Chevron Corp reported a 26.3% jump in quarterly profit on Friday, as higher oil and gas production and a one-time breakup fee from its failed bid for a rival more than offset lower energy prices and a rise in expenses.
Results benefited from a $1 billion fee it received after Occidental Petroleum wrecked its $33 billion deal to buy Anadarko Petroleum with a winning $38 billion bid. The termination fee added $720 million to the quarter's profit, Chevron said.
Its U.S. shale production rose 21% during the quarter, but was overshadowed by sharply weaker oil and gas prices. Like many of its rivals, Chevron also reported declining profits in its refining and chemicals units.
"Upstream earnings were slightly ahead of expectations, while downstream earnings came in slightly below, leaving net income in line" with forecasts," said RBC analyst Biraj Borkhataria.
Shares were up a fraction at $120.76 in morning trading. The stock is up about 11% year to date.
Chevron abandoned its pursuit of Anadarko in May, refusing to increase its bid, saying it would not back down from a pledge not to dilute the returns it promised investors. Occidental this week said it expects to quickly close the purchase after Anadarko shareholders vote on Aug. 8.
The second-largest U.S. oil and natural gas producer's daily production of oil and gas rose 9.1% to 3.08 million barrels, a record for the company. Its production in the Permian Basin, the top U.S. shale field, rose 21.5% over a the same period a year ago.
The company said it has resumed share buybacks that were suspended during its acquisition talks with Anadarko. It expects to buy $5 billion in its own shares this quarter.
Net income attributable to the company rose to $4.31 billion, or $2.27 per share, in the second quarter, from $3.41 billion, or $1.78 per share a year earlier.
(Reporting by Arathy S Nair and Gary McWilliams; Editing by Shailesh Kuber and Bernadette Baum)