Exxon Mobil (XOM) and Chevron (CVX), the two largest U.S. oil majors, reported second-quarter earnings Friday.
Both earning reports exceeded Wall Street expectations—despite a sharp year-over-year decline in profits and persistent pressure from falling oil prices. The reports come as both companies deepen ties in offshore Guyana and brace for shifting investor priorities.
Strong Operations Offset Soft Prices for Exxon Mobil
Exxon Mobil reported second-quarter earnings of $1.64 per share, above the $1.56 analysts had expected. Revenue came in at $81.5 billion, slightly ahead of estimates and a figure equivalent to over $900 million in daily sales. Though earnings were down nearly 23% from a year ago, the company delivered its highest second-quarter upstream production since the Exxon-Mobil merger in 1999.
Production reached 4.63 million barrels of oil equivalent per day (boepd), with international operations generating $4.19 billion in profit and U.S. production contributing $1.21 billion. Free cash flow stood at $5.4 billion for the quarter, with Exxon returning $9.2 billion to shareholders—$4.3 billion in dividends and another $5 billion via buybacks.
CEO Darren Woods emphasized the company’s focus on operational strength and long-term capital discipline. “The second quarter, once again, proved the value of our strategy and competitive advantages,” Woods said. “We achieved our highest second-quarter upstream production in over 25 years.”
Despite flat stock performance over the past 18 months and tepid oil demand, Exxon is on track to repurchase $20 billion of shares in 2025. The company has already retired 40% of the stock issued to fund its $60 billion acquisition of Pioneer Natural Resources.
Chevron Boosts Output, Seals Hess Deal After Arbitration Victory
Chevron posted adjusted earnings of $1.77 per share, topping expectations, though down more than 30% from the same quarter last year. Revenue totaled $44.82 billion, just shy of $500 million a day, but below 2024 levels due largely to weaker crude prices.
Production rose to 3.39 million boepd, with output from the Permian Basin hitting a record 1 million boepd. However, profit from oil and gas production fell to $2.73 billion from $4.47 billion a year earlier. Chevron also reduced capital expenditures by 7.5% year-over-year, helping maintain strong cash flow.
Crucially, the company finalized its $53 billion acquisition of Hess Corporation after winning a legal dispute with Exxon over Hess’s 30% stake in the Stabroek Block offshore Guyana. The international arbitration ruling clears the way for Chevron to gain a foothold in what is being called the largest oil discovery in a decade.
“This strengthens our portfolio and positions us to extend free cash flow growth well into the next decade,” CEO Mike Wirth said. Chevron expects production in Guyana to contribute meaningfully to shareholder returns, which totaled $5.5 billion last quarter.
Chevron also raised its 2026 free cash flow forecast to $12.5 billion, even as it held full-year buyback guidance between $10 billion and $20 billion. “We’ve got a strong program,” said CFO Eimear Bonner, “and we wouldn’t change it unless there’s a sustained and significant shift in commodity prices.”
Guyana, Shareholder Returns, and Strategic Alignment Take Center Stage
The earnings come amid increasing collaboration between Exxon and Chevron, including a recent $34 billion memorandum of understanding with Indonesia focused on energy infrastructure. Exxon will expand production in the Cepu Block while Chevron leads technology transfer and exploration efforts.
Their rivalry has turned into cautious cooperation, especially following Chevron’s entrance into the Exxon-led Guyana venture. The Stabroek Block, where Exxon retains a 45% stake, is expected to produce over 1 million barrels per day by 2026. With 11 billion barrels in recoverable reserves and ongoing deepwater development, Guyana is shaping up to be the industry's crown jewel.
Despite that, investor sentiment remains cautious. Both companies are trading below the broader market, reflecting uncertainty over oil prices and growing investor interest in electricity and AI-related energy infrastructure.
Outlook: Resilience Over Momentum
Exxon and Chevron are proving that efficient operations and disciplined capital allocation can generate solid returns—even when oil prices are soft. With Guyana production ramping up and shareholder payouts remaining robust, both companies are positioning for long-term resilience. Yet with Brent futures signaling oil could fall below $70 per barrel, and energy investors eyeing alternatives, the supermajors face a tough balancing act in the quarters ahead.
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