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ExxonMobil beats profit forecast with Q3 surge, powered by acquisition, production gains

by the numbers

Exxon earned $8.6 billion, or $1.92 per share, for the three months ended Sept. 30. Photo via ExxonMobil.com

ExxonMobil's third-quarter profit beat analysts' expectations, as the oil and gas giant was helped by contributions from Pioneer Natural Resources, a recent acquisition.

Exxon earned $8.6 billion, or $1.92 per share, for the three months ended Sept. 30. A year earlier the Spring, Texas-based company earned $9.07 billion, or $2.25 per share.

The performance topped Wall Street's expectations, though Exxon does not adjust its reported results based on one-time events such as asset sales. Analysts surveyed by Zacks Investment Research were calling for earnings of $1.91 per share.

Revenue totaled $90.02 billion, falling short of Wall Street’s estimate of $93.51 billion.

Exxon’s net production reached 4.6 million oil-equivalent barrels per day during the third quarter, an increase of 5% compared with the previous quarter.

Oil prices have been falling recently after a retaliatory strike by Israel on Iran targeted military sites rather than the oilfields of the world’s seventh largest producer of crude. The long-term expectation is for oil prices to move lower, not higher. That’s because the balance between supply and demand has tilted toward supply, a dynamic that typically deflates oil prices.

Exxon announced in July 2023 that it would pay $4.9 billion for Denbury Resources, an oil and gas producer that has entered the business of capturing and storing carbon and stands to benefit from changes in U.S. climate policy.

Three months later it said it would spend $60 billion on shale operator Pioneer Natural Resources. That deal received clearance from the Federal Trade Commission in May.

Exxon said its board approved a 4% increase in its quarterly dividend, 99 cents per share.

Also on Friday, Chevron Corp. reported an adjusted profit of $2.51 per share on revenue of $50.67 billion. Wall Street was looking for a profit of $2.47 per share on revenue of $49.88 billion. Similar to Exxon, Chevron does not adjust its reported results based on one-time events such as asset sales.

Revenue and net income were lower than a year ago at the San Ramon, California, company, which is relocating its headquarters to Houston by year-end.

Chevron said it's continuing asset sales and is now targeting structural cost cuts of $2 billion to $3 billion through 2026, although it didn't provide specific details.

In morning trading, Exxon shares rose 35 cents to $117.13 while Chevron shares rose 3% to $153.69.

The Texas oil and gas giant earned $9.24 billion, or $2.14 per share, for the second quarter of 2024. Photo via exxonmobil.com

ExxonMobil second-quarter profit rises on Pioneer acquisition and surging production

looking back

ExxonMobil recorded one of its largest second-quarter profits in a decade on surging quarterly production from oil and gas fields in Guyana and the Permian basin in the U.S., as well its $60 billion acquisition of Pioneer Natural Resources.

The Texas oil and gas giant earned $9.24 billion, or $2.14 per share, for the three months ended June 30, topping last year's profit of $7.88 billion, or $1.94 per share.

The results topped Wall Street expectations, though Exxon does not adjust its reported results based on one-time events such as asset sales. Analysts surveyed by Zacks Investment Research were expecting earnings of $2.04 per share.

“We achieved record quarterly production from our low-cost-of-supply Permian and Guyana assets, with the highest oil production since the Exxon and Mobil merger," Chairman and CEO Darren Woods said in a prepared statement Friday.

The Pioneer deal contributed $500 million to earnings in the first two months after closing, Exxon said.

Revenue for the Spring, Texas, company totaled $93.06 billion, topping Wall Street's expectations for $90.38 billion.

Exxon's net production reached 4.4 million oil-equivalent barrels per day during the second quarter, an increase of 15% compared with the first three months of the year.

Oil prices are lower than they were at this point last year, and those high prices sent Exxon and other energy giants on a buying spree.

Exxon announced in July 2023 that it would pay $4.9 billion for Denbury Resources, an oil and gas producer that has entered the business of capturing and storing carbon and stands to benefit from changes in U.S. climate policy.

Three months later it said it would spend $60 billion on shale operator Pioneer Natural Resources. That deal received clearance from the Federal Trade Commission in May.

In October Chevron said it would buy Hess Corp. for $53 billion, joining the acquisitions race.

Chevron Corp. also reported its second-quarter financial results on Friday, which fell far short of profit expectations.

In addition, the company said that it is moving its headquarters from San Ramon, California, to Houston, Texas. Chevron expects all corporate functions to transition to Houston over the next five years, with positions in support of its California operations remaining in San Ramon. Chairman and CEO Mike Wirth and Vice Chairman Mark Nelson will move to Houston before the end of the year.

Chevron currently has about 7,000 employees in the Houston area and approximately 2,000 employees in San Ramon. The company runs crude oil fields, technical facilities, and two refineries and supplies more than 1,800 retail stations in California.

Its shares slipped 1.7% before the opening bell.

Shares of ExxonMobil Corp. fell slightly in premarket trading. Chevron shares fell 1.7%.

The politicians point to a recent Texas merger. Photo via Getty Images

Politicians urge Justice Department to prosecute alleged collusion, price-fixing by oil industry

call for action

Senate Majority Leader Chuck Schumer and 22 other Democratic senators are calling on the Department of Justice to “use every tool” at its disposal to prevent and prosecute alleged collusion and price-fixing in the oil industry.

In a letter Thursday to Attorney General Merrick Garland and other officials, the Democrats said a recent Federal Trade Commission investigation into a high-profile merger uncovered evidence of price-fixing by oil executives that led to higher energy costs for American families and businesses.

The FTC said earlier this month that Scott Sheffield, the former CEO of Texas-based Pioneer Natural Resources, colluded with OPEC and OPEC+ to potentially raise crude oil prices. Sheffield retired from the company in 2016 but returned as CEO in 2019. After retiring again in 2023, he continued to serve on its board.

The FTC cleared Houston-based ExxonMobil's $60 billion deal to buy Pioneer on May 2 but barred Sheffield from joining the new company’s board of directors. Pioneer, which is based in Dallas, said it disagreed with the allegations but would not impede closing of the merger, which was announced in 2023.

In a report, the FTC said collusion by Pioneer and others may have cost the average American household up to $500 per car in increased annual fuel costs, an amount Democrats called “an unwelcome tax that is particularly burdensome for lower-income families.'' Meanwhile, Exxon Mobil and other major oil companies collectively earned more than $300 billion in profits over the last two years, "a surge that many market experts believe cannot be explained away by increased production costs from the (coronavirus) pandemic or inflation,” Democrats said.

The letter calls for the Justice Department to launch an industry-wide investigation into possible violations of the Sherman Antitrust Act. It outlined how “Big Oil’s alleged collusion with OPEC is a national security concern that aids countries looking to undermine the U.S.," including Russia and Iran.

“Corporate malfeasance must be confronted, or it will proliferate," the letter said. “These alleged offenses do not simply enrich corporations; hardworking Americans end up paying the price through higher costs for gas, fuel and related consumer products. The DOJ must protect consumers, small businesses and the public from petroleum-market collusion."

The letter by Senate Democrats was the latest in a series of partisan actions targeting the oil industry.

Separately, Democratic Sen. Sheldon Whitehouse of Rhode Island and Democratic Rep. Jamie Raskin of Maryland have formally asked the Justice Department to investigate whether Exxon, Chevron and other oil companies misled the public over decades about the climate effects of burning fossil fuels. Whitehouse and Raskin led a multiyear investigation that uncovered what they described as “damning new documents that exposed the fossil fuel industry’s ongoing efforts to deceive the public and block climate action.”

Republicans, meanwhile, have attacked President Joe Biden's energy policies, including a freeze on liquefied natural gas exports, restrictions on new oil and gas leasing on a petroleum reserve in Alaska and a decision to charge companies higher rates to drill for oil and natural gas on federal lands.

Sen. John Barrasso, the top Republican on the Senate Energy Committee, said the Democratic president was “doing all he can to make it economically impossible to produce energy on federal lands.''

The letter released Thursday was signed by 23 Democrats, including Schumer, Whitehouse, Senate Commerce Committee Chairwoman Maria Cantwell of Washington state and Senate Judiciary Committee Chairman Dick Durbin of Illinois.

ExxonMobil got initial approval of its $60 billion deal to buy Houston-based Pioneer Natural Resources. Photo via ExxonMobil.com

ExxonMobil's $60B acquisition gets FTC clearance — with one condition

M&A moves

ExxonMobil's $60 billion deal to buy Pioneer Natural Resources on Thursday received clearance from the Federal Trade Commission, but the former CEO of Pioneer was barred from joining the new company's board of directors.

The FTC said Thursday that Scott Sheffield, who founded Pioneer in 1997, colluded with OPEC and OPEC+ to potentially raise crude oil prices. Sheffield retired from the company in 2016, but he returned as president and CEO in 2019, served as CEO from 2021 to 2023, and continues to serve on the board. Since Jan. 1, he has served as special adviser to the company’s chief executive.

“Through public statements, text messages, in-person meetings, WhatsApp conversations and other communications while at Pioneer, Sheffield sought to align oil production across the Permian Basin in West Texas and New Mexico with OPEC+,” according to the FTC. It proposed a consent order that Exxon won't appoint any Pioneer employee, with a few exceptions, to its board.

Dallas-based Pioneer said in a statement it disagreed with the allegations but would not impede closing of the merger, which was announced in October 2023.

“Sheffield and Pioneer believe that the FTC’s complaint reflects a fundamental misunderstanding of the U.S. and global oil markets and misreads the nature and intent of Mr. Sheffield’s actions,” the company said.

Senate Majority Leader Chuck Schumer, D-N.Y., said it was “disappointing that FTC is making the same mistake they made 25 years ago when I warned about the Exxon and Mobil merger in 1999.”

Schumer and 22 other Democratic senators had urged the FTC to investigate the deal and a separate merger between Chevron and Hess, saying they could lead to higher prices, hurt competition and force families to pay more at the pump.

The deal with Pioneer vastly expands Exxon’s presence in the Permian Basin, a huge oilfield that straddles the border between Texas and New Mexico. Pioneer’s more than 850,000 net acres in the Midland Basin will be combined with Exxon’s 570,000 net acres in the Delaware and Midland Basin, nearly contiguous fields that will allow the combined company to trim costs.

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Houston companies scoop up $31 million in funds from DOE, EPA methane emissions program

fresh funds

The U.S. Department of Energy and the U.S. Environmental Protection Agency announced the selection of seven projects from Houston companies to receive funding through the Methane Emissions Reduction Program.

The projects are among 43 others nationwide, including 12 from Texas, that reduce, monitor, measure, and quantify methane emissions from the oil and gas sector. The DOE and EPA awarded $850 million in total through the program.

The Houston companies picked up $31.7 million in federal funding through the program in addition to more than $9.5 million in non-federal dollars.

“I’m excited about the opportunities these will create internally but even more so the creation of jobs and training opportunities for the communities in which we work,” Scott McCurdy, Encino Environmental Services CEO, said in a news release. His company received awards for two projects.

“These projects will allow us to further support and strengthen the U.S. Energy industry’s ability to deliver clean, reliable, and affordable energy globally,” he added.

The Houston-area awards included:

DaphneTech USA LLC

Total funding: $5.8 million (approximately $4.5 million in federal, $1.3 million in non-federal)

The award was granted for the company’s Daphne and Williams Methane Slip Abatement Plasma-Catalyst Scale-Up project. Daphne will study how its SlipPure technology, a novel exhaust gas cleaning system that abates methane and exhaust gas pollution from natural gas-fueled engines, can be economically viable across multiple engine types and operating conditions.

Baker Hughes Energy Transition LLC 

Total funding: $7.47 million (approximately $6 million in federal, $1.5 million in non-federal)

The award was granted for the company’s Advancing Low Cost CH4 Emissions Reduction from Flares through Large Scale Deployment of Retrofittable and Adaptive Technology project. The project aims to develop a scalable, integrated methane emissions reduction system for flares based on optical gas imaging and estimation algorithms.

Encino Environmental Services

Total funding: $15.17 million (approximately $11 million in federal, $4.17 million in non-federal)

The award was granted for two projects. The Advanced Methane Reduction System: Integrating Infrared and Visual Imaging to Assess Net Heating Value at the Combustion Zone and Determine Combustion Efficiency to Enhance Flaring Performance project aims to develop and deploy an advanced continuous emissions monitoring system. It’s Advancing Methane Emissions Reduction through Innovative Technology project will develop and deploy a technology using sensors and composite materials to address emissions originating in storage tanks.

Envana Software Solutions

Total funding: $5.26 million (approximately $4.2 million in federal, $1 million in non-federal)

The award was granted for the company’s Leak Detection and Reduction Software to Identify Methane Emissions and Trigger Mitigation at Oil and Gas Production Facilities Based on SCADA Data project. It aims to improve its Recon software for monitoring methane emissions and develop partnerships with local universities and organizations.

Capwell Services Inc.

Total funding: $4.19 million (approximately $3.3 million in federal, $837,000 in non-federal)

The award was granted for its Methane Emissions Abatement Technology for Low-Flow and Intermittent Emission Sources project. It aims to to deploy and field-test a methane abatement unit and improve air quality and health outcomes for communities near production facilities and establish field technician internships for local residents.

Blue Sky Measurements 

Total funding: $3.41 million (approximately $2.7 million in federal, $683,000 in non-federal)

The award was granted for its Field Validation of Novel Fixed Position Optical Sensor for Fugitive Methane Emission Detection Quantification and Location with Real-Time Notification for Rapid Mitigation project. It aims to field test an optical sensing technology at six well sites in the Permian Basin.

Southern Methodist University, The University of Texas at Austin, Texas A&M Engineering Experiment Station and Hyliion Inc. were other Texas-based organizations to earn awards. See the full list of projects here.

Texas university's 'WaterHub' will dramatically reduce water usage by 40%

Sustainable Move

A major advancement in sustainability is coming to one Texas university. A new UT WaterHub at the University of Texas at Austin will be the largest facility of its kind in the U.S. and will transform how the university manages its water resources.

It's designed to work with natural processes instead of against them for water savings of an estimated 40 percent. It's slated for completion in late 2027.

The university has had an active water recovery program since the 1980s. Still, water is becoming an increasing concern in Austin. According to Texas Living Waters, a coalition of conservation groups, Texas loses enough water annually to fill Lady Bird Lake roughly 89 times over.

As Austin continues to expand and face water shortages, the region's water supply faces increased pressure. The UT WaterHub plans to address this challenge by recycling water for campus energy operations, helping preserve water resources for both the university and local communities.

The 9,600-square-foot water treatment facility will use an innovative filtration approach. To reduce reliance on expensive machinery and chemicals, the system uses plants to naturally filter water and gravity to pull it in the direction it needs to go. Used water will be gathered from a new collection point near the Darrell K Royal Texas Memorial Stadium and transported to the WaterHub, located in the heart of the engineering district. The facility's design includes a greenhouse viewable to the public, serving as an interactive learning space.

Beyond water conservation, the facility is designed to protect the university against extreme weather events like winter storms. This new initiative will create a reliable backup water supply while decreasing university water usage, and will even reduce wastewater sent to the city by up to 70 percent.

H2O Innovation, UT’s collaborator in this project, specializes in water solutions, helping organizations manage their water efficiently.

"By combining cutting-edge technology with our innovative financing approach, we’re making it easier for organizations to adopt sustainable water practices that benefit both their bottom line and the environment, paving a step forward in water positivity,” said H2O Innovation president and CEO Frédéric Dugré in a press release.

The university expects significant cost savings with this project, since it won't have to spend as much on buying water from the city or paying fees to dispose of used water. Over the next several years, this could add up to millions of dollars.

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A version of this story originally appeared on our sister site, CultureMap Austin.

Report: Texas solar power, battery storage helped stabilize grid in summer 2024, but challenges remain

by the numbers

Research from the Federal Reserve Bank of Dallas shows that solar power and battery storage capacity helped stabilize Texas’ electric grid last summer.

Between June 1 and Aug. 31, solar power met nearly 25 percent of midday electricity demand within the Electric Reliability Council of Texas (ERCOT) power grid. Rising solar and battery output in ERCOT assisted Texans during a summer of triple-digit heat and record load demands, but the report fears that the state’s power load will be “pushed to its limits” soon.

The report examined how the grid performed during more demanding hours. At peak times, between 11 a.m. and 2 p.m. in the summer of 2024, solar output averaged nearly 17,000 megawatts compared with 12,000 megawatts during those hours in the previous year. Between 6 p.m. and 9 p.m., discharge from battery facilities averaged 714 megawatts in 2024 after averaging 238 megawatts for those hours in 2023. Solar and battery output have continued to grow since then, according to the report.

“Batteries made a meaningful contribution to what those shoulder periods look like and how much scarcity we get into during these peak events,” ERCOT CEO Pablo Vegas said at a board of directors conference call.

Increases in capacity from solar and battery-storage power in 2024 also eclipsed those of 2023. In 2023 ECOT added 4,570 megawatts of solar, compared to adding nearly 9,700 megawatts in 2024. Growth in battery storage capacity also increased from about 1,500 megawatts added in 2023 to more than 4,000 megawatts added in 2024. Natural gas capacity also saw increases while wind capacity dropped by about 50 percent.

Texas’ installation of utility-scale solar surpassed California’s in the spring of last year, and jumped from 1,900 megawatts in 2019 to over 20,000 megawatts in 2024 with solar meeting about 50 percent of Texas' peak power demand during some days.

While the numbers are encouraging, the report states that there could be future challenges, as more generating capacity will be required due to data center construction and broader electrification trends. The development of generating more capacity will rely on multiple factors like price signals and market conditions that invite more baseload and dispatchable generating capacity, which includes longer-duration batteries, and investment in power purchase agreements and other power arrangements by large-scale consumers, according to the report.

Additionally, peak demand during winter freezes presents challenges not seen in the summer. For example, in colder months, peak electricity demand often occurs in the early morning before solar energy is available, and it predicts that current battery storage may be insufficient to meet the demand. The analysis indicated a 50% chance of rolling outages during a cold snap similar to December 2022 and an 80% chance if conditions mirror the February 2021 deep freeze at the grid’s current state.

The report also claimed that ERCOT’s energy-only market design and new incentive structures, such as the Texas Energy Fund, do not appear to be enough to meet the predicted future magnitude and speed of load growth.

Read the full report here.

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