Chevron returned to profit on Friday, reporting a huge quarterly earnings beat as the company continued to cut costs amid a protracted oil price rout now entering its third year.
Shares of Chevron were up about about 2.8 percent.
"We have made progress toward our goals of lowering the cash breakeven in our upstream business and getting cash balanced," Chairman and CEO John Watson said in a statement. "Capital spending and operating and administrative expenses have been reduced by over $10 billion from the first nine months of 2015 as a result of a series of deliberate actions we have taken."
The oil company reported third-quarter earnings of $1.3 billion, or 68 cents a share, on revenues of $30.14 billion. That profit was down 37 percent from a year ago, when Chevron reported earnings of $2 billion, or $1.09 a share, on revenue of $34.3 billion.
Analyst had forecast earnings of 37 cents on revenue of $30.3 billion.
Chevron has reduced capital spending and expenditures on exploration by about $8 billion year to date. Spending on upstream exploration and production operations accounted for 91 percent of all expenditures in the third quarter.
Production of oil, natural gas and other fossil fuels ticked down slightly from a year ago. Chevron narrowed its loss in its U.S. upstream business by nearly $400 million due to lower expenses and taxes. The loss was offset by a profit of $666 million in Chevron's international drilling segment, which was up slightly from a year ago.
Earnings in Chevron's U.S. downstream business — which includes refining fuels and products that are marketed to consumers — fell by $727 million from a year ago due to lower margins for refined products. Integrated oil companies such as Chevron have seen their refining margins contract as crude oil prices rise. Crude is the raw material for many fuels.
On Wednesday, Chevron raised its quarterly dividend by a penny to $1.08 a share.
One day earlier, a militant group known as the Niger Delta Avengers claimed responsibility for an attack on a pipeline to the Escravos offshore terminal operated by a Chevron subsidiary. Chevron briefly closed the facility in the spring due to militancy Nigeria's restive southern delta region. The company declined to comment.
Chevron is better-positioned than its larger U.S.-peer ExxonMobil to reap upside from rising oil prices, but a number of large-cap exploration and production companies are likely to outperform both majors, analysts told CNBC's "Power Lunch" on Thursday.
"We think that Chevron just has too much risk right now. It's trying to balance pretty … hefty dividend spending, along with trying to streamline the company, along with trying to grow production. We're worried that production is eventually going to turn into a shortfall," CFRA energy analyst Stewart Glickman said.
Last quarter, a group of integrated oil companies led by Chevron announced it would invest $36.8 billion in a project that will boost production at Kazakhstan's Tengiz field, marking one of the largest investment decisions since the beginning of the oil price downturn.
Disclosure: Pavel Molchanov owns Chevron stock. Raymond James makes a market in shares of Chevron.