Oil Majors Post Good Financial Results Above Estimates

Global oil and gas giants have released their financial results all showing better performances despite challenges.

Oil majors are expected to report 2023 profits down by about a third from record levels in 2022, as oil and gas prices retreated from the peaks that followed Russia’s invasion of Ukraine.

Top oil producers are writing off unwanted assets and cleaning up their balance sheets ahead of pending deals.

Chevron has said it would take an about $4 billion impairment in the fourth quarter, while Shell took a $5.5 billion write-down.

Brent crude futures in the fourth quarter averaged $82.85 a barrel, a 7 per cent decrease compared to the same period last year and a 4 per cent decline from the third quarter.

According to results monitored by our Correspondent, Chevron beat earnings estimates and raised dividends after posting record oil and natural gas production.

The result boosted chief executive officer Mike Wirth’s effort to rebound from a year of missed performance targets.

Adjusted earnings of $3.45 a share exceeded the Bloomberg Consensus estimate by 23 cents.

Chevron raised its dividend by almost 8 per cent to $1.63 a share, also ahead of forecasts.

The No. 2 U.S. oil and gas operator incurred $3.7 billion of charges stemming mostly from assets in its home state of California and the dismantling of decades-old infrastructure in the Gulf of Mexico.

Annual production climbed 4 per cent, primarily boosted by rising output in the Permian basin and other U.S. fields.

Shell Plc was the first member of the oil and gas industry to post fourth-quarter results, announcing last Thursday $7.31 billion in adjusted net income that was more than $1 billion higher than the average forecast.

Chevron had a tough 2023 in some respects, when its stock underperformed rivals, dropping 17 per cent amid production disappointments and cost overruns from the Permian basin to Kazakhstan.

The company already has a challenged growth outlook compared to competitor Exxon Mobil Corp., and operational missteps only added to investor concerns.

CEO Wirth has raised share buybacks and orchestrated the Hess Corp. takeover to acquire, among other things, a 30 per cent stake in Exxon’s offshore Guyana project, one of the world’s fastest-growing oil provinces.

Chevron urged employees late last year to step up their performance after internal safety, operating and financial targets were missed. Chief financial officer Pierre Breber encouraged them in an email to “do better” by being “consistent and disciplined” in following company protocols.

The company shocked analysts and investors last year by announcing yet another delay and cost increase to its Tengiz development in Kazakhstan, a key megaproject that’s been years in the making. Investors will be watching closely for updates on the project during a conference call with analysts scheduled for 11 a.m. New York time.

In addition, Exxon Mobil, posted a better-than-expected $36 billion profit for 2023, lifted by fuels trading and higher oil and gas production, Reuters reported.

Exxon results included a $2.5 billion impairment charge for California properties that it has been trying to sell for more than a year. Excluding that charge, annual income fell 35 per cent to $38.57 billion.

For the fourth quarter, Exxon reported a better-than-expected profit of $9.96 billion, or $2.48 per share, compared to $14.04 billion, or $3.40 per share, a year earlier.

The results were driven by higher trading profits in its fuels business and increased oil and gas production in the US and Guyana, Chief Financial Officer Kathryn Mikells, told Reuters.

Fourth-quarter results were helped by Exxon’s trading division, which delivered a $1.1 billion boost to operating profit from its fuels business.

“That is definitely something that we would expect to see on an ongoing basis embedded in our results,” Mikells said.  Gains came from revising how its specifies and moves fuels, she added