Chevron and Exxon Mobil both reported early Friday another big quarterly earnings dip in the fourth-quarter even as the two U.S. supermajors increased production and returned more than $20 billion to shareholders in 2024.
Exxon Mobil Q4 EPS came in at $1.67, down 33% compared to a year ago, with revenue totaling $83.43 billion, marking a 1% decrease vs. Q4 2023. Ahead of Friday's quarterly report, the analyst consensus estimate had Exxon earnings of $1.55 and revenue hitting $86.33 billion, according to FactSet.
Meanwhile, Chevron's fourth-quarter earnings dropped 40% to $2.06 per share while sales increased 10.7% to $52.23 billion. Analysts had pegged Q4 profit of $2.11 per share and sales totaling $46.60 billion.
Prior to the fourth-quarter result, Exxon's earnings had declined an average of 15% over the past four quarters. The company is projected to continue logging double-digit declines through the second quarter. Chevron averaged a 26% drop over the same period, though analysts see earnings performance improving beginning in the current quarter.
Exxon Mobil, for the full year, reported net production was at the highest level in more than ten years at 4.3 million oil equivalent barrels per day, an increase of 16%, or 595,000 oil-equivalent barrels per day, compared to 2023.
"As we look ahead, we've built a long runway of value creation. We're confident we'll deliver on the plans we laid out to generate significantly more earnings and cash – not only to 2030, but well beyond," Exxon Chief Executive Darren Woods said in the earnings release.
For Chevron, worldwide and U.S. net oil-equivalent production set annual records in 2024. The supermajor's worldwide production increased 7% to 3.338 million barrels of oil equivalent per day, primarily due to nearly 18% growth in the Permian Basin and PDC Energy production, Chevron reported Friday. U.S. net oil-equivalent production increased to 1.599 million barrels of oil equivalent per day, up 19% compared to 2023.
Chevron also returned $27 billion to shareholders in 2024 while Exxon Mobil distributed $36 billion to shareholders.
Exxon stock fell 2.5% to 106.82 during market action on Friday while Chevron dropped 4.6% to 149.21. On Thursday, CVX gained 0.4% to 156.32 and XOM advanced 0.8% to 109.57.
Collectively, the 22 stocks in the IBD-tracked Oil & Gas-Integrated industry group gained 6% for 2024 and are up another 7.5% in January.
Meanwhile, West Texas Intermediate oil prices traded around $72.63 a barrel, vs. just below $78 at the end of January 2024. Brent futures, the international benchmark advanced to about $75.83 per barrel. Brent is trading around 9% below its year-ago price.
However, U.S. natural gas prices have swung wild, increasing more than 56% in that time frame, despite a 16% dip in January.
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Earnings Come After Production Guidance
At the end of Q3, Exxon announced it increased its fourth-quarter dividend by 4% to $0.99 per share after returning $9.8 billion to shareholders in Q3. Meanwhile in early December, Exxon Mobil went against the industry grain and boosted its capital spending outlook. The recent industry strategy has revolved defending balance sheets, directing funds back into stock repurchases and dividends, and increasing production through acquisitions.
On Dec. 11, Exxon Mobil announced planned capital spending of between $27 billion and $29 billion for 2025 — essentially unchanged from the 2024 target of $28 billion. For the 2026 to 2030 period, Exxon projected spending between $28 billion and $33 billion. The company said it would increase production modestly, around 18%, by the end of the decade, to 5.4 million barrels of oil equivalent per day.
Exxon has primarily grown by focusing on expanding its Permian Basin assets in the U.S. Its acquisition of Pioneer Natural Resources, announced in October, was a $59.5 billion step in that direction.
Meanwhile, Chevron on Dec. 5 whittled back its 2025 capex budget to between $14.5 billion and $15.5 billion, below its prior $15.5 billion to $16.5 billion in planned 2024 spending.
The U.S. supermajor awaits judgment on its acquisition of Hess, expected in the first half of 2025. Exxon, which operates the offshore Guyana project upon which Chevron's Hess deal hinges, claims it has the right of first refusal, ahead of Chevron's takeover.
Third Bridge energy analyst Peter McNally told IBD earlier this month that Chevron and OPEC are in a "holding pattern" while Exxon is looking to grow. McNally added that Chevron has the "overhang of the Hess deal" that is weighing on the stock and production.
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Exxon Mobil Vs. Chevron: Guyana
The two supermajors are locked in a legal battle over their operations in Guyana. Chevron and Exxon Mobil are in an arbitration fight over Chevron's $53 billion acquisition of Hess, which would hand CVX a significant portion of Guyana's oil-rich offshore Stabroek block.
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, which includes both completed wells, and wells under development. China's CNOOC International holds a 25% interest in the project. Hess holds a 30% stake. The Exxon-led venture has been drilling wells 18,000 feet below the seafloor, with drillships working in water as deep as 8,900 feet.
Exxon claims it has the right of first refusal to the Hess deal. The arbitration hearing is scheduled for May 2025. Chevron previously hoped for a decision in Q4 2024.
Guyana Production
Exxon Mobil's affiliate Esso Exploration & Production Guyana Limited is the consortium operator. Hess and the Energy Information Administration estimate the area off Guyana's coast holds 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.
For comparison, the U.S. Gulf of Mexico offshore complex currently produces about 1.9 million barrels of oil per day.
In the second quarter, Exxon Mobil 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 startup in 2029, pending Guyanese government approval.
Hess reported on Wednesday that its Guyana net production totaled 195,000 bpd in Q4, up 52% from 128,000 bpd a year ago, and above its Q4 guidance. The company said this increase was primarily due to the startup of the third development, Payara, in the Stabroek block. Hess forecasts Q1 Guyana net production ranging from 180,000 bpd to 185,000 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.
XOM stock has a 49 Composite Rating out of a best-possible 99. CVX also has a 29 Relative Strength Rating and a 77 EPS Rating.
Please follow Kit Norton on X @KitNorton for more coverage.
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