NEW YORK: US oil giants Exxon Mobil and Chevron reported mixed results Friday, as lower oil and natural gas prices blunted the handsome production increases in the hot Permian Basin shale region.
Shares of both companies lost value after the results, which were released amid volatility in the oil and stock markets.
US oil prices recovered somewhat Friday after suffering their biggest drop in more than four years following the latest escalation in the US-China trade war. Other petroleum-linked equities such as Halliburton and Schlumberger also fell sharply on Friday.
The poor reception to the results on Wall Street is a "reflection of fears of some sort of global meltdown in the global economy," said Stewart Glickman, an analyst at CFRA Research.
"Investors may be dubious about oil's prospects if there's some kind of global recession due to the US-China trade war."
Profits at Exxon Mobil dropped 20.7 percent from the same quarter last year, falling to $3.1 billion. Revenues dropped six percent to $69.1 billion.
The US oil giant scored a 7.2 percent increase in oil and gas production, citing growth in the Permian Basin and at Hebron, an offshore project in Canada. The company also benefited from a one-time gain of $500 million due to a favorable tax change in Canada.
But Exxon Mobil suffered significant drops in profit in chemicals and refining due to an increase in plant "turnarounds," lengthy planned maintenance work, and unplanned downtime at facilities in Texas, Canada and Saudi Arabia.
- Chevron profits jump -
Chevron, in contrast, saw profits jump 26.3 percent from a year ago to $4.3 billion, as revenues declined 0.8 percent to $38.9 billion. As with Exxon Mobil, the results included a one-time gain of $180 million due to the Canada tax change.
There was an additional one-time benefit of $740 million Chevron received as a breakup fee when it was outbid by Occidental Petroleum in a takeover battle for major Permian Basin producer Anadarko Petroleum.
Production in the Permian has boosted overall US output to a series of records in recent years. The basin was the prime source of growth of nearly 1.5 million barrels per day from Texas and New Mexico from January 2018 to April 2019, according to the US Department of Energy.