                                  CHEVRON

                                  2/04/94

                      Stock     Price      52 week     YTD Pr    Div  Gross
                      Rating     2/03   --- Range ---    Chg     Rate Yield
Chevron Corp.           MO      94.38       99-73         8      3.70  3.9

                                 Est.        - Interim EPS -    -EBITDA 94-
          FY/IP       EPS93     EPS94 PE94   --Next- -YrAgo-    per/sh  p/e
CHV       12/01Q      6.57R      6.85 14.3       n/a     n/a     15.40  6.1

Chevron (CHV) 94 3/8 , 1994 $6.85, 1995 $7.45, Moderate Outperformer

1.  Chevron earned $6.57.  Chevron's earnings have been driven by a number
of factors over the past few years, with major fixed cost reductions a key
item.  Chevron has articulated a goal for 1994 of reducing its operating
costs further by $.25 per barrel; under Chevron's methodology, per barrel
costs are expressed over the spectrum of all barrels handled in its system,
whether they are related to production, refining or marketing.  Its goal is
to reduce costs expressed on this basis from $6.51 per barrel in 1993 to
$6.26 per barrel in 1994.  If accomplished (and Chevron management now
brings major credibility to such statements due to its success in the past
few years), it would actually be more impressive than it sounds.  This is
because the imminent sale of the Port Arthur and Philadelphia refineries
will effectively mean Chevron has to cut costs by some $.35-$.40 per barrel
rather than the official $.25 goal.  This reflects that the operating costs
of the two refineries are much lower than for Chevron as a whole.  The
sale, thus, has the ironic effect of raising costs.  The sale is
nevertheless a very positive one for Chevron in refocusing its domestic
refining/marketing operations into areas of strength.  Chevron's cost-
cutting focus for 1994 does not involve major employee reduction.  It is
designed to maintain earnings if oil prices are as much as $2 per barrel
below the l993 level.

2.  International production operations will show substantial growth in
1994, and this is being viewed as a key area for strategic expansion beyond
1994 as well.  Near term, new production from the Alba Field in the U.K.
North Sea, new fields in Cabinda (Areas B and C), expanded Duri field
production in Indonesia, new gas production from the Goodwyn platform
offshore Australia and higher production from the Tengiz field in
Kazakhstan will be the key contributors.  International production is
expected to increase by 9% in 1994.  Domestic production is expected to be
more or less flat.

3.  Chevron has not yet finalized either of its two pending refinery sales.
The sale of the Philadelphia refinery to the Lincolnshire group is expected
to firm up shortly (i.e., by the end of the first quarter). Negotiations
concerning the Port Arthur refinery are more complicated as they involve
environmental matters and agreements on transfer pricing for petrochemical
operations (these are not being sold but use refinery produced feedstock).
Apparently there have been several bids for Port Arthur.  After the sale
of the two refineries, Chevron will have a top-tier system, focused on the
West Coast and the southern part of the country.  Chevron is making major
investments in its two California refineries, with about 50% devoted to
environmental-related expenditures (i.e., primarily CARB II reformulated
gasoline) and 50% to upgrading projects.

4.  Financially, analysts project that Chevron will be generating free cash
flow in 1994, with discretionary cash flow of about $5 billion ($15.30 per
share) and expected asset sales of some $400 million, more than covering
capital and exploratory expenses of about $3.9 billion and dividends of
around $1.2 billion.  The recent dividend increase to $3.90 per share was
made meeting the test that oil prices could end up $2-$3 per barrel lower
in 1994 than 1993.  Even under these conditions, the increase was viewed as
prudent.

6.  Chevron is continuing to add credibility to its now oft-stated goals to
be better than the best and to provide shareholders with leading rates of
return.  It has cut costs significantly, it has growth prospects in its
international production division and West Coast refining/marketing and
cyclical recovery potential in chemicals.  It has thoroughly changed its
overall corporate culture from one of overconservatism to one that
emphasizes better utilization of what was always a strong asset base.

