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ChevronTexaco profit nearly doubles

ChevronTexaco Corp., the No. 2 U.S. energy company, on Friday said fourth-quarter earnings nearly doubled on soaring crude oil and natural gas prices.
/ Source: Reuters

ChevronTexaco Corp., the No. 2 U.S. energy company, on Friday said fourth-quarter earnings nearly doubled on soaring crude oil and natural gas prices.

The San Ramon, California, company reported net income of $1.74 billion, or $1.63 per share, up 92 percent compared with net income of $904 million, or 85 cents, in the year-earlier period.

The most recent results include a net one-time gain $89 million, which includes a $118 million tax benefit, offset by $171 million in foreign currency losses. A year earlier the company had $240 million in charges and currency losses.

Wall Street analysts on average had expected ChevronTexaco to post earnings of $1.56 a share, according to Reuters Research, a Reuters Group Plc. unit.

"ChevronTexaco has stabilized from the disappointments in the days following the merger, but they have a weak production profile," said Paul Sankey, an oil company analyst for Deutsche Bank in New York. "Still at $30 oil and $7 gas it's not a bad place to be."

Quarterly sales and other operating revenue rose 12 percent to $30.1 billion from a year earlier. Global tensions, rising demand and low inventories supported an 11 percent increase in benchmark oil prices and a 16 percent hike in gas prices.

Sankey said results from U.S. refining and marketing were disappointing, while international exploration and production did not benefit as expected from higher prices.

ChevronTexaco shares fell 56 cents, or less than 1 percent, to $86.75 in early trade Friday on the New York Stock Exchange.

Rising tide
Still unusually robust energy prices helped boost exploration and production earnings 14 percent to $848 million. However worldwide oil and gas production fell 2.6 percent to 2.5 million barrels from a year earlier amid declining output from older fields and a series of property sales.

ChevronTexaco international production also was hurt by civil unrest in Nigeria that disrupted operations

Contrary to expectations last year that oil prices would sink after the U.S. invasion of Iraq, disruptions, low inventories and OPEC quotas kept energy prices high all year. Traditionally ChevronTexaco earnings climb higher than its peers when commodity prices rise, analysts say.

For full year 2003, ChevronTexaco said it slashed capital and exploration spending to $7.4 billion from $9.3 billion, cuts made possible by its 2001 merger.

The company also reported adding 1 billion barrels of proved oil and gas reserves, or 108 percent of the volumes extracted last year. ChevronTexaco continues to seek buyers for properties in the United States and Canada.

Refining and marketing operations posted a $233 million profit in the quarter on improved margins, bouncing back from a year-earlier $166 million loss when margins were among the weakest in two decades.

The downstream segment also posted higher inventory-related gains than a year earlier and $23 million in gains from asset sales.

Profit from chemicals fell to $3 million from $13 million as lower results from its Oronite unit more than offset higher income from Chevron Phillips Chemical Co., its 50-50 joint venture with ConocoPhillips.