Exxon 3Q gain increases in higher energy prices
Exxon 3Q gain increases in higher energy prices
Higher oil prices boosted Exxon's earnings in the third quarter to 57 percent to $ 6.24 billion despite another drop in production.
It was Exxon's best third quarter since 2014, when the effects of a collapse in oil prices had not yet been felt, and a sign that Big Oil is returning. Rival Chevron Corp. reported a doubling of quarterly profits to $ 4 billion.
Citi analysts said Exxon showed better results on Friday in its production and refining segments, which "helps support the case that the business is changing."
Oil companies are being driven by rising oil prices. Brent, the benchmark for international oil, has risen 16 percent from the previous year, even with a drop in the last month, and the standard of the United States, the middleman of West Texas, has climbed a 13 percent.
Shares of Exxon Mobil Corp. rose $ 1.28 to close at $ 81.95.
While the profit soared, Exxon's production continued to decline. Overall production decreased 2.4 percent compared to the third quarter of last year, largely due to the decline in natural gas production in the United States and Europe. That continued a theme of the last two years, in which the oil giant has struggled to maintain its production pace.
Still, it was an improvement over the weak second quarter production. And it was better than analysts expected, breaking a series of six consecutive errors in quarterly production, according to CFRA Research.
Exxon, like other oil giants, cut back on investment in large projects after prices began to collapse in mid-2014. It also suffered setbacks in some projects. Earlier this year, Exxon abandoned a major oil exploration agreement in Russia after US sanctions against Russia prevented the company from expanding the project.
As oil prices have recovered, Exxon has increased capital spending. The company is optimistic about its prospects off the coasts of Guyana, where it has drilled several exploratory wells, and Brazil, where it has increased its participation in an offshore basin to some 2.3 million acres. ExxonMobil will be the operator and will have a 64 percent stake in the Brazilian block.
At home, Exxon has increased activity in the oil-rich Permian Basin of Texas and New Mexico. President and CEO, Darren Woods, said the company hopes to increase production over time as drilling increases in the Permian and begins pumping oil and gas from new projects.
The drilling of Exxon in the USA UU It is increasingly "unconventional" in nature, as it uses hydraulic fracturing and horizontal drilling to extract more oil and gas from shale formations underground. The shale revolution, as it is called, has led to the production of EE. UU At record levels and has made the United States the world's leading oil producer, ahead of Russia and Saudi Arabia.
However, unconventional drilling is more expensive, and some analysts believe that shale production will be under pressure if a very recent drop in oil prices continues.
The US benchmark has retreated from around $ 76 to around $ 63 since early October. If oil falls much more, energy analyst Phil Flynn said Friday, "you can forget about increasing shale production in the future." Most shale oil producers struggled to make money when prices were higher. of the 70 dollars ".
Senior Vice President Jack Williams told analysts that as new projects begin, Exxon will consider selling other oil and gas assets in North America that "may be worth more to someone than to us." He refused to name the facilities that could be sold or say how fast it could happen.
Exxon, based in Irving, Texas, earned $ 1.46 per share. Unlike many companies, Exxon does not adjust its earnings per share to exclude single gains such as the sale of approximately 1,000 Esso service stations in Germany. He received earnings from that sale on the last day of the quarter, part of $ 1.5 billion in asset sales during the period. The average forecast among the seven analysts surveyed by Zacks Investment Research was earnings of $ 1.21 per share.
Revenues increased 25 percent to $ 76.61 billion in the period. Three analysts surveyed by Zacks expected $ 72.45 billion.
Exxon shares have fallen 2 percent since the beginning of the year, compared to a 2 percent increase in the Standard & Poor's 500 index at that time.
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