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CHEVRON ANNOUNCES THIRD QUARTER EARNINGS INCREASED 21 PERCENT

 CHEVRON ANNOUNCES THIRD QUARTER EARNINGS INCREASED 21 PERCENT
 SAN FRANCISCO, Oct. 27 /PRNewswire/ -- Chevron Corporation (NYSE: CHV) today reported third quarter earnings of $378 million, an increase of 21 percent from the $313 million earned in the third quarter of 1991. Because of fewer shares outstanding in 1992, earnings per share increased 23 percent from $.90 to $1.11.
 Special items contributed a net $57 million to third quarter 1992 earnings compared with $82 million in last year's third quarter. Foreign exchange losses for the quarter were $98 million, compared with foreign exchange gains of $21 million in the 1991 quarter. Excluding the effect of special items and foreign exchange in both years, the company's third quarter 1992 earnings doubled to $419 million ($1.23 per share) from $210 million ($.60 per share) in last year's third quarter.
 Chairman and CEO Ken Derr said, ''Our improved earnings reflected higher worldwide crude oil and U.S. natural gas prices and higher U.S. refined product prices, consistent with industry trends. Additionally, we are seeing the effects on the bottom line of our reorganization and extensive cost-reduction efforts. Operating expenses, adjusted for special items, declined 11 percent from last year's third quarter and, on a year-to-date basis, are down 8 percent.'' However, Derr noted that the company's chemicals and international refining and marketing earnings continued to be depressed by weak economic conditions. "Also, Hurricane Andrew had an adverse impact on our domestic petroleum operations in August and September,'' Derr said.
 Net income for the first nine months of 1992 was $1.032 billion, down 18 percent from the $1.254 billion earned during the first nine months of 1991. Earnings per share were $3.02 for the 1992 nine months compared with $3.58 in the prior year period. The year-to-date decline was mainly due to the very strong performance of worldwide refining and marketing operations in the 1991 first quarter. Special items increased earnings $105 million in the first nine months of 1992 and $178 million in the same period last year. Foreign exchange losses reduced 1992 and 1991 year-to-date earnings $51 million and $4 million, respectively.
 Total revenues were $11.1 billion for the quarter, up 11 percent from $10.0 billion in last year's third quarter. For the nine months, total revenues were $31.4 billion, compared with $30.6 billion in the 1991 first nine months.
 Derr continued, "We expect further cost reductions in the fourth quarter, when our workforce reduction programs will be largely completed, and we close the recently announced stock exchange with Pennzoil. In this transaction we traded the shares of a Chevron subsidiary holding 266 domestic oil and gas properties for 15,750,000 shares of our stock held by Pennzoil. These tend to be high- cost properties for us to operate. The Pennzoil transaction will result in an after-tax gain of around $375 million."
 United States Petroleum
 U.S. exploration and production earnings were $253 million, up significantly from the $29 million earned in the 1991 third quarter. The company's average crude oil sales price in the third quarter was $17.94 per barrel, up almost $1.00 from $16.95 in the 1991 quarter. Average natural gas prices increased 40 percent to $1.75 per thousand cubic feet from $1.25. Another major contributor to the increased earnings was a significant decline in operating expenses, due to cost reduction efforts and the continuing program to dispose of high-cost producing properties. Also, depreciation expense declined 13 percent from asset sales and lower production.
 Net production of liquids declined 6 percent, but natural gas production increased 3 percent from last year's level when low prices and weak demand held down production. Third quarter production declined about 14 thousand barrels per day for liquids and 110 million cubic feet per day for natural gas as a result of temporary shutdowns and subsequent damage from Hurricane Andrew in the Gulf of Mexico in late August.
 Special items increased 1992 third quarter earnings by $62 million, primarily from gains on disposition of marginal producing properties; the 1991 quarter included gains of $10 million from the property disposal program. U.S. refining and marketing operations earned $73 million in the quarter, compared with a loss of $10 million in last year's quarter, when a $53 million environmental provision was recorded. Special items in the 1992 third quarter reduced earnings $21 million, and consisted of asset write-offs and environmental provisions, partially offset by a favorable adjustment to a litigation reserve.
 Higher product sales margins and improved refinery operations contributed to the earnings increase, although scheduled maintenance downtime and hurricane-related shutdowns reduced refinery input. Total sales volumes decreased slightly from the 1991 third quarter, but gasoline sales increased 4 percent. Despite the improvement, earnings continue to reflect the weak U.S. economy, although West Coast gasoline prices have recovered from the fierce price wars of 1991.
 International Petroleum
 International exploration and production earnings were $89 million, compared with $191 million earned in the 1991 third quarter, which included a $36 million gain from an asset sale. The 1992 quarter included a $7 million asset sale gain.
 International upstream earnings were reduced by foreign exchange losses of $63 million, mostly caused by the remeasurement of deferred income taxes in the United Kingdom and Canada, compared with foreign exchange gains of $13 million in the 1991 third quarter.
 Excluding special items and the effects of currency fluctuations, earnings maintained their strong level with last year. Net liquids and natural gas production increased 3 percent and 12 percent, respectively. Increased liquids production in West Africa and production from the start-up of the company's Papua New Guinea project in late June 1992 were partially offset by lower North Sea and Indonesian production. Natural gas production increased in Canada and Australia. Exploration expense declined due to lower dry-hole write-offs.
 International refining and marketing lost $4 million in the third quarter, down sharply from earnings of $136 million in last year's third quarter, which included a favorable tax adjustment of $62 million.
 The weak global economy has held down product prices, narrowing sales margins. Total sales volumes were up slightly, as decreased trading activities were more than offset by an 8 percent increase in sales volumes by the company's Caltex affiliate. International downstream earnings were further reduced by foreign exchange losses of $9 million compared with exchange gains of $9 million in the 1991 third quarter.
 Chemicals
 Chemicals lost $7 million, compared with earnings of $44 million in the 1991 third quarter which included a $27 million gain from an asset sale. Continuing industry weakness was exacerbated by increased feedstock costs that could not be fully recovered. In addition, hurricane related plant shutdowns, together with scheduled maintenance, reduced production levels. Foreign exchange losses increased $6 million between quarters.
 Coal and Other Minerals
 Coal and other minerals reported earnings of $17 million for the quarter, a strong improvement from the $6 million loss incurred in last year's third quarter when exploration expenses for other minerals were unusually high. Coal earnings improved on higher sales tonnage and margins.
 Corporate and Other
 Corporate and other charges were $43 million compared with charges of $71 million in the third quarter of 1991. Special items reduced 1992 charges by $9 million, as pension plan settlement gains related to employees terminating under the company's enhanced early retirement program were partially offset by an increase to a litigation reserve. Interest expense declined as lower interest rates more than offset higher average debt levels, but foreign exchange losses of $20 million increased $19 million from last year's quarter.
 Capital and Exploratory Expenditures
 Worldwide capital and exploratory expenditures, including the company's share of affiliates' expenditures, were $974 million in the quarter, down 18 percent from the $1.184 billion spent in the 1991 third quarter. Total expenditures for the first nine months of 1992 were $3.046 billion, compared with $3.228 billion spent in last year's first nine months.
 -0- 10/27/92
 /CONTACT: Sherry Zippay of Chevron, 415-894-4581/
 (CHV) CO: Chevron Corporation ST: California IN: OIL CHM SU: ERN


GT-BR -- SF006 -- 5422 10/27/92 12:57 EST
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Date:Oct 27, 1992
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