Page 9 - NorthAmOil Week 31 2021

NorthAmOil PERFORMANCE NorthAmOil

Super-majors beat

profit expectations

US US-HEADQUARTERED super-majors Chev-
ron and ExxonMobil both beat analyst expecta-
tions with their latest quarterly results.
Chevron reported adjusted earnings of
$3.3bn, or $1.71 per share, during the second
quarter of 2021, with revenue coming in at
$37.6bn. Analysts had been expecting the com-
pany to earn $1.59 per share on $35.94bn in rev-
enue, according to estimates from Refinitiv.
ExxonMobil, meanwhile, reported earnings
of $4.7bn, or $1.10 per share, on $67.7bn worth
of revenue. According to Refinitiv, this was
compared with analyst expectation of $0.99 per
share, and $66.8bn worth of revenue.
Both super-majors bounced back from losses
in the second quarter of 2020 – when the impact
of the coronavirus (COVID-19) pandemic
was at its most pronounced and US oil prices
briefly dipped into negative territory. Chevron’s
adjusted loss for the second quarter of 2020 came
in at $2.9bn, or $1.56 per share, while ExxonMo-
bil reported a loss of $1.1bn, or $0.26 per share,
for that quarter.
By contrast, West Texas Intermediate (WTI)
prices are currently around $70 per barrel, while
Brent is trading at roughly $72 per barrel, allow-
ing major producers to boost their profits.
Both companies’ results also mark an
improvement on their figures from the first
quarter of this year, when they already appeared
to have turned a corner by reporting profits after saw its best quarter in company history.
earlier losses. And their latest announcements Chevron produced 3.13mn barrels of oil
signal confidence in their future earnings. equivalent per day during the second quarter
Indeed, Chevron said it was reinstating its of the year, while ExxonMobil reported output
share repurchase programme in a sign of opti- of 3.6mn boepd. In the latter’s case, this was a
Both super- mism for the coming months. decrease of 2% on the same quarter of 2020,
“Our free cash flow [FCF] was the highest in which ExxonMobil attributed to increased
majors saw two years due to solid operational and financial maintenance activity.
mounting performance and lower capital spending,” Chev- The results came after a quarter during which
ron’s chairman and CEO, Mike Wirth, stated. both super-majors saw mounting pressure to
pressure to make “We will resume share repurchases in the third make decarbonisation of their operations more
of a priority. In May, Chevron shareholders voted
quarter at an expected rate of $2-3bn per year.”
Meanwhile, ExxonMobil’s chairman and in favour of a proposal to cut Scope 3 emissions
decarbonisation CEO, Darren Woods, noted rising demand – those generated by the use of the company’s
of their and the improvements his company had imple- products. Chevron executives said in the com-
operations more mented during the first year of the pandemic. pany’s earnings call that it would provide more
“Positive momentum continued during the detail on its decarbonisation plans in an energy
of a priority. second quarter across all of our businesses as the transition spotlight event that will be held in
global economic recovery increased demand September.
for our products,” said Woods. “We’re realis- Meanwhile, an activist investor, Engine No.
ing significant benefits from an improved cost 1, succeeded in having three of its nominees
structure, solid operating performance and elected to ExxonMobil’s board as it puts pressure
low-cost-of-supply investments that, together, onto the super-major to step up its decarboni-
are generating attractive returns and strong cash sation efforts. ExxonMobil talked up its energy
flow to fund our capital programme, pay the div- transition initiatives in its second-quarter
idend and reduce debt.” release, saying its Low Carbon Solutions busi-
Woods added that this was particularly true ness had advanced “multiple CCS opportunities
of the super-major’s chemical business, which and low-emission fuels initiatives”.™

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