Exxon, Chevron are producing record amounts of oil, but lower prices led to lower earnings

By Claudia Assis and Tomi Kilgore

While results fell from a year, both oil and gas giants beat Wall Street expectations, but their stocks slipped after surging in recent weeks

Wall Street was keen on Chevron, Exxon's views on Venezuela.

Both Chevron and Exxon Mobil both said production of oil and gas reached historic levels, but also saw profit and revenue decline as energy prices fell.

The results still topped Wall Street expectations, but the stocks both pulled back in early Friday trading, following surges in recent weeks - heading for the biggest monthly gains in more than four years - to fresh highs.

Chevron (CVX) said total net oil-equivalent production in the fourth quarter increased 20.7% from the same period a year ago, and was up 12% for the year to hit record levels. Exxon (XOM) said it had the highest annual production in more than 40 years, with production from advantaged, or more profitable assets, setting new quarterly levels.

And with Venezuela in the spotlight, Chevron said it sees potential to grow production volume by up to 50% over the next couple years.

Meanwhile, Chevron reported net income that fell 14.5% from a year ago to $2.77 billion, while adjusted earnings per share, which excludes nonrecurring items, slipped to $1.52 from $2.06.

For Exxon, net earnings fell 14.5% to $6.5 billion, while adjusted EPS edged up to $1.71 from $1.67.

The average EPS estimate of analysts polled by FactSet for Chevron was $1.42 a share, and was $1.70 for Exxon.

Chevron's total revenue was down 10.2% to $46.87 billion, which topped the FactSet consensus of $46.8 billion. Exxon's revenue declined 1.3% to $82.31 billion to beat expectations of $80.6 billion.

Exxon said it could see production dip in the first quarter, due to potential volume impacts from more-than-anticipated outages in Kazakhstan and the impacts from the recent winter storm.

Both companies said earnings for their upstream, or production business, fell because of weaker "realizations" amid falling crude prices. Continuous crude oil futures (CL00) ended the fourth quarter at $57.42, according to FactSet data, down from $71.72 at the same time a year ago.

Chevron's stock slipped 0.13% in premarket trading on Friday. Exxon Mobil shares shed 0.7%.

On Thursday, Exxon's stock ended at a record, the latest of a string of all-time highs. It has run up and 16.8% in January through Thursday, which puts it on track for the best one-month performance since October 2022.

And Chevron's stock closed Thursday at its highest price since April 24, 2023, and was up 12.3% for the month, which would also be the best month since October 2022.

What's helping drive up the stocks in January is a rally in crude-oil futures, which settled at a six-month high on Thursday on concerns about oil disruptions amid tensions between the U.S. and Iran.

As of early Friday trading, crude futures have rallied 13.1% in January.

The two U.S. integrated giants have been very much on investors' minds this month, ever since the Jan 3. U.S. military raid in Venezuela that ended with President Nicolás Maduro in U.S. custody.

At a meeting at the White House a few days after the action, Exxon CEO Darren Woods candidly said Venezuela is "uninvestable" without deep legal and political changes - which didn't sit well with President Donald Trump, who threatened to cut the company out of any oil deals in Venezuela.

Exxon and U.S. exploration and production company ConocoPhillips (COP) exited Venezuela in the 2000s, amid waves of expropriations of the energy and mining industries by then-President Hugo Chávez, who Maduro succeeded.

Trump has said the U.S. would invest $100 billion in Venezuela and that plenty of energy companies are lining up to be part of that effort.

Unlike its rival, Chevron remained in Venezuela, but that doesn't mean it is ready to rush to make deep investments in the country. But the company did say on Friday that it was already delivering Venezuelan crude to the market, and sees "significant potential in our assets in the country."

Both Exxon and Chevron are deeply invested in places where returns are more likely, such as Exxon's investments in Guyana and Chevron's interests in Kazakhstan, not to mention the Gulf Coast and West Texas's Permian Basin at home.

Energy companies require political stability and physical and contractual security guarantees before venturing into the country, which has endured years of turmoil and whose oil industry is dilapidated.

Over the past 12 months through Thursday, Chevron shares have gained 9.5%. Exxon's stock has climbed 28.2%, while the S&P 500 index SPX has advanced 15.8%.

-Claudia Assis -Tomi Kilgore

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