Exxon surpasses Wall Street profit expectations, fueled by production in Guyana and the Permian region
Houston: Exxon Beats Q1 Earnings thanks to Guyana and Permian Boost
In the heart of a rollercoaster market, Exxon Mobil, the United States' biggest oil producer, raked in more cash than expected. This financial surge is credited to rich oil and gas production from Guyana and the Permian basin.
Exxon shelled out $4.3 billion in dividends and splurged another $4.8 billion on share buybacks during the quarter, setting the stage to meet its yearly buyback goal of $20 billion.
"In this volatile market, our investors can rest easy knowing we've got what it takes," said Exxon CEO Darren Woods in a statement.
With shares of Exxon dropping 9% over the past year, pre-market trading saw a slight 1% rise. The energy sector has been struggling to maintain balance after fears of global recession sparked by U.S. President Donald Trump's tariff announcements. oil prices plummeted due to a weakening economy's reduced energy needs and the OPEC+ group's production increase.
Exxon's Q1 profit clocked in at $7.71 billion or $1.76 per share, trumping analyst expectations of $1.73 per share.
Exxon's success differentiates it from Chevron, another U.S. oil giant, which delayed second-quarter share repurchases.
"Exxon's continued emphasis on share buybacks showcases their solid financial footing," said Biraj Borkhataria, an analyst at RBC Capital Markets, in a research note.
For the first quarter, Exxon's global oil and gas production stood at 4.55 million barrels of oil equivalent per day (boepd), up from 3.78 million boepd in the same period last year.
With operations within the Permian basin, the top U.S. oilfield, and the lucrative Stabroek block off the coast of Guyana, Exxon stands at the forefront. Lower Permian costs are reportedly under $35 per barrel, allowing profits even at lower oil prices.
The Permian contributed greatly to Guyana-powered earnings from oil and gas production, which shot up to $6.76 billion, compared to $5.66 billion in the same period last year. Refining profits dropped to $827 million, down from $1.38 billion a year prior.
However, Exxon and CNOOC find themselves in a legal battle with Chevron over its planned $53 billion acquisition of Hess, which has a 30% stake in a Guyana joint venture led by Exxon. Exxon and CNOOC argue they have priority to purchase Hess' stake. Court hearings are set for May 26 in London.
The Guyana-Permian duo has powered quarterly earnings, contributing an approximate $4 billion since 2019. While Guyana is a sub-$35/barrel break-even project, helped by offshore advancements and advantageous tax terms, the Permian profits from operational efficiency and infrastructure synergies, maintaining costs near industry-leading averages.
Despite registering 687 million cubic meters of gas flared (2019-2023), emitting 1.32M tons of CO₂ – equivalent to annual emissions from 287,000 cars – regulatory challenges persist as courts and activists question flaring practices in Guyana.
- Exxon's Q1 earnings surpassed expectations, largely due to the rich oil and gas production from Guyana and the Permian basin.
- In the first quarter, Exxon distributed $4.3 billion as dividends and spent another $4.8 billion on share buybacks.
- Exxon's CEO, Darren Woods, stated that the company is financially stable enough to reassure investors during this volatile market.
- Pre-market trading showed a slight 1% rise in Exxon's shares after a 9% drop over the past year.
- The energy sector has been struggling due to fears of a global recession and reducing energy needs caused by lower oil prices.
- Exxon's profits for Q1 were $7.71 billion, or $1.76 per share, compared to analysts' expectation of $1.73 per share.
- Exxon's focus on share buybacks emphasizes its solid financial standing, according to analyst Biraj Borkhataria.
- The Permian basin and Guyana operations have been the primary contributors to Exxon's quarterly earnings, generating roughly $4 billion since 2019. However, Exxon and CNOOC are embroiled in a legal battle with Chevron over a potential acquisition in Guyana.
