Chevron, Exxon Top Q3 Estimates as Permian Oil Production Swells

In the third quarter of 2024, Chevron and Exxon Mobil Corporation (ExxonMobil) delivered impressive results, driven by surging Permian Basin oil production. Both companies exceeded analyst estimates, demonstrating their ability to navigate a challenging market environment marked by a 20% decline in oil prices since early April.

Chevron's Permian output reached a new quarterly record, while Exxon achieved its highest liquids production in over 40 years. This growth was facilitated by strategic investments in the region, with Chevron's Anchor project and Exxon's Permian-focused initiatives contributing to the surge in production. The Permian Basin's low-cost, high-return nature has enabled both companies to maintain profitability despite lower oil prices, demonstrating the strategic value of their Permian Basin production strategies.

Cost-cutting measures and divestments have significantly contributed to Chevron's and Exxon's strong Q3 performances. Chevron targeted $2-3 billion in structural cost reductions by 2026, while Exxon achieved $11.3 billion in cumulative structural cost savings versus 2019, including an additional $1.6 billion during the year and $0.6 billion during the quarter. Both companies have been streamlining their portfolios, with Chevron planning to divest $10-$15 billion in assets by 2028 and Exxon on track to deliver cumulative savings totaling $15 billion through the end of 2027 versus 2019. These efforts have helped both companies improve their earnings power and financial stability.


Chevron and Exxon's refining and marketing segments had mixed impacts on their Q3 earnings. For Chevron, refining margins were down, contributing to a reduction in earnings compared to the previous year. However, Chevron's strong production growth in the Permian Basin and new projects in the Gulf of Mexico offset these declines, leading to a beat on earnings estimates. Exxon, on the other hand, reported record high-value product sales volumes in its Product Solutions segment, up 10% over the prior year-to-date, driving industry-leading third-quarter earnings of $8.6 billion. Despite a 20% decline in oil prices since early April, both companies' refining and marketing segments played a significant role in their respective Q3 performances.


Chevron and Exxon's robust buyback programs and dividend increases played a significant role in their strong Q3 performances. Chevron returned $7.7 billion to shareholders, while Exxon returned $9.8 billion. Chevron's dividend of $1.63 per share was up 6% year-over-year, while Exxon increased its quarterly dividend to $0.99 per share, a 4% increase. These payouts demonstrate their commitment to shareholder value and confidence in their financial health. Despite a 20% decline in oil prices since April, both companies maintained their buyback commitments, indicating their ability to generate substantial cash flow and manage risk effectively.

In conclusion, Chevron and Exxon Mobil's impressive Q3 results demonstrate their ability to navigate a challenging market environment and capitalize on the growth potential of the Permian Basin. Their strategic investments, cost-cutting measures, and divestment plans have contributed to their strong performances, solidifying their positions as industry leaders. As the energy landscape continues to evolve, these companies' commitment to shareholder value and financial stability bodes well for their long-term prospects.