.
<TABLE>
<CAPTION>
Third Quarter Nine Months
------------- ---------------
International
(Millions of dollars): 2000 1999 2000 1999
----------------------------------------------------------------------
<S> <C> <C> <C> <C>
Operating income before
special items $ 61 $ 72 $ 214 $ 293
Special items - (66) (12) 84
------ ----- ------ ------
Total operating income $ 61 $ 6 $ 202 $ 377
===== ===== ====== ======
</TABLE>
International Refining and Marketing earnings before special items
for the third quarter of 2000 decreased from last year. Marketing
results declined from lower margins in the Caltex area, Europe and
Latin America. Refining results improved dramatically in Europe from
higher margins in the U.K. and the Netherlands, but decreased in Latin
America due to increased crude costs.
Results for the first nine months of 2000 declined due to weak
marketing margins from increased costs and highly competitive market
conditions in the Caltex region, Latin America, West Africa and
Europe. Lower volumes impacted Latin America and West Africa. Refining
results were mixed as European and Asian margins improved, while the
inability to fully recover increased crude costs negatively impacted
refining margins in Panama and Guatemala. Rising utility costs
negatively impacted refining results in all areas.
Results for 2000 included first quarter special charges of $12
million for employee separation costs. Results for the third quarter
of 1999 included net special charges of $66 million. These net charges
included $32 million for our share of Caltex' loss on the sale of its
equity interest in Koa Oil Co., Ltd. and $48 million for related
deferred currency translation amounts plus favorable inventory
valuation adjustments of $14 million. Additionally, results for 1999
included special benefits of $130 million for favorable inventory
valuation adjustments and $54 million for a Korean tax benefit, as
well as restructuring charges in Caltex of $25 million and employee
separation costs in Europe and Latin America of $9 million.
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GLOBAL GAS AND POWER
<TABLE>
<CAPTION>
Third Quarter Nine Months
------------- ---------------
(Millions of dollars): 2000 1999 2000 1999
----------------------------------------------------------------------
<S> <C> <C> <C> <C>
Operating income before
special items $ 13 $ 6 $ 33 $ 16
Special items - - - (3)
----- ---- ----- -----
Total operating income $ 13 $ 6 $ 33 $ 13
===== ==== ===== =====
</TABLE>
Operating results for 2000 benefited from the recovery of natural
gas liquids prices. Results for the first nine months of 1999 included
gains from several asset sales, including a gas gathering pipeline in
the U.S. and our 50 percent interest in a U.K. retail gas marketing
venture.
Results for 1999 included a special charge of $3 million for
employee separation costs.
CORPORATE/NON-OPERATING RESULTS
<TABLE>
<CAPTION>
Third Quarter Nine Months
------------- ---------------
(Millions of dollars): 2000 1999 2000 1999
----------------------------------------------------------------------
<S> <C> <C> <C> <C>
Results before
special items $ (123) $ (129) $ (386) $ (359)
Special items - - 39 (6)
------ ------ ------ ------
Total corporate/non-operating $ (123) $ (129) $ (347) $ (365)
====== ====== ====== ======
</TABLE>
Corporate and non-operating expenses before special items for the
third quarter and first nine months of 2000 included lower interest
and higher corporate expenses, including spending for our Olympic
sponsorship program. Results for the first nine months of 1999
benefited from a $21 million gain on the sale of marketable securities
earlier in the year.
Results for 2000 included a special benefit of $46 million for
favorable income tax settlements and a special charge of $7 million
for early extinguishment of debt associated with the anticipated sale
of an offshore producing facility in the U.K. North Sea. Results for
1999 included a special charge of $6 million for employee separation
costs.
CAPITAL AND EXPLORATORY EXPENDITURES
Capital and exploratory expenditures were $2,803 million for the
first nine months of 2000, compared with $2,176 million for 1999.
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Total upstream expenditures increased by 36 percent as we
continued to focus on high impact projects. The international segment
of the upstream increased by 57 percent as investment continued in the
Malampaya natural gas project in the Philippines and the Karachaganak
field in Kazakhstan. In addition to these projects, spending continued
on the Captain B project in the U.K. North Sea and for development
work in Nigeria deepwater. In the United States spending increased six
percent. Expenditures in 2000 occurred in the Central and Permian
basin regions while 1999 spending focused on the Gemini project in the
deepwater Gulf of Mexico.
Expenditures for Global Gas and Power increased more than 95
percent in 2000. Contributing to this increase was the purchase of a
20 percent investment in Energy Conversion Devices, Inc. and the
development of a power project in Thailand. This project, in which
Texaco holds a 37.5 percent interest, became operational July 1, 2000
and is a "state of the art" power plant in Thailand. These initiatives
are representative of Texaco's continuing efforts to become a leader
in the development of energy technology.
In the United States downstream, refinery expenditures declined
with the sales of the El Dorado refinery in November of 1999 and the
Wood River refinery in June of 2000. In the international segment,
expenditures decreased due to the completion of a project at the
Pembroke refinery last year and lower spending in the U.K. marketing
segment in 2000.
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CONTACT: Andy Norman 914-253-4068
INVESTOR RELATIONS:
Elizabeth Smith 914-253-4478
Listen in live to Texaco's third quarter 2000 earnings discussion
with financial analysts on Tuesday, October 24th at 11:30 am EDT at:
http://www.webevents.broadcast.com/texaco/q300earnings
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For technical assistance, call Sheila Lujan at 800-366-9831
Note: This press release contains a number of forward-looking
statements within the meaning of the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. In particular,
statements made concerning Texaco's expected performance and financial
results in future periods are based upon Texaco's current expectations
and beliefs and are subject to a number of known and unknown risks and
uncertainties that could cause actual results to differ materially
from those described in the forward-looking statements. The following
factors known to Texaco, among others, could cause Texaco's actual
results to differ materially from those described in the
forward-looking statements: decreased demand for motor fuels, natural
gas and other products; worldwide and industry economic conditions;
inaccurate forecasts of crude oil, natural gas and petroleum product
prices and production; higher costs, expenses and interest rates; etc.
In addition, you are encouraged to review Texaco's latest reports
filed with the SEC, including Texaco's Annual Report on Form 10-K
filed with the SEC on March 24, 2000, which describes a number of
additional risks and uncertainties that could cause actual results to
vary materially from those listed in the forward-looking statements
made in this press release.
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<TABLE>
<CAPTION>
Income (loss) Third Quarter(a) Nine Months(a)
(Millions of dollars) ------------------ -----------------
2000 1999 2000 1999
------ ------ ------ ------
<S> <C> <C> <C> <C>
Exploration and production
United States $ 479 $ 258 $1,126 $ 444
International 295 129 849 189
----- ----- ------ -----
Total 774 387 1,975 633
Refining, marketing and
distribution
United States 77 118 140 204
International 61 6 202 377
----- ----- ------ -----
Total 138 124 342 581
Global gas and power 13 6 33 13
----- ----- ------ -----
Total operating segments 925 517 2,350 1,227
----- ----- ------ -----
Other business units (4) (1) (6) (3)
Corporate/Non-operating (123) (129) (347) (365)
----- ----- ------ -----
Net income $ 798 $ 387 $1,997 $ 859
===== ===== ====== =====
Net income per common share
(dollars) - diluted $1.46 $ .71 $ 3.65 $1.56
Average number of common shares
outstanding for computation of
earnings per share (millions)
- diluted 543.2 546.3 544.4 535.2
Provision for income taxes
included in net income $ 622 $ 386 $1,389 $ 493
<FN>
(a) Includes special items indicated in this release.
</FN>
</TABLE>
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<TABLE>
<CAPTION>
Other Financial Data Third Quarter Nine Months
(Millions of dollars) --------------- -----------------
2000 1999 2000 1999
------ ------ ------ ------
<S> <C> <C> <C> <C>
Revenues $13,359 $ 9,677 $36,699 $25,136
Total assets as
of September 30 $30,500(b) $28,778
Stockholders' equity
as of September 30 $13,150(b) $11,960
Total debt as
of September 30 $ 7,350(b) $ 7,291
Capital and exploratory
expenditures
Exploration and production
United States $ 277 $ 162 $ 661 $ 623
International 482 304 1,361 865
------- -------- --------- --------
Total 759 466 2,022 1,488
Refining, marketing and
distribution
United States 112 85 248 243
International 94 118 235 294
------- ------- -------- -------
Total 206 203 483 537
Global gas and power 68 43 252 129
------- ------- -------- -------
Total operating
segments 1,033 712 2,757 2,154
Other business units 1 6 46 22
------- ------- -------- -------
Total $ 1,034 $ 718 $ 2,803 $ 2,176
======= ======= ======== =======
Exploratory expenses
included above
United States $ 29 $ 12 $ 70 $ 104
International 77 60 149 178
------- ------- -------- -------
Total $ 106 $ 72 $ 219 $ 282
======= ======= ======== =======
Dividends paid to
common stockholders $ 244 $ 245 $ 733 $ 719
Dividends per
common share (dollars) $ .45 $ .45 $ 1.35 $ 1.35
Dividend requirements for
preferred stockholders $ 4 $ 3 $ 11 $ 26
<FN>
(b) Preliminary
</FN>
</TABLE>
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<CAPTION>
Operating Data Third Quarter Nine Months
--------------- -----------------
2000 1999 2000 1999
------ ------ ------ ------
Exploration and production
<S> <C> <C> <C> <C>
United States
Net production of
crude oil and
natural gas liquids
(MBPD) 338 395 360 400
Net production of
natural gas available
for sale (MMCFPD) 1,273 1,416 1,328 1,460
------ ------- ------- -------
Total net production
(MBOEPD) 550 631 581 643
Natural gas sales
(MMCFPD) 3,824 3,263 3,758 3,284
Average U.S. crude
(per bbl.) $28.11 $16.65 $25.79 $12.81
Average U.S. natural
gas (per mcf) $ 4.01 $ 2.44 $ 3.23 $ 2.09
Average WTI (Spot)
(per bbl.) $31.66 $21.71 $29.84 $17.58
Average Kern (Spot)
(per bbl.) $26.54 $15.38 $24.17 $11.49
International
Net production of
crude oil and natural
gas liquids (MBPD)
Europe 124 152 123 142
Indonesia 122 141 123 156
Partitioned Neutral
Zone 141 127 137 122
Other 60 60 64 65
------ ------- ------- -------
Total 447 480 447 485
Net production of
natural gas available
for sale (MMCFPD)
Europe 168 252 221 261
Colombia 183 161 193 158
Other 135 91 143 105
------ ------- ------- -------
Total 486 504 557 524
------ ------- ------- -------
Total net production
(MBOEPD) 528 564 540 573
Natural gas sales
(MMCFPD) 509 539 586 551
Average International
crude (per bbl.) $26.69 $16.96 $24.60 $13.36
Average International
natural gas (per mcf) $ 1.58 $ 1.35 $ 1.50 $ 1.36
Average U.K. natural
gas (per mcf) $ 2.57 $ 2.34 $ 2.39 $ 2.37
Average Colombia
natural gas (per mcf) $ 1.34 $ .67 $ 1.13 $ .64
Total worldwide net
production (MBOEPD) 1,078 1,195 1,121 1,216
</TABLE>
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<CAPTION>
Operating Data Third Quarter Nine Months
---------------- ------------------
2000 1999 2000 1999
------- ------- ------- -------
Refining, marketing and
distribution
<S> <C> <C> <C> <C>
United States
Refinery input (MBPD)
Equilon area 209 390 260 376
Motiva area 281 307 275 307
----- ----- ----- -----
Total 490 697 535 683
Refined product sales
(MBPD)
Equilon area 671 717 707 667
Motiva area 373 371 359 376
Other 285 290 306 296
----- ----- ----- -----
Total 1,329 1,378 1,372 1,339
International
Refinery input (MBPD)
Europe 355 331 368 356
Caltex area 348 381 352 411
Latin America/
West Africa 70 68 62 71
----- ----- ----- -----
Total 773 780 782 838
Refined product sales
(MBPD)
Europe 638 585 627 609
Caltex area 509 599 540 608
Latin America/
West Africa 499 479 471 485
Other 88 86 89 90
----- ----- ----- -----
Total 1,734 1,749 1,727 1,792
</TABLE>