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CHEVRON ANNOUNCES RESULTS FOR THE FOURTH QUARTER AND YEAR 1992

 SAN FRANCISCO, Jan. 25 /PRNewswire/ -- Chevron Corporation (NYSE: CHV) today reported record quarterly earnings of $1.088 billion, or $3.30 per share, for the fourth quarter of 1992. Earnings benefited $546 million from special items, mostly gains from asset dispositions. Fourth quarter 1991 earnings of $39 million, or $0.11 per share, included special charges of $244 million, primarily related to restructuring and workforce reduction programs. Excluding special items, fourth quarter 1992 earnings of $542 million, or $1.64 per share, nearly doubled from comparably adjusted earnings of $283 million, or $0.81 per share, in the fourth quarter of 1991.
 Preliminary net income for the year 1992 was $1.569 billion, up 21 percent from the $1.293 billion reported for 1991. Per share earnings increased even more -- up 25 percent, from $3.69 to $4.63, because of fewer outstanding shares in 1992. Net income included a first quarter one-time charge of $641 million for the retroactive adoption of two new accounting standards.
 Income before the cumulative effect of the accounting changes was $2.210 billion, or $6.52 per share. Earnings in 1992 included the benefit of $651 million from special items, mostly gains from asset dispositions. Special items reduced 1991 earnings $66 million. Excluding the cumulative effect of the accounting changes in 1992 and special items in both years, 1992 earnings were $1.559 billion, up 15 percent from $1.359 billion in 1991.
 Board Chairman and CEO Ken Derr stated, "1992 was a strong year. We accomplished a great deal. In addition to our improved earnings, we reorganized our businesses, reduced our workforce -- excluding service station employees -- by 6,200, disposed of marginal and non-strategic operations, reduced refinery capacity and reduced operating expenses company-wide. We accomplished these measures with no significant impact on our production and sales volumes. We also reduced our stock outstanding by 21.6 million shares, or 6 percent. We've maintained a healthy balance sheet and at the same time we've undertaken several large projects to ensure our future growth. We're not through yet, but these changes have positioned us to be more efficient, more competitive and more profitable in the future."
 Derr continued, "At the beginning of 1992, I announced a goal of reducing our operating costs 50 cents per barrel from 1991 levels. Our target date to achieve this reduction, on a sustained basis, is by the third quarter of 1993. Thanks to the outstanding efforts of our employees, 1992 operating expenses, adjusted for special items and accounting changes, declined over $550 million, or 7 percent. This equates to a reduction of almost 60 cents per barrel. Fourth quarter operating expenses declined 12 percent. We believe the majority of these reductions are sustainable and that we're well on our way to meeting our target.
 "Our continuing program to dispose of marginal and non-strategic assets generated before-tax cash proceeds in 1992 of about $1 billion. In addition, we exchanged certain oil and gas properties for 15,750,000 shares of our stock -- a transaction valued at $1.1 billion. The combination of the sales and exchange resulted in after-tax gains of $757 million," Derr said. "We are receiving excellent value for these assets and generating cash for investments in our core businesses."
 Commenting on 1992 earnings, Derr said "Our earnings improvement was largely driven by our strong fourth quarter results. Our U.S. petroleum operations improved significantly from 1991. Higher natural gas prices and refined product sales margins were driving forces, but reduced operating expenses also played a significant role in the increased earnings."
 Derr noted that earnings from the company's international refining and marketing operations declined significantly from 1991's strong results, as weak economic conditions in much of the world held down product prices. Also, chemical earnings continued at depressed levels.
 Addressing fourth quarter results, Derr remarked that earnings, adjusted for special items, had continued their upward trend from the first quarter, and were at the highest level since the 1991 first quarter. However, crude oil prices trended downward the last two months of the year and have continued at lower levels into 1993.
 As previously announced, the company adopted two new accounting standards in the fourth quarter of 1992, retroactive to Jan. 1, 1992. The adoption of these standards, relating to accounting for postretirement benefits other than pensions and accounting for income taxes, resulted in a first quarter one-time charge of $641 million for the cumulative effect on prior years' results of the accounting changes. In addition, the effect of the new standards on 1992 ongoing results was a net increase to earnings of $163 million, of which $73 million occurred in the fourth quarter. Effects in future years will be largely dependent on foreign currency exchange rates against the dollar.
 Total revenues for 1992 were $42.9 billion, up 5 percent from 1991 revenues of $40.9 billion. Fourth quarter 1992 revenues were $11.4 billion, up 10 percent from 1991 fourth quarter revenues of $10.4 billion.
 Included in 1992 earnings were foreign currency gains of $71 million compared with foreign currency losses of $4 million in 1991. Foreign currency gains were $22 million in the 1992 fourth quarter while in the 1991 quarter, foreign currency effects netted to zero.
 Exploration and Production
 U.S. exploration and production earnings of $1.043 billion for the year 1992 benefited $413 million from special items, of which $368 million were included in fourth quarter earnings of $618 million. Special items in both periods were mostly gains from asset dispositions, including a $376 million gain from the fourth quarter exchange with Pennzoil Company of a Chevron subsidiary holding 266 oil and gas properties for 15.75 million shares of Chevron stock owned by Pennzoil. In 1991, annual earnings of $285 million and fourth quarter earnings of $28 million included reductions for special charges of $46 million and $84 million, respectively.
 Although both average crude oil prices and crude oil production declined for the year and the quarter, earnings per barrel increased because of the company's extensive cost cutting efforts and the disposition of higher-cost oil and gas properties. Increased natural gas prices in both the year and quarter also were a major contributor to the earnings improvement. Depreciation and exploration expenses were lower in both 1992 periods.
 For the year, Chevron's crude oil realizations averaged $16.50 per barrel, down from $17.10 in 1991, and for the fourth quarter averaged $16.58 per barrel, down from $17.13 in the 1991 quarter. Average natural gas realizations for 1992 were $1.70 per thousand cubic feet and increased seasonally to $2.25 in the fourth quarter. Comparable prices for the 1991 year and fourth quarter were $1.53 and $1.88, respectively.
 Net liquids production for the year and the quarter declined 5 and 12 percent, respectively, and natural gas production was down 2 and 7 percent from the corresponding 1991 periods. The decreases were primarily due to property dispositions.
 International exploration and production earnings were $594 million in 1992 and $72 million in the fourth quarter, compared with $717 million and $157 million for the 1991 year and fourth quarter, respectively. Special items increased 1992 earnings $14 million, but reduced fourth quarter earnings $20 million. Gains on property sales in the North Sea, Sudan and Canada were partially offset by a $110 million fourth quarter write-down of the company's Canadian Beaufort Sea properties. Special items increased 1991 earnings $138 million and fourth quarter 1991 earnings by $22 million.
 Adjusted for special items, earnings continued at strong levels for the year in total, but fourth quarter earnings declined 32 percent. Lower average crude oil prices in 1992 were offset by foreign currency gains of $80 million, compared to gains of $19 million in 1991.
 Net production of crude oil and natural gas increased 2 and 4 percent year-to-year. Fourth quarter production volumes were up 3 percent for crude oil but declined 5 percent for natural gas. New crude oil production from Papua New Guinea and increased production in West Africa more than offset declines in the North Sea and Indonesia. Annual natural gas production increased in Australia and Canada.
 Refining and Marketing
 U.S. refining and marketing operations earned $297 million in 1992, including $101 million in the fourth quarter. This was a significant improvement from the losses of $153 million and $226 million reported for the year 1991 and fourth quarter, respectively. The 1991 amounts included special charges of $335 million and $212 million, respectively, primarily related to restructuring and environmental provisions. Special items in 1992, mainly environmental provisions and LIFO inventory liquidation losses, reduced earnings $53 million for the year and $55 million for the fourth quarter.
 Excluding special items, 1992 earnings of $350 million almost doubled from the $182 million earned in 1991. Adjusted fourth quarter 1992 earnings were $156 million, compared with a $14 million loss in the prior year's quarter. The earnings increase resulted from higher product sales margins and improved refinery operations. Margins improved on lower operating costs and on higher West Coast gasoline prices compared with 1991 when intense competition kept prices low. Earnings also benefited from higher refined product sales volumes, which increased 2 percent for the year and 7 percent for the quarter.
 International refining and marketing's 1992 earnings declined to $111 million from $486 million in 1991. Fourth quarter 1992 earnings were $28 million, down from $150 million in the 1991 fourth quarter. Special items reduced the 1992 annual and fourth quarter earnings $3 million and $8 million, respectively, primarily from fourth quarter LIFO inventory liquidation losses. Special items increased the 1991 year and fourth quarter earnings by $133 million and $71 million, respectively.
 Weak global economic conditions held down product prices, shrinking sales margins in all the company's areas of operations. In addition, fourth quarter earnings included $14 million of foreign currency losses, compared to foreign currency gains of $19 million in the 1991 quarter. Foreign currency fluctuations were not significant from year-to-year.
 Refined product sales volumes increased 4 percent from 1991 due to the continued demand growth in the Caltex affiliate's areas of operations, where volumes were up 6 percent. Fourth quarter sales volumes declined, however, as a decline in Chevron's trading volumes more than offset the Caltex increase.
 Chemicals
 Chemicals earned $89 million in 1992, down from $151 million earned in 1991. Special items increased earnings $53 million and $34 million in 1992 and 1991, respectively. Fourth quarter 1992 results were a loss of $5 million, compared with a $2 million loss in the fourth quarter of 1991. The 1992 special items included gains from asset sales and from product licensing agreements.
 Weak economies in the United States, Europe and Japan, coupled with industry production overcapacity for commodity chemicals continued to depress product prices.
 Coal and Other Minerals
 Coal and other minerals' 1992 earnings of $198 million included a $159 million fourth quarter gain on the sale of a copper interest in Chile. Operationally, earnings improved on record coal sales tonnage.
 Corporate and Other
 Corporate and other operations incurred net charges of $122 million for 1992, but earned $104 million in the fourth quarter, compared with charges of $200 million and $64 million for the 1991 year and quarter, respectively. In 1992, special items netted to a benefit of $68 million, as favorable fourth quarter benefits totaling $103 million, mostly prior-year tax adjustments and pension settlement gains, more than offset employee severance and litigation provisions recorded in earlier quarters. In 1991, special items netted to a benefit of $14 million as fourth quarter provisions totaling $44 million, for workforce reduction programs and for litigation issues, were more than offset by favorable prior-year tax adjustments recorded in earlier quarters.
 The 1992 fourth quarter included foreign currency gains of $24 million, compared with foreign currency losses of $4 million in the 1991 quarter. Year-to-year, foreign currency fluctuations were not significant.
 Interest expense declined for the year and quarter as lower interest rates more than offset higher average debt levels.
 Capital and Exploratory Expenditures
 Worldwide capital and exploratory expenditures, including the company's share of affiliates' expenditures, were $1.4 billion in the quarter, and $4.4 billion for the year, down from 1991's fourth quarter spending of $1.6 billion and annual spending of $4.8 billion. As previously announced, Chevron projects 1993 capital and exploratory expenditures at about $4.9 billion.
 -0- 1/25/93
 /CONTACT: Bonnie Chaikind of Chevron, 415-894-1200/
 (CHV)


CO: Chevron Corp. ST: California, Texas IN: OIL SU: ERN

TM -- SF011 -- 8632 01/25/93 15:03 EST
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