Chevron posts massive $3B loss in Q2

SAN RAMON, California and HOUSTON — While its announcement to acquire Noble Energy Inc. (Nasdaq: NBL) didn’t play a role, oil giant Chevron Corp. (NYSE: CVX) posted a giant loss of $3 billion in the previous quarter as COVID-19 continues to wreak havoc on fuel demand.

The driver of the losses for the San Ramon-based Chevron was its upstream operations that search for new sources of oil and gas and drill and operate new wells for extracting those commodities. That section of the company posted a $6.08 billion loss in the quarter, compared to a $3.48 billion gain in the same period last year. The last time it posted revenues this weak was in 1989.

“Given the uncertainties associated with economic recovery, and ample oil and gas supplies, we made a downward revision to our commodity price outlook that resulted in asset impairments and other charges,” CEO Michael Wirth said in a statement.

The company also erased $2.6 billion in value from its books for the quarter after the U.S. government sanctioned the entire country of Venezuela.

Chevon announced its plans to acquire Noble two weeks ago in a $5 billion all-stock deal, which if approved by shareholders and regulators would give it control over Weld County’s second-largest oil producer.

Analysts told BizWest at the time that the deal could pave the way for more oil and gas activity in the county once prices recover in 2021 or beyond, as Chevron would have more capital to deploy for new drilling or operations than Noble would as an independent company.

In an earnings call with analysts Friday morning, Chevron said it began integration meetings with Noble executives today for a “fast and straightforward” completion of the deal.

James Johnson, Chevron’s executive vice president of upstream, didn’t show any negativity toward the Noble acquisition and was upbeat about its potential to enter the Denver-Julesburg Basin.

“In Colorado, we’re excited to have an entry into the D-J with such long running room and good returns,” he said.

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