Exxon Mobil, Chevron Beat Earnings. But Only One Hiked Its Dividend.

Chevron (CVX) and Exxon Mobil (XOM) reported better-than-expected third-quarter earnings early Friday, even as both U.S. supermajors saw profits drop significantly compared to a year ago. Meanwhile, oil prices rose modestly off their recent lows and natural gas futures were effectively flat vs. the start of the year.

Exxon Mobil reported Q3 earnings fell 15% to $1.92 per share while sales totaled $90.02 billion, down about 1% compared to a year ago. Ahead of Friday, the analyst consensus estimate was for Exxon Mobil’s Q3 EPS of $1.88 and revenue coming in at $93.98 billion. Meanwhile, Chevron announced third-quarter profit decreased 17% to $2.51 per share as revenue declined 6% to $50.67. Expectations put Chevron earnings at $2.43 per share with sales coming in at $48.86 billion, according to FactSet.

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Exxon Mobil also announced it increased its fourth-quarter dividend by 4% to $0.99 per share after returning $9.8 billion to shareholders in Q3. Chevron returned a record $7.7 billion to shareholders in Q3.

Chevron said its Q3 earnings decline was primarily due to lower margins on refined product sales, lower realizations and the absence of prior year favorable tax items. Meanwhile, Exxon claimed its profit dip came on the back of lower crude realizations and higher exploration expenses.

The Q3 financial reports arrive as U.S. oil prices traded back above $70 per barrel Friday, riding the ebb and flow of concerns over the conflict between Israel and Iran. U.S. oil prices since July have traded between $65 and $78.

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Chevron stock gained 2.9% to 153.06 during market trading on Friday. Chevron ended October up 1%, after a two-month decline. Exxon Mobil shares fell 1.6% to 114.98 Friday after gaining a fraction to 116.78 Thursday.

In the second quarter, Exxon Mobil booked its first profit increase after four quarters of declines. However, Chevron Q2 EPS fell 17%. Exxon and Chevron both saw profit dips in Q1, primarily due to weaker refining margins and to natural gas prices coming down from last year’s highs.

Exxon Mobil Vs. Chevron: Guyana

In 2023, the two supermajors also saw earnings and revenue declines, as oil and natural gas prices weakened vs. prior-year levels — which had been driven higher by Russia’s invasion of Ukraine.

Meanwhile, the two companies are also locked in a legal battle over their operations in Guyana. Chevron and Exxon Mobil are in an arbitration fight over Chevron’s $53 billion acquisition of Hess (HES), which would hand CVX a significant portion of Guyana’s oil-rich offshore Stabroek block.

Exxon, which operates the Guyana project, claims it has the right of first refusal to the Hess deal. The arbitration hearing is scheduled for May 2025. Chevron previously hoped for a decision in Q4 2024.

Chevron Buys Into Stabroek

Toward the end of 2023, Chevron agreed to acquire Hess for $53 billion, also acquiring Hess’ share of the project offshore from Guyana. The energy industry touts offshore Guyana, a resource pioneered by Exxon, as the largest oil discovery in the last 10 years.

Exxon Mobil holds a 45% stake in Guyana’s Stabroek block, which includes both completed wells, and wells under development. China’s CNOOC International holds a 25% interest in the project. Hess holds a 30% stake. The Exxon-led venture has been drilling wells 18,000 feet below the seafloor, with drillships working in water as deep as 8,900 feet.

Exxon Mobil’s affiliate Esso Exploration & Production Guyana Limited is the consortium operator. Hess and the Energy Information Administration estimate the area off Guyana’s coast holds recoverable resources of more than 11 billion barrels of oil equivalent. Industry projections have Guyana producing more than 1 million barrels per day (bpd) by 2026.

The U.S. Gulf of Mexico offshore complex currently produces 1.9 million barrels of oil per day. The Energy Information Administration estimates the Permian Basin in west Texas and New Mexico will produce about 6.3 million barrels per day in 2024. It is estimated to hold 50 billion recoverable barrels in the Wolfcamp and Bone Spring formations alone.

In the second quarter, Exxon Mobil submitted an application to the Guyanese Environmental Protection Agency for a proposed seventh project. Production capacity is expected to be 120,000 to 180,000 barrels per day, with anticipated startup in 2029, pending Guyanese government approval.

Guyana Production

Hess reported on Wednesday that its Guyana net production totaled 170,000 bpd in Q3, up 57% from 108,000 bpd a year ago. The company said this increase was primarily due to the startup of the third development, Payara, in the Stabroek block. Hess forecasts Q4 Guyana net production ranging from 185,000 bpd to 190,000 bpd.

Exxon Mobil is producing around 400,000 bpd in Guyana, all from the Stabroek. Exxon expects output of 1.2 million bpd by the end of 2027. At the end of the second quarter, Exxon Mobil predicted a drop in Guyana volumes of around 80,000 barrels of oil per day in Q3 due to project work.

Exxon Mobil Outpaces Chevron In 2024

Exxon Mobil stock has neatly outperformed Chevron so far this year. CVX is down around 1% in 2024. It is 10% below its high for the year, set in May.

Meanwhile, Exxon Mobil stock has advanced 17%. It rallied to a record high in early October as U.S. oil prices jumped above $77 a barrel on rising tension in the Middle East.

Meanwhile, Shell (SHEL) gained 3% Thursday after delivering better-than-expected third-quarter results, with EPS running flat compared to a year ago. On Tuesday, BP (BP) reported third-quarter earnings cratered 28% while revenue missed views. BP stock fell more than 5% Tuesday, to its lowest level since September 2022.

U.S. oil prices traded around $69 per barrel on Friday, but brisk U.S. production and weak demand in China continue to weigh on the market. Brent futures, the international benchmark, traded just above $73 per barrel on Friday.

Both U.S. and Brent oil prices are down about 13% over the past 12 months. Natural gas prices have swung higher and lower, but are currently trading two cents below where they started the year.

Chevron stock has a 42 Composite Rating out of a best-possible 99. CVX also has a 28 Relative Strength Rating and a 64 EPS Rating.