Chevron, the second-largest U.S. oil company, said its fourth-quarter profit rose to $5.32 billion, or $2.64 a share, from $3.1 billion, or $1.53 a share, a year earlier, on higher oil prices and increased demand, but investors were disappointed the top-line number and news of a low reserve replacement ration and sent Chevron shares lower on Friday.
Chevron (CVX) posted fourth-quarter revenue of $54 billion, well below the $58.8 billion analysts were expecting and the company said its reserve replacement ratio dipped to 24% in the quarter. That is the lowest reserve replacement ratio in at least eight years for Chevron, according to Bloomberg News.
Chevron produced 2.76 million barrels of oil equivalent per day in 2010 and said that figure should rise by 1% this year to 2.79 million barrels per day. Last month, the company said it will spend $4 billion the Big Foot deepwater project in the Gulf of Mexico and that it will up capital spending in 2011 by 20% to $26 billion. In October, Chevron announced plans to spend $7.5 billion on two other Gulf projects.
Chevron intends to give final investment approvals to 15 additional ventures by 2012 with price tags of at least $1 billion each, Bloomberg reported, citing a Chevron presentation. CEO John Watson said his company will continue to hunt for acquisitions this year, including shale assets, ''if we see the right commercial opportunity.''