Exxon and Chevron Exceed Expectations as Shale Wells Boost Output

Exxon Mobil Stock

Exxon Mobil Corp. (NYSE:XOM) and Chevron Corp. (NYSE:CVX) have surpassed earnings expectations, benefitting from larger-than-anticipated oil production from shale fields that helped offset the impact of declining crude prices.

Exxon’s shares rose by as much as 1.6% in New York, and Chevron saw a 2.8% climb. Exxon’s robust performance was also supported by a $1.14 billion boost from unsettled derivatives and record fuel production at its refineries.

Chevron reported adjusted earnings of $3.45 per share, surpassing the Bloomberg Consensus estimate by 23 cents. Additionally, the oil explorer increased its dividend by 8%, which was higher than initially forecast.

The positive reports from North America’s leading crude drillers, driven by strong output growth in the Permian Basin, follow similar results from Shell Plc, which initiated Big Oil’s earnings season with adjusted net income more than $1 billion higher than the average forecast. BP Plc and TotalEnergies SE are expected to disclose their results next week.

Exxon’s trading unit played a significant role, generating over $1 billion in gains that more than offset the $410 million hit from lower crude prices. This marks a departure for Exxon, historically cautious about trading due to perceived risks.

Both Exxon and Chevron face pressure from investors to boost cash flow by increasing oil production while avoiding a supply glut that could harm prices. Exxon is pursuing this goal through a $60 billion takeover of Pioneer Natural Resources Co., expected to close around mid-year, while Chevron is adopting a similar strategy with a $53 billion deal for Hess Corp.

Exxon’s CEO, Darren Woods, aims to double earnings from 2019 to 2027 by pivoting to more profitable oil production. Chevron, as the second-largest U.S. oil explorer, is working towards a 10% growth in Permian production this year, targeting 1 million barrels a day from the region by 2025.

The positive results underscore the resilience of major oil companies in navigating market challenges and adapting strategies to ensure continued growth and profitability.

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