ExxonMobil's Profits Top Estimates on Highest Production in a Decade

ExxonMobil, the world's largest publicly traded international oil and gas company, has reported fourth-quarter 2024 earnings of $7.6 billion, or $1.72 per share assuming dilution. This strong performance was driven by record production in the Permian and Guyana basins, as well as record sales volumes of high-value products. The company's earnings per common share (EPS) of $1.72 topped analysts' estimates of $1.56, according to LSEG data.



ExxonMobil's success in these regions can be attributed to several factors:

1. Permian Basin: ExxonMobil became the largest oil producer in the Permian basin after acquiring Pioneer Natural Resources in May 2024. This acquisition allowed the company to leverage its low production costs and lucrative projects in the region. The Permian basin's high oil production and low costs helped ExxonMobil offset lower oil prices and weaker refining margins, contributing to its earnings and cash flow.
2. Guyana: ExxonMobil achieved record production in Guyana, with the company's investments in the region paying off through high-value product sales volumes. Guyana's oil projects, such as the Liza Phase 1 and 2 developments, have been instrumental in driving ExxonMobil's earnings and cash flow. The company's unique investment opportunities in Guyana give it profitable growth well into the future.



ExxonMobil's strong financial performance in 2024 was also driven by its ability to generate significant cash flow from operations and free cash flow. The company distributed $36.0 billion to shareholders, more than all but five companies in the S&P 500. This distribution included $16.7 billion in dividends and $19.3 billion in share repurchases, consistent with announced plans.

ExxonMobil's return on capital employed (ROCE) led the industry for the year at 12.7% and for the five-year average at 10.8%. This strong performance can be attributed to the company's focus on cost-cutting measures, growing production and sales in high-value areas, and distributing significant cash to shareholders. These strategies have helped ExxonMobil maintain its competitive edge in the industry.

However, ExxonMobil faces challenges in the coming years, such as rising inflation in energy production and the need to balance the demands of investors with the need to maintain production levels. The company will need to navigate these challenges while continuing to generate strong earnings and cash flow, as well as maintaining its dividend payouts and share buybacks.

In conclusion, ExxonMobil's record production in the Permian and Guyana regions, along with its strong financial performance in 2024, has positioned the company as a leader in the oil and gas industry. The company's ability to generate significant cash flow and distribute it to shareholders, combined with its strong ROCE, has solidified its position as a top performer in the sector. As ExxonMobil looks ahead, it will need to address the challenges it faces while continuing to deliver on its plans to generate significantly more earnings and cash – not only to 2030, but well beyond.