Due to increased operations due to high commodity prices and tight spending controls, Exxon and Chevron reported record earnings in the second quarter of 2022.
Chevron recorded earnings of $11.62 billion for the three-month period, up from $3.08 billion in the second quarter of 2021.
Exxon, on the other hand, reported earnings of $17.9 billion in the second quarter of 2022 as opposed to $4.7 billion in the same period of 2021.
During premarket trading on Friday, shares of both firms increased by almost 3%.
Results from Chevron exceeded experts’ projections on both the top and bottom lines. Chevron generated $68.76 billion in sales during the second quarter, earning $5.82 per share before special items. According to estimates gathered by Refinitiv, analysts anticipated the business to earn $5.10 per share on $59.29 billion in revenue.
According to estimates from Refinitiv, Exxon outperformed expectations, earning $4.14 per share excluding items as opposed to the $3.74 per share anticipated. However, the company’s $115.68 billion in revenue fell short of the $132.7 billion experts had predicted.
The earnings come amid recent weakness in oil markets. Fears of the recession and what they would mean for the market for oil and petroleum products have affected the organization. In June, the energy sector reached a multi-year high, but since then, it has fallen 18%.
However, with a 35 percent increase, energy stocks are by far the best-performing sector this year. Utilities, which have gained just 2.4 percent, are the second-best sector.
The rise in energy stocks coincides with an increase in the cost of oil and gas as Europe looks to wean itself off of Russian fuel.
The businesses’ record-breaking quarter is sure to infuriate Washington even more. In order to protect consumers’ interests, President Joe Biden has urged businesses to increase production. Inflation is at its highest level in decades, in large part due to rising energy expenses.
Oil and gas corporations claim that their output is increasing. They also mention that similar macro issues, including labor, are present throughout the economy and that they must be dealt with.
“We more than doubled investment compared to last year to grow both traditional and new energy business lines,” Mike Wirth, the CEO and chairman of Chevron, said in a statement.
The company’s output in the Permian Basin increased by 15% from the previous year. The average sales price per barrel of oil for its U.S. operations was $89 in the second quarter, up from $54 in the corresponding time previous year.
Natural gas’s average selling price increased from $2.16 per thousand cubic feet in the second quarter of 2022 to $6.22 in the third.
The energy company raised its buyback program’s upper end of the range from $10 billion to $15 billion by increasing its guidance.
“Earnings and cash flow benefited from increased production, higher realizations, and tight cost control,” Exxon’s chairman and CEO, Darren Woods, made the announcement in a statement.
“Strong second-quarter results reflect our focus on the fundamentals and the investments we put in motion several years ago and sustained through the depths of the pandemic,” he added.
Exxon reported that in the second quarter, its oil-equivalent production increased by 4% from the first quarter to 3.7 million barrels per day.