Chevron Corporation (CVX) reported earnings of $7.2 billion ($3.66 per share – diluted) for the second quarter 2012, compared with $7.7 billion ($3.85 per share – diluted) in the 2011 second quarter.

Sales and other operating revenues in the second quarter 2012 were $60 billion, compared to $67 billion in the year-ago period.

“Our second quarter earnings and cash flow were among our strongest ever, even with softer oil markets,” said Chairman and CEO John Watson. “Despite current weakness in the global economy, we continue to invest in our long-term growth projects to help deliver affordable energy to meet future demand. We took several important steps to advance our major upstream capital projects, in particular achieving milestones in our natural gas development projects in the Asia-Pacific region. We also expanded our global exploration resource acreage, including new leases in the Gulf of Mexico where we already hold a significant position.”

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Worldwide net oil-equivalent production was 2.62 million barrels per day in the second quarter 2012, down from 2.69 million barrels per day in the 2011 second quarter. Production increases from project ramp-ups in Thailand, the United States and Nigeria were more than offset by normal field declines, the shut-in of the Frade Field in Brazil, maintenance-related downtime and dispositions.

U.S. upstream earnings of $1.32 billion in the second quarter 2012 were down $632 million from a year earlier, primarily due to lower crude oil and natural gas realizations, lower production and the absence of gains on asset sales.

The company’s average sales price per barrel of crude oil and natural gas liquids was $97 in the second quarter 2012, down from $104 a year ago. The average sales price of natural gas was $2.17 per thousand cubic feet, compared with $4.35 in last year’s second quarter.

Net oil-equivalent production of 659,000 barrels per day in the second quarter 2012 was down 35,000 barrels per day, or 5 percent, from a year earlier. The decrease in production was associated with normal field declines and an absence of volumes associated with Cook Inlet, Alaska, assets sold in 2011. Partially offsetting this decrease was ramp-up at the Perdido and Caesar/Tonga projects in the Gulf of Mexico. The net liquids component of oil-equivalent production decreased 4 percent in the 2012 second quarter to 461,000 barrels per day, while net natural gas production decreased 9 percent to 1.19 billion cubic feet per day.

International upstream earnings of $4.30 billion decreased $619 million from the second quarter 2011. The decline between quarters was primarily due to lower realizations and volumes for crude oil, as well as higher exploration expense, partially offset by higher realizations for natural gas. Foreign currency effects increased earnings by $219 million in the 2012 quarter, compared with an increase of $26 million a year earlier.

The average sales price for crude oil and natural gas liquids in the 2012 second quarter was $99 per barrel, down from $107 a year earlier. The average price of natural gas was $6.10 per thousand cubic feet, compared with $5.49 in last year’s second quarter.

Net oil-equivalent production of 1.97 million barrels per day in the second quarter 2012 was down 35,000 barrels per day from a year ago. Production increases from project ramp-ups in Thailand and Nigeria were more than offset by normal field declines, the shut-in of the Frade Field in Brazil and maintenance-related downtime. The net liquids component of oil-equivalent production decreased 5 percent to 1.32 million barrels per day, while net natural gas production increased 6 percent to 3.89 billion cubic feet per day.