ExxonMobil and Chevron have both reported third-quarter profits sharply down after oil and gas prices receded from last year’s highs.
Exxon, the world’s biggest oil company that is not government-owned, made net profits of $9.1 billion in the three months to September, down by 54 per cent from $19.7 billion in the same period of 2022.
Chevron, the second biggest, said its third-quarter earnings fell by 42 per cent to $6.5 billion from $11.2 billion the prior year. Its results were significantly weaker than analysts had forecast, sending its shares down 6.7 per cent to close at $144.35 while Exxon’s also fell slightly short of expectations. Its shares closed 6.7 per cent lower at $144.35.
Both companies are in the midst of bumper takeovers: Exxon agreed this month to buy the American fracking specialist Pioneer Natural Resources for $60 billion, and Chevron this week agreed a deal to acquire Hess, a US-based group with operations in the Americas and Asia.
Exxon, based in Texas and valued at almost $420 billion, produced the equivalent of 3.7 million barrels of oil a day in the third quarter, down fractionally from a year earlier. Chevron, based in California and valued at about $275 billion, produced 3.1 million barrels a day, up 4 per cent from a year earlier after acquiring PDC Energy.
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Both companies’ financial results remain strong by historical standards but reflect the retreat in prices from much higher levels seen after Russia’s invasion of Ukraine. Similar profit slumps are expected to be seen in the third-quarter results of Shell and BP, both of which are due to report next week. Brent crude, the benchmark global oil price, averaged $86.75 a barrel in the third quarter, down from $100.84 a barrel in the same period last year, as concerns about the health of the global economy weighed on markets.
Gas prices fell even more dramatically, having spiked to record highs in August 2022 after Russia curtailed pipeline supplies to Europe. They have been much lower this year after a mild winter and plentiful supplies of liquefied natural gas helped ease fears of shortages.
UK benchmark gas prices tumbled 71 per cent from an average of 281p a therm in the third quarter of last year to 82p a therm in the same period this year, and Henry Hub, the American gas benchmark, fell by 69 per cent over the same time frame, according to BP data.
Biraj Borkhataria, an analyst at RBC Capital Markets, said Chevron’s weaker-than-expected result was “disappointing, but looked partly reflective of some non-recurring items which have not been treated as exceptional”.
