Exxon Mobil reported better-than-expected second-quarter earnings and revenue early Friday, as the U.S. supermajor booked its first profit increase after four quarters of decline. Meanwhile, Chevron saw second-quarter results underperform analyst forecasts.
Exxon Mobil second-quarter earnings came in at $2.14 per share, 10% higher compared to a year ago, as revenue totaled $93.06 billion, representing a 12% increase vs. 2 2023. Meanwhile, Chevron Q2 EPS fell 17% to $2.55. Sales rose around 5% to $51.18 billion.
Ahead of Friday, analyst consensus had Exxon Mobil EPS of $2.02 and revenue at $90.09 billion. Analysts expected Chevron Q2 earnings of $2.93 per share and sales coming in at $48.68 billion.
"Despite recent operational downtime and softer margins, we remain poised to deliver significant long-term earnings and cash flow growth," Chevron Chief Executive Mike Wirth said in the earnings release Friday.
Exxon Mobil stock fell 0.1% to 116.82 during market trade on Friday. On Thursday, XOM declined 1.4% to 116.95. Chevron stock also dropped 2.8% to 148.41 Friday after slipping 4.9% on Thursday.
Exxon and Chevron both saw profit dips in Q1, primarily due to weaker refining margins and to natural gas prices coming down from last year's highs. In 2023, the two supermajors also saw earnings and revenue declines, as oil and natural gas prices weakened vs. prior-year levels — which had been driven higher by Russia's invasion of Ukraine.
The Q2 financial reports come amid a sag in oil prices, despite increased tension in the Middle East. In addition, the two U.S. supermajors continue to squabble over Chevron's attempt to move into oil-rich Guyana, with an arbitration hearing scheduled for May 2025.
Meanwhile, Shell fell 0.4% Thursday after delivering better-than-expected second-quarter results, with EPS growing more than 30%. On Tuesday, BP reported mixed Q2 results, with earnings topping views and revenue coming in below expectations. BP stock dropped more than 3% on the week.
XOM Production Hits Record As Guyana Delivers
Exxon Mobil reported Friday that global production in Q2 surged 21% to 4.36 million barrels of oil equivalent per day. This included around gross production of 630,000 barrels from Guyana in Q2, a record for Exxon.
So far in 2024, Exxon worldwide production is up 10% compared to the same period in 2023.
"We achieved record quarterly production from our low-cost-of-supply Permian and Guyana assets, with the highest oil production since the Exxon and Mobil merger," Exxon Mobil Chief Executive Darren Woods said Friday.
In the second quarter, Exxon Mobil also submitted an application to the Guyanese Environmental Protection Agency for a proposed seventh project. Production capacity is expected to be 120,000 to 180,000 barrels per day, with anticipated start-up in 2029, pending Guyanese government approval.
Looking ahead, Exxon Mobil predicts a drop in Guyana volumes of around 80,000 barrels of oil per day in Q3 due to project work.
For the full year, Exxon Mobil expects production of 4.3 million barrels of oil equivalent per day, with 2024 Permian Basin production of 1.2 million barrels of oil equivalent per day.
Chevron Global Production Increases; HQ Relocation
Chevron's global production rose by 11% to 3.29 million barrels of oil equivalent per day. The company said this increase was primarily due to its acquisition of PDC Energy and "strong performance" in the Permian and DJ Basins.
Chevron added that U.S. net oil-equivalent production was up 353,000 barrels per day from a year earlier.
The U.S. supermajor explained its Q2 earnings decrease was a result of lower margins on refined product sales and "the absence of prior year favorable tax items and negative foreign currency effects."
Chevron also announced Friday it is relocating the company's headquarters from San Ramon, California, to Houston, Texas.
Chevron currently has roughly 7,000 workers in the Houston area and about 2,000 workers in San Ramon. The company expects all corporate functions to shift to Houston over the next five years.
Exxon Mobil Vs. Chevron: Guyana
Toward the end of 2023 Chevron agreed to acquire Hess for $53 billion, giving the supermajor a share of the project offshore from Guyana. The energy industry touts offshore Guyana, a resource pioneered by Exxon, as the largest oil discovery in the last 10 years.
Exxon Mobil holds a 45% stake in Guyana's Stabroek block, where the are completed wells, and other wells under development. China's CNOOC International holds a 25% interest in the project with Hess holding a 30% stake. The Exxon-led venture has been drilling 18,000-foot-deep wells, with drillships working in water as deep as 8,900 feet.
Exxon Mobil's affiliate Esso Exploration & Production Guyana Limited is the consortium operator. The area off Guyana's coast reports estimated recoverable resources of more than 11 billion barrels of oil equivalent. Industry projections have Guyana producing more than 1 million barrels per day (bpd) by 2026.
Currently, Hess' share of net production is about 110,000 bpd. Exxon Mobil is producing around 400,000 bpd in Guyana, all from the Stabroek. Exxon expects output of 1.2 million bpd by the end of 2027.
For comparison, the Energy Information Administration estimates the Permian Basin in west Texas and New Mexico will produce about 6.3 million barrels per day in 2024. It is estimated to hold 50 billion recoverable barrels in the Wolfcamp and Bone Spring formations alone.
Last week, oil sector service firm TechnipFMC reported better-than-projected results, with earnings ballooning 330% to 43 cents per share. The company cited expansion in oil-rich Guyana for its financial performance. TechnipFMC has been awarded the subsea production contracts for the six offshore projects in Guyana's oil bloc.
Exxon Mobil: Right Of First Refusal
However, Guyana has become a zone of contention, with Exxon claiming it has the right to first refusal (ROFR) to acquire Hess' stake in the Stabroek block. Exxon Mobil and CNOOC on March 26 merged arbitration claims against Chevron's Hess acquisition.
Chevron announced on Wednesday that its arbitration hearing with Exxon Mobil has been scheduled for May 2025, according to a regulatory filing. The oil giant added that it expects a decision to be made within three months of the hearing.
"Exxon and CNOOC continue to ignore the plain language of the operating agreement, and Chevron and Hess remain confident that the arbitration will confirm that the Stabroek ROFR does not apply to the merger," the company wrote in the filing. Chevron added that it and Hess "remain committed" to merging.
Earlier this year, Woods said Exxon is looking to "ensure that the value we've created is not diminished through third-party actions."
"We filed for arbitration to confirm our rights and establish the value that the Chevron-Hess transaction places on the Guyana asset," Woods said in the Q1 earnings call in late April. "This will allow us to evaluate options to maximize the value for our shareholders. Any responsible management team would do the same."
Exxon And Chevron: Stock Performance And Oil Prices
XOM shares have been grinding against resistance around the 120 since early 2023. Exxon Mobil has a flat base with an official buy point of 123.75, its most recent in a series of side-by-side bases. The stock is up 19% on the year, but still well below an April high.
Meanwhile, Chevron stock is currently in a saucer with handle pattern with a 167.11 buy point, according to MarketSurge. CVX has advanced more than 7% in 2024, hitting a high in April of 167.11, the current base's buy point. Chevron stock hit its record high of 189.68 in November 2022.
Meanwhile, geopolitical risk in the Middle East has heated up in recent days. However, U.S. West Texas Intermediate (WTI) oil prices dropped below $77 per barrel on Friday. Futures for Brent crude, the international benchmark, traded below $80 per barrel Friday.
Concerns about a direct confrontation between Israel and Iran have ratcheted higher, a factor that would normally drive sup oil prices. But healthy supplies and soft demand in China continue to hold oil at low levels.
U.S. oil prices and Brent futures have both declined around 6% in 2024.
"WTI continues to trade near $80/bbl supported by low storage inventories and global supply concerns," FactSet senior energy analyst Connor McLean wrote on Tuesday. "With global demand expected to pick up next year, pricing should remain constructive for increased domestic drilling activity in 2025 leading to an increase in both crude oil and associated gas production in the U.S."
Exxon Mobil stock has a 64 Composite Rating out of a best-possible 99. XOM also has a 54 Relative Strength Rating and a 67 EPS Rating.
Please follow Kit Norton on X @KitNorton for more coverage.
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