April 26 (Reuters) - Oil giant Chevron Corp ( CVX ) beat

estimates for first-quarter profit on Friday as higher

production volumes in the U.S. helped offset a hit from weak

natural gas prices and fuel margins.

The second largest U.S. oil producer posted a profit of $5

billion in the quarter ended on March 31, down from $6.57

billion, or $3.46 per share from a year ago. Results beat

consensus by 2% as recent acquisitions bolstered oil and gas

volumes.

Chevron ( CVX ) and Exxon Mobil ( XOM ), which posted first

quarter results that missed Wall Street consensus estimates, are

feeling the pinch of weak energy prices and fuels margins that

have cooled in the last year. A glut of natural gas and a

warmer-than-expected winter slashed natural gas prices, eating

into earnings.

"U.S. production was up 35% from a year ago, and we

continued to meet major project milestones," CEO Mike Wirth said

in a statement.

Chevron ( CVX ) said results were sustained by higher production

brought by the acquisition of PDC Energy, Inc and sustained

strong execution in the Permian and Denver-Julesburg (DJ)

Basins.

Shares fell 1.4% in pre-market trading to $163.35.

Chevron ( CVX ) said first quarter oil and gas production jumped

12%, to 3.34 million barrels of oil equivalent per day (boepd).

Earnings from pumping oil and gas were $5.24 billion, up

from $5.16 billion in the same period a year ago. But profits

from producing gasoline and chemicals fell sharply, to $783

million from $1.8 billion a year ago. Refining suffered from

weaker margins and higher operating expenses, the company said.

Chevron ( CVX ) reported adjusted per share profit of $2.93 for

the first quarter, beating analysts' consensus estimate of

$2.87.

GUYANA

Late last year, Chevron ( CVX ) offered to buy Hess Corp ( HES ) for

$53 billion to get a foothold in oil-rich Guyana's lucrative

offshore fields.

The deal, however, has been stalled by a regulatory review

and challenged by Exxon Mobil ( XOM ), which claims the right to

Hess's Guyana assets. Exxon and partners aim to double

production capacity to 1.3 million barrels of oil equivalent per

day (boepd) by the end of 2027.

Chevron ( CVX ) said "the merger with Hess is advancing" and it

intends to certify substantial compliance with the Federal Trade

Commission's second request in the coming weeks.

"We remain confident that a preemption right does not

apply to this transaction and believe this will be affirmed in

arbitration," it said.

Management will provide more details on a conference

call at 11 a.m. ET with investors looking for year-ahead

guidance and an update on the arbitration case

Chevron ( CVX ) shares has underperformed rival Exxon by about 10

percentage points so far this year, amid challenges to its

proposed acquisition of Hess.

(Reporting by Sabrina Valle in Houston and Mrinalika Roy in

Bengaluru; editing by Anil D'Silva and Chizu Nomiyama)