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Oil Stocks: Exxon, Chevron Earnings Fall Short With Crude Oil Above $100

Exxon Mobil (XOM) and Chevron (CLC) reported mixed first-quarter earnings Friday as crude oil prices stabilize above $100. Exxon and Chevron stock edged lower early Friday, but are near buy points.




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Oil prices have surged in recent months as the West turns away from Russian supply. And analysts had expected the price of a barrel of oil to skyrocket to $200. But Covid lockdowns in China, the biggest importer of crude oil, have turned off its economic engines for now. As a result, suppliers are better able to meet demand.

West Texas Intermediate crude futures fell as low as $95 a barrel on Monday, and closed just above $105 on Wednesday. Meanwhile, Brent crude fell to around $100 on Monday, but rebounded to about $108 on Wednesday.

Exxon Mobil Earnings

estimates: Analysts polled by FactSet expected Exxon earnings to balloon to $2.23 a share vs. 65 cents a year ago. Revenue was seen popping 40% to $82.838 billion.

Results: Exxon earnings per share jumped to $2.07 a share. Revenue jumped 53% to $90.5 billion.

The Q1 EPS excludes $3.4 billion, or 79 cents per share, related to Exxon’s planned exit from the Russia Sakhalin-1 project as a result of the Ukraine war.

Exxon increased its XOM stock buyback program to as much as $30 billion through 2023. In January the oil major summarized buybacks, announcing $10 billion at the time.

Capex totaled $4.9 billion for the quarter, in line with its full-year guidance of $21 billion to $24 billion.

Oil Stocks: Exxon

Shares was down 0.9% to $86.40 on the stock market today. Exxon stock rose 3% to 87.20 on Thursday. XOM-stock has a cup-with-handle buy point of 89.90, rebounding from its rising 50-day moving averageaccording to MarketSmith.

Exxon’s relative strength line is trending higher to near 2019 levels. It’s RS Rating is 96 out of a best-possible 99, while its EPS Rating is 73.

Exxon Boosts Resource Estimate

On April 26, Exxon said it hiked its recoverable resource estimate for its Stabroek Block in offshore Guyana to 11-billion oil-equivalent barrels, thanks to three new discoveries at the site. The previous estimate was for 10 billion barrels.

The three discoveries are southeast of the Liza and Payara developments and bring to five the discoveries made by ExxonMobil in Guyana in 2022.

While returning value to investors is a primary goal, Exxon, like other oil companies, is also earmarking funds to develop new business models to address climate change.

Exxon has announced $15 billion in investments in its Low Carbon Solutions business.

Chevron Earnings

estimates: Analysts expected Chevron earnings to nearly quadruple from a year earlier to $3.41 a share. Revenue was seen jumping almost 60% to $51.14 billion.

Results: Chevron earnings came in at $3.36 a share. Revenue leapt 70% to $54.37 billion.

Chevron is doing its part to grow domestic supply with US oil and gas production up 10 percent over first quarter last year,” said Chevron Chairman and CEO Mike Wirth. He added, “Permian Basin unconventional production grew to a record 692,000 barrels of oil equivalent per day ” in Q1.

The oil major raised its 2022 Permian guidance to 700,000-750,000 bpd, up 15% from 2021.

Chevron’s capital expenditures during the quarter increased to $2.8 billion, 10% higher than last year.

Chevron doesn’t have direct exposure in Ukraine and Russia, Wirth pointed out at a recent Investor Day conference.

“The Caspian Pipeline being really the only asset that we have that is in Russia,” he said. “So we don’t produce and sell out of Russia. We really just transit through Russia with our production from Kazakhstan.”

But there are secondary impacts from the Russian war in Ukraine, Wirth added. Shipping rates have gone up, as well as insurance premiums.

However, Chevron has increased its dividend 20% since Covid. On Jan. 26, it announced a quarterly dividend of $1.42, at a 6% increase.

Oil Stocks: Chevron

CVX stock fell 1.6% to 159.33 Friday morning. Shares popped 3.55% to 161.79 on Thursday, back above the 50-day line. CLC stock has a flat base buy point of 174.86.

Chevron’s relative strength line has also come down in the last few days, but its RS Rating remains high at 96. The company’s EPS Rating is 73.

Chevron Mulls Sale Of Some Assets

Chevron, which has vast operations in the lucrative Permian Basin, has posted three straight quarters of blockbuster earnings amid soaring demand for oil as economies around the world have reopened as Covid wanes.

However, Chevron is reportedly considering selling some of its assets in the Permian Basin as it slowly pivots to address climate change with new business models.

Reuters reported in September that Chevron is looking to sell its oil and gas assets in the Eagle Ford Basin in south Texas.

A Chevron spokesperson confirmed to Reuters that the company was marketing the assets for sale.

Chevron could rake in $1 billion to $2 billion for the assets, the report said.

The rise in crude oil prices has made sale of such lucrative properties. Oil companies like Chevron could use those proceeds to shore up cash balances, increase dividends and invest in alternative energy.

Follow Adelia Cellini Linecker on Twitter @IBD_Adelia.

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