Exxon Mobil Corp. and Chevron Corp. have surpassed analysts’ expectations in profit, output, and sales, thanks to increased oil production from the Permian Basin, which offset weaker crude prices.
Exxon’s third-quarter adjusted earnings exceeded forecasts by a nickel, while Chevron surpassed estimates by 11 cents. Both companies are continuing significant buybacks and payouts, contrasting with BP Plc’s cautious approach amid fluctuating oil prices. Shell Plc and TotalEnergies SE remain committed to their buyback plans.
Despite a 20% decline in oil prices since early April, Exxon generated ample cash flow to cover third-quarter payouts, whereas Chevron had to rely on borrowing. Exxon shares initially rose before slipping 0.8%, while Chevron surged as much as 4.8%, marking its most substantial intraday gain in nearly 19 months.
Exxon increased dividends for the 42nd consecutive year to 99 cents per share and maintained strong cash flow and low net-debt-to-capital ratio. The company’s fast-growing developments in Guyana and the Permian Basin, producing crude for less than $35 a barrel, have kept it ahead of peers. Exxon’s $60 billion acquisition of Pioneer Natural Resources Co. boosted its Permian production.
Chevron expects to finalize asset sales in Canada, Congo, and Alaska by the end of the year, raising up to $15 billion from divestments by 2028. The company aims for $3 billion in cost reductions by the end of 2026. Chevron’s oil and natural gas output increased by 7% year-over-year, with U.S. Permian Basin production reaching a new quarterly record. The company commenced output from Anchor, a new Gulf of Mexico investment.
Chevron’s stock has underperformed Exxon this year due to an arbitration battle over its $53 billion deal to acquire Hess Corp. New projects in the Gulf of Mexico and Kazakhstan are expected to boost cash flow next year. Additionally, Chevron announced plans to move its headquarters from California to Houston, criticizing California’s regulatory environment as akin to “socialist” planning.
Story via WorldOil.com