In a recent financial update, Exxon Mobil (NYSE:) et al Chevron (NYSE:NYSE:) beat earnings expectations for the third quarter, attributing their success to a record increase in oil production. This achievement gave them an advantage over their European counterparts, who have invested heavily in renewable energy sources.
Exxon posted an impressive 24% year-over-year increase in oil production, reaching 4.6 million barrels of oil equivalent per day (boe/d), largely due to its acquisition of Pioneer Natural Resources (NYSE:PXD). and Denbury. Chevron also saw a significant increase in production, rising 14% to 1.61 million boe/d, driven by its U.S. shale operations and expansion plans in Kazakhstan.
Despite lower global refining margins, which affected the entire sector, both companies managed to minimize profit losses compared to their European rivals. Exxon's profits fell only 5%, while Chevron saw a 21% decline. In comparison, BP (NYSE:BP) suffered a 30% drop, and TotalEnergies (EPA:TTEF) reported a 37% drop in adjusted net income.
Exxon's earnings per share of $1.92 beat Wall Street forecasts by four cents, and Chevron's adjusted earnings of $2.51 per share also beat analysts' estimates of $2.42, according to LSEG data. This favorable financial news led to a nearly 2% increase in their stock prices in pre-market trading.
Both companies achieved record oil and gas production in the Permian Basin, America's premier shale field. Exxon's production in the region hit a new record of 1.4 million boe/d, and it shows no signs of slowing its operations. Chevron also reported a 22% increase in production in the Permian, reaching a record 950,000 boe/d, driven in part by its acquisition of PDC Energy (NASDAQ:PDCE), and aims to reach 1 million boe/d in the field by next year.
Exxon Chief Financial Officer Kathryn Mikells expressed optimism about the company's growth prospects, saying: “We see tremendous opportunities to invest in profitable growth in both our existing and new businesses. ” Meanwhile, Chevron's progress was temporarily hampered by regulatory delays in its $53 billion takeover of Hess (NYSE:HES), but the company continues to make progress on its U.S. shale and international projects.
Although the companies' robust production has shielded them from some market challenges, they remain cautious about the future, with uncertainties such as fluctuations in demand in China and potential changes in OPEC production restrictions which are looming on the horizon.
Reuters contributed to this article.
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