HOUSTON (Reuters) - U.S. oil and natural gas producer Chevron Corp CVX.N on Friday reported quarterly earnings that topped analysts' estimates on higher prices and production, sending shares higher in morning trading.

FILE PHOTO - The logo of Dow Jones Industrial Average stock market index listed company Chevron (CVX) is seen in Los Angeles, California, United States, April 12, 2016. REUTERS/Lucy Nicholson/File Photo

Results for the San Ramon, California, company reflected a 12.5-percent increase in oil and gas production as net output rose to 3.08 million bpd. Prices paid for its crude were $59 a barrel in the quarter, up from $57 a year earlier, the company said.

It was “a good beat overall,” said Muhammed Ghulam, an analyst at Raymond James. “Permian production growth remained strong, up 12 percent compared to the prior quarter and 84 percent year over year,” he said.

The Trump administration last month added new sanctions against imports from Venezuela, where Chevron is the last major U.S. oil company with production operations.

Chevron continues to operate in Venezuela and believes it can maintain a “good, stable operation” there, Chief Executive Michael Wirth said Friday on a call with analysts. It has been able to replace Venezuelan crude usually processed at its Pascagoula, Mississippi refinery, he said.

Chevron’s fourth-quarter cash flow from operations rose to $9.2 billion from $8 billion a year earlier, reflecting the higher output and expense reduction. Investors have been pushing oil companies to restrain spending and increase returns to shareholders.

Wirth forecast oil-equivalent production this year to grow between 4 percent and 7 percent, excluding asset sales.

Chevron reported a profit of $3.7 billion, or $1.95 per share, compared with $3.11 billion, or $1.64 a share a year earlier. Analysts’ mean forecast was $1.87 a share, according to Refinitiv.

Its operating results compared to the year-ago period were lower because of the impact of U.S. tax reform a year ago. Profit from oil and gas exploration was $3.29 billion compared with $5.29 billion a year earlier; refining profit fell to $256 million compared with $1.2 billion a year ago.

The company this week agreed to pay $350 million to buy a refinery in Pasadena, Texas, from Brazilian state oil company Petrobras PETR4.SA, confirming a Reuters report from Monday. The acquisition is intended to process oil flowing from its West Texas shale fields.

Shares were up 4 percent at $118.79 in midday trading, helping lift the Dow Jones Industrial Average .DJI.