Chevron Corp.'s (CVX) first-quarter earnings more than doubled on higher oil and gas prices, increased production and better-than-expected refining results. Chevron's global output rose 5% to 2.78 million barrels of oil equivalent per day from a year ago mainly due to higher production from new projects in the U.S. Gulf of Mexico, Nigeria and Angola
Chevron Corp.'s (CVX) first-quarter earnings more than doubled on higher oil and gas prices, increased production and better-than-expected refining results.

Chevron's global output rose 5% to 2.78 million barrels of oil equivalent per day from a year ago mainly due to higher production from new projects in the U.S. Gulf of Mexico, Nigeria and Angola and expanded capacity at its Tengiz project in Kazakhstan . Chevron's earnings also benefited from the company's increase in production of oil, which has been trading at higher levels than natural gas.

Chevron, the third-largest U.S. oil company by market value, reported a profit of $4.55 billion, or $2.27 a share, up from $1.84 billion, or 92 cents, a year earlier. The latest period included 9 cents related to workforce reduction in the company's downstream business. Currency fluctuations reduced earnings by $198 million, compared with $54 million a year earlier. Revenue jumped 33% to $48.2 billion. Chevron topped analysts' expectations of $1.94 earnings per share.

A rebound in crude oil and natural gas prices has lifted earnings of major oil companies in the first quarter, marking the end of a period when profits were sharply hit by the recession's impact on consumer and industrial demand. A day earlier, Exxon Mobil Corp. (XOM), ConocoPhillips (COP) and Occidental Petroleum (COP), posted strongly higher profits.

"Chevron's results were driven by impressive production growth, especially in the U.S. ," said Phil Weiss, analyst at Argus Research. "They took advantage of the disparities between oil and natural gas prices."

Chevron's exploration-and-production earnings more than tripled to $4.7 billion as production in the U.S. rose 9% and 3% internationally. Average prices rose 97% for oil and 28% for natural gas at its U.S. business compared with a year ago.

The company's downstream segment--which purchases crude oil and refines it into products such as gasoline and diesel fuel--saw earnings slump 74% to $196 million as refining margins remained weak. Downstream earnings included results from the company's chemicals business, which was previously reported as a separate business segment.

"In the downstream, sales margins for refined petroleum products remain weak," said Chevron Chief Executive John Watson in prepared remarks. He added that the company is progressing with the restructuring plans for the refining and marketing businesses by selling of gas stations around the world and reducing workforce.

Capital and exploratory expenditures in the first quarter 2010 were $4.4 billion, compared with $6.5 billion in 2009. Expenditures for upstream projects represented about 90% of the company's expenditure in the first quarter.

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