Chevron Reports 1998 Net Income of $1.98 Billion

Chevron Corporation reported 1998 preliminary net income of $1.98 billion, down 39 percent from 1997 net income of $3.3 billion. Net income for 1998 and 1997 included net benefits of $31 million and $76 million, respectively, from special items. For the fourth quarter 1998, net income of $431 million included net charges of $72 million from special items. Charges associated with asset write-downs; reserves for environmental remediation and a litigation issue; and last-in, first-out (LIFO) inventory adjustments were partially offset by favorable prior-year tax adjustments and a gain from an asset sale. Fourth quarter 1997 net income included net benefits from special items totaling $68 million. CEO Ken Derr highlighted a number of significant 1998 operating and strategic events for the company. Included was the Deepwater Gulf of Mexico. Chevron acquired 66 additional deepwater tracts at federal lease sales during the year, furthering its intent to be a major participant in the development of the Gulf's deep waters. The company's deepwater inventory consisted of 428 tracts at year-end 1998. Construction and installation of production facilities at the company's first deepwater Gulf of Mexico operation, Genesis, neared completion. Chevron is the unit operator with a 57 percent working interest in Genesis and expects production to commence in February 1999. Another of the company's deepwater projects, Gemini, is expected to begin production later in 1999.