Upstream earnings of $6.9 billion increase $2.3 billion on higher prices for crude oil
SAN RAMON, Calif., July 29, 2011 – Chevron Corporation (NYSE: CVX) today reported earnings of $7.7 billion ($3.85 per share – diluted) for the second quarter 2011, compared with $5.4 billion ($2.70 per share – diluted) in the 2010 second quarter.
Sales and other operating revenues in the second quarter 2011 were $67 billion, up from $51 billion in the year-ago period, mainly due to higher prices for crude oil and refined products.

Earnings Summary
Three Months Ended June 30 Six Months Ended June 30
Millions of dollars 2011 2010 2011 2010
Earnings by Business Segment
Upstream $6,871 $4,542 $12,848 $9,266
Downstream 1,044 975 1,666 1,171
All Other (183) (108) (571) (476)
Total (1)(2) $7,732 $5,409 $13,943$9,961
(1) Includes foreign currency effects $(81) $241
$(245) $43
(2) Net income attributable to Chevron Corporation (See Attachment 1)

“Our second quarter financial performance was very strong,” said Chairman and CEO John Watson. “Earnings gains versus last year’s quarter were primarily in our oil and gas exploration and production business, resulting from higher crude oil prices on world markets.”
Watson commented, “We continued to advance our major capital projects, resumed important exploration and development drilling activity in the deepwater Gulf of Mexico and acquired new upstream resource opportunities in the second quarter.” These achievements include:
• Kazakhstan/Russia – Marked the start of the construction phase for expansion of the Caspian Pipeline Consortium’s pipeline, which carries crude oil from western Kazakhstan to a dedicated terminal on the Black Sea. The design capacity of the pipeline will increase to 1.4 million barrels per day from its current capacity of 730,000 barrels per day. The project is “Our second quarter financial performance was very strong,” said Chairman and CEO John Watson. “Earnings gains versus last year’s quarter were primarily in our oil and gas exploration and production business, resulting from higher crude oil prices on world markets.”
Watson commented, “We continued to advance our major capital projects, resumed important exploration and development drilling activity in the deepwater Gulf of Mexico and acquired new upstream resource opportunities in the second quarter.” These achievements include:
• Kazakhstan/Russia – Marked the start of the construction phase for expansion of the Caspian Pipeline Consortium’s pipeline, which carries crude oil from western Kazakhstan to a dedicated terminal on the Black Sea. The design capacity of the pipeline will increase to 1.4 million barrels per day from its current capacity of 730,000 barrels per day. The project isplanned to be implemented in three phases, with capacity increasing progressively from 2012 to 2015.
• Australia – Received recommendation of conditional environmental approval for the Wheatstone liquefied natural gas (LNG) project from Western Australia’s Environmental Protection Authority. The company will continue negotiations to finalize the permit conditions as it works toward a final investment decision on the project in the second half of this year.
• Australia – Signed binding Sales and Purchase Agreements with Tokyo Electric for Wheatstone LNG.
• Bulgaria – Awarded an exploration permit for a prospective shale gas block of more than 1 million acres in northeastern Bulgaria.
• United States – Returned to work in the Gulf of Mexico with three rigs active in the deepwater, drilling the Moccasin exploration well, the Buckskin appraisal well and the Tahiti 2 development program. The company is also drilling on the Gulf of Mexico Shelf to test the ultra-deep gas play.
• United States – Acquired additional acreage in the Marcellus Shale, including from Chief Oil and Gas LLC and Tug Hill, Inc., primarily in Pennsylvania.
“We reached an important milestone in streamlining our downstream asset portfolio with receipt of government approval for the planned sale of our refining and marketing assets in the United Kingdom and Ireland,” Watson added. The sale is expected to close in the third quarter. The company also completed the sale of its fuels-marketing and aviation businesses in three Central American countries in the second quarter 2011, as well as other assets in China and North America.
The company purchased $1 billion of its common stock in the second quarter 2011 under its share repurchase program.
UPSTREAM
Worldwide net oil-equivalent production was 2.69 million barrels per day in the second quarter 2011, down from 2.75 million barrels per day in the 2010 second quarter. Production increases from project ramp-ups in Canada and the United States and new volumes stemming from the acquisition of Atlas Energy, Inc. were more than offset by an approximately 40,000 barrels per day negative effect of higher prices on volumes related to cost-recovery and variable-royalty contract terms, and normal field declines.

U.S. Upstream
Three Months Ended June 30 Six Months Ended June 30
Millions of Dollars 2011 2010 2011 2010
Earnings $1,950 $1,090 $3,399 $2,246

U.S. upstream earnings of $1.95 billion in the second quarter 2011 were up $860 million from a year earlier. The benefit of higher crude oil realizations was partly offset by higher operating expenses.
The company’s average sales price per barrel of crude oil and natural gas liquids was $104 in the second quarter 2011, compared with $71 a year ago. The average sales price of natural gas was $4.35 per thousand cubic feet, up from $4.01 in last year’s second quarter.
Net oil-equivalent production of 694,000 barrels per day in the second quarter 2011 was down 2 percent, or 14,000 barrels per day, from a year earlier. The decrease in production was associated with normal field declines and maintenance-related downtime. Partially offsetting this decrease was production from the acquisition of Atlas Energy, Inc. and increases at Perdido in the Gulf of Mexico. The net liquids component of oil-equivalent production decreased 2 percent in the 2011 second quarter to 478,000 barrels per day, while net natural gas production declined 1 percent to 1.30 billion cubic feet per day.
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