U.S. oil and natural gas producer Chevron Corp on Friday reported that its quarterly profit doubled on record oil and gas production, sending its shares up as much as 5 percent.
The results reflected strong gains in its oil and gas production with crude prices up 44 percent during the quarter and offset a drop in earnings from its downstream operations, including refining and chemicals.
Third-quarter oil and gas production rose 9 percent over a year earlier, and the company forecast total output for the full year would be up about 7 percent over 2017.
Its production in the West Texas shale fields rose 80 percent in the quarter, adding 150,000 barrels per day, "the equivalent of adding a midsize Permian pure-play E&P company," Pat Yarrington, the company's finance chief, told analysts on a conference call.
Chevron ran 20 drilling rigs in its Permian operations during the quarter, and will continue running the same number this quarter, Yarrington said.
"Our approach right now is to take a bit of a pause and to focus on capturing all the efficiencies that a 20-rig fleet would necessitate," she added.
Fourth-quarter downstream earnings and cash flow will be hurt by higher planned maintenance activity, the company said. Downstream profit fell 24 percent in the quarter from continuing weakness in its international refining operations.
Pierre Breber, Chevron's executive vice president of downstream and chemicals, declined to comment on reports it is in discussions to acquire a U.S. Gulf Coast refinery. But he said the company has strong reasons, including growing Permian oil production, to consider doing so.
The company reported third-quarter net income of $4.05 billion, or $2.11 a share, compared with $1.95 billion, or $1.03 per share, in the same quarter a year earlier. Analysts were looking for $2.06 per share of profit, according to IBES data on Refinitiv.
Shares rose $3.44 to $114.51 and hit a session high of $117.11. The stock declined 9 percent in October and was off 11 percent through Thursday's close this year.
(Reporting by Gary McWilliams; Editing by Jeffrey Benkoe)