Exxon beats profit estimates as higher output counters weaker oil prices

The logo for ExxonMobil appears above a trading post on the floor of the New York Stock Exchange. (AP Photo/Richard Drew, File)

HOUSTON — Exxon Mobil, the United States’ biggest oil producer, beat Wall Street estimates for second-quarter profit on Friday as higher oil and gas output and low production costs offset the impact of lower crude prices.

Oil and gas production was the highest for any second quarter since the merger of Exxon and Mobil formed the company more than 25 years ago, Exxon Mobil said.

Adjusted earnings during the second quarter were US$7.1 billion, or $1.64 per share, surpassing consensus analyst estimates of $1.56 per share, data compiled by LSEG showed.

The energy sector has struggled with price volatility as the OPEC+ group increased its production, pushing global benchmark Brent crude prices LCOc1 down 11 per cent in the quarter.

Global tariffs levied by U.S. President Donald Trump added to price weakness because they raised the prospect of a weakening global economy with knock-on effects for oil demand.

“The second quarter, once again, proved the value of our strategy and competitive advantages, which continue to deliver for our shareholders no matter the market conditions or geopolitical developments,” Exxon CEO Darren Woods said in a statement.

Shares of Exxon were slightly higher in pre-market trading.

Exxon paid $4.3 billion in dividends and repurchased $5 billion worth of shares during the quarter. The buyback figure puts the company on track to meet its annual share repurchase goal of $20 billion.

The company’s main production areas include the Permian basin, the largest U.S. oilfield, as well as the prolific Stabroek Block off the coast of Guyana.

The low cost of production in those fields allows them to stay profitable even during times of lower oil prices, Exxon has said previously.

Global production totaled 4.6 million barrels of oil equivalent per day during the quarter, up from 4.5 million boed in the previous three months.

The start-up of Yellowtail, a fourth floating production, storage and offloading facility in Guyana, is anticipated next week, the company said.

In a press briefing, Woods said he would assess opportunities for acquisitions, but with a high bar.

“We’re not interested in buying volume,” he said. “We’re very focused on creating value.”

Last month, Exxon lost a legal challenge against Hess, one of its partners in Guyana, which cleared the way for rival Chevron to complete its acquisition of Hess.

Exxon argued it had a contractual pre-emptive right to purchase Hess’ 30 per cent stake in the Stabroek Block.

Woods said Exxon sought out legal opinions from neutral, third parties about the joint operating agreement that governed the partnership between Exxon, Hess and China’s CNOOC in Guyana.

“In every case, and I mean in literally every case, we were told that our rights were clear,” Woods said.

The arbitrators said that Exxon had a commercially reasonable argument but that it relied on a narrow textual interpretation, Woods said, adding that the company would take steps to strengthen future contracts as needed.

Earnings from oil and gas production were $5.4 billion, down from $6.7 billion in the first quarter.

Exxon said it expects lower scheduled maintenance in its refining business during the third quarter.

(Reporting by Sheila Dang in Houston;Editing by Marguerita Choy, Nia Williams and Barbara Lewis)