Exxon, Chevron Profits Soar as Big Oil Returns to Dominance-- update

By Bradley Olson 

Exxon Mobil Corp. and Chevron Corp. each reported their highest third-quarter profits in four years as the world's largest oil companies appeared to have finally shaken off the doldrums of a yearslong oil price crash.

Exxon's net income rose 57% to $6.24 billion as improved operations helped the company reap the benefits of higher prices for drilling and better refining margins. Chevron's profits doubled to $4 billion.

Both companies beat expectations and rallied Friday, following the performance of nearly all the world's largest Western energy companies. BP PLC, France's Total SA and Norway's Equinor ASA have all fared well with investors in the past week after exceeding profit forecasts.

Big oil companies saw their profits slump following a world-wide plunge in oil prices that began in 2014 and lasted several years. But prices have recovered this year, and the companies saw a marked uplift to their profits as a result in the third quarter.

Investors had been underwhelmed with Exxon and Chevron's performance in the past year. Before today, the companies' stock prices had fallen by about 4% in the last 12 months even as oil prices rose by about 30%, reflecting the disappointment of some shareholders. Exxon in particular had faced operational challenges, and its quarterly production from April to June had reached the lowest level in a decade.

The company said it had resolved those issues and production reached about 3.8 million barrels a day, a slight decline from a year ago.

"Operational performance improved significantly versus the second quarter with lower levels of scheduled maintenance and reliability levels in line with our expectations," Exxon Chief Executive Darren Woods said.

Chevron production set a company record of about 2.9 million barrels a day, including new output from giant natural-gas export projects in Australia and growth in North America.

"Our strong financial results reflect higher production and crude oil prices coupled with a continued focus on efficiency and productivity," Chevron Chief Executive Michael Wirth said.

Exxon and Chevron continued to significantly ramp up operations in the Permian basin in Texas and New Mexico, one of the hottest oil fields in the world. Exxon now has 38 rigs running in the region, and the company unit responsible for shale production reported its third-straight quarterly profit.

Profit margins also rose in the refining sector for Exxon. The company was able to buy crude in some parts of the U.S. and Canada that sold at a discount because it was landlocked after production outstripped pipeline capacity.

--Allison Prang contributed to this article.

Write to Bradley Olson at [e-mail]

(END) Dow Jones Newswires

November 02, 2018 09:37 ET (13:37 GMT)

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