ExxonMobil and Chevron reported sharp increases in earnings and cash flows

ExxonMobil and Chevron, the two largest US oil groups, reported sharp increases in earnings and cash flows for the third quarter, boosted by the rebound in oil and gas prices and the strength of their US shale operations. The strong earnings, which were better than analysts’ expectations, followed similarly healthy profits reported by European oil groups including BP and Royal Dutch Shell for the same period. For Exxon and Chevron it was their strongest quarter for cash generation since the slump in crude prices in the second half of 2014. Both companies reported rapid production growth in the Permian Basin of Texas and New Mexico, the heart of the renewed US shale boom, and said they were on course for continued expansion… The results suggest that the two companies’ investment in the Permian Basin is starting to pay off. Exxon’s oil production in the region was up 57 per cent in the third quarter compared to the equivalent period of 2017, while Chevron’s was up 80 per cent… Exxon’s earnings per share were $1.46, up 57 per cent from a year ago, while Chevron’s were $2.11, roughly double their level in the equivalent period of 2017.

Ed Crooks