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Though Chevron (CVX) beat estimates by reporting Friday that its quarterly net income tripled over a year earlier, shares were barely up by the end of the day.
Earnings for the second quarter came to $5.41 billion, or $2.70 per share, up from $1.75 billion or 87 cents last year. Analysts had expected a profit of $2.44 per share. Revenue in the quarter rose 32% to $53 billion.
So far, Chevron has felt little impact from the deep-sea drilling moratorium. George Kirkland, Chevron's vice chairman, told analysts he saw the 2010 impact from the halt in new drilling at less than 10,000 barrels a day.
Kirkland said that Chevron was pushing ahead with deepwater drilling in the Gulf of Mexico. Chevron has two drilling projects in the Gulf: Jack/St. Malo and Big Foot. Assuming the moratorium is lifted, Chevron plans to go ahead with drilling on these projects. However, Kirkland said: "If this keeps sliding out in the unknown, it will impact the projects."
Chevron owns half of Jack/St. Malo, which is expected to produce 120,000 to 150,000 barrels a day at its peak starting in 2014, and 60% of Big Foot, which is expected to peak at 63,000 barrels after starting up in the next five years.
As suggested by Chevron, the moratorium on deepwater drilling, if continued beyond this year, will impact major oil producers. To what extent is unknown.
Knowing this information, would you buy Chevron?
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