Exxon and Chevron profits soar as Big Oil returns to domination
Exxon and Chevron profits soar as Big Oil returns to domination
each of them reported their highest profits in the third quarter in four years, as the world's largest oil companies seemed finally to have overcome the discomfort of a fall in oil prices for a year.
Exxon's profits increased 57% to $ 6.240 million, as improved operations helped the company obtain the benefits of higher drilling prices and better refining margins. Chevron's profit doubled to $ 4 billion and its production in the Permia basin red hot in western Texas and New Mexico they increased 80%.
Shares of both companies recovered on Friday, reflecting the performance of almost all other major Western energy companies.
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All went well with investors in the last week after beating earnings forecasts.
The profits of the big oil companies plummeted amid a global fall in oil prices that began in 2014 and lasted several years. But prices have recovered this year and, as a result, companies experienced a marked increase in their earnings in the third quarter.
Investors had been disappointed by the performance of Exxon and Chevron before today. The prices of the shares of the companies had fallen around 4% in the last 12 months, despite the fact that oil prices increased around 30%. Exxon, in particular, had faced operational challenges, and its quarterly production It reached the lowest level in a decade in the period April-June.
The company said it had made significant progress in these matters and that production reached the equivalent of some 3.8 million barrels of oil and gas per day in the last quarter, a slight decrease compared to the previous year. The executives said that new developments in areas such as Guyana and Brazil are the best projects the company has undertaken since Exxon and Mobil merged about two decades ago.
"Operating performance improved significantly compared to the second quarter," Exxon Chief Executive Darren Woods said.
Profit margins were also expanded in the refining sector for Exxon. The company was able to buy crude in some parts of the US UU And Canada that sold at a discount because it had no outlet to the sea after production exceeded the capacity of the pipeline.
Chevron's production set a company record of approximately 2.9 million barrels per day, including the new production of giant natural gas export projects in Australia and growth in North America.
Exxon and Chevron continued to significantly increase operations in the Permian Basin, one of the hottest oil fields in the world that has been unlocked by new fracking techniques. Exxon now has 38 platforms in operation in the region, and the unit of the company responsible for shale production recorded its third consecutive quarterly profit.
Chevron increased its production in the region to 338,000 barrels per day, an increase of about 150,000 barrels per day since the third quarter of last year. That level of growth is the equivalent of adding a medium-sized exploration and production company in the region, said Pat Yarrington, CFO of Chevron.
"We believe there is a potential for growth here as we continue to adjust our well location," he said.
Chevron anticipates that costs will increase in the region in 2019 between 5% and 10%, he said.
-Allison Prang contributed to this article.
Write to Bradley Olson in Bradley.Olson@wsj.com
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