ExxonMobil and Chevron both reported a dip in profits Friday on lower refining margins and natural gas prices, but ExxonMobil's big takeover appears on track to close before Chevron's.
ExxonMobil, which had targeted the second quarter to complete a $60 billion takeover of US shale player Pioneer Natural Resources, reported profits of $8.2 billion, down 28 percent from the year-ago period.
Similar results from Chevron showed how the petroleum sector, while off its peak, remains highly profitable, enabling billions of dollars in shareholder payouts.
While commodity prices for liquid hydrocarbons rose slightly and ExxonMobil continued to score impressive volumes from Guyana, those benefits were more than offset by a 32 percent drop in natural gas prices.
The company's energy products business also experienced a big drop in earnings on weaker refining profit margins despite reporting record first-quarter refining throughout.
Revenues dipped four percent to $83.1 billion.
In a conference call with analysts, ExxonMobil Chief Executive Darren Woods expressed confidence in closing the Pioneer transaction in the second quarter, describing "constructive" work with US regulators reviewing the deal for competitiveness concerns.
"As we've said all along, we're very confident that there are no antitrust issues," Woods said.
Rival oil giant Chevron reported profits of $5.6 billion, down 16 percent on revenues of $48.7 billion, down four percent.
The earnings fall was due to lower refinery margins and natural gas prices, partly offset by increased production in the United States, Chevron said.
While ExxonMobil's Pioneer deal appears on the cusp of closing, Chevron's proposed $53 billion takeover of Hess hit a speedbump following a challenge from ExxonMobil.
At issue is Hess's 30 percent stake in the Stabroek Block offshore Guyana, a mammoth oilfield that was a driver of the Chevron's takeover. The issue became public in late February after Chevron announced the acquisition in October.
ExxonMobil, which holds 45 percent of Stabroek, has argued that Chevron-Hess transaction ignores a provision in the venture that gives it "pre-emption rights" and "diminishes an element of value due ExxonMobil," said Woods, adding that the company filed for arbitration on the matter.
Chevron Executive Mike Wirth told CNBC that a third-quarter hearing of the arbitration and a fourth-quarter resolution "would be appropriate."
While Chevron is "very confident" of Hess' position in the arbitration, Wirth said that Chevron could exit the transaction if Hess' arbitration over Guyana is unsuccessful.
Both oil giants continued to steer extra cash to shareholders, with ExxonMobil paying out $6.8 billion in dividends and stock repurchases during the quarter and Chevron allocating $6.0 billion.
Shares of ExxonMobil fell 3.8 percent in mid-morning trading, while Chevron dropped 0.7 percent.
