Released February 13, 2025 | SUGAR LAND
en
Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--Investors had mixed reactions when four integrated supermajor oil companies reported fourth-quarter and full-year 2024 results in recent weeks. Fourth-quarter earnings beat estimates for Exxon Mobil Corporation (NYSE:XOM) (Spring, Texas), but investors sold the stock anyway when the company released results January 31. Chevron Corporation (NYSE:CVX) (Houston, Texas) increased quarterly earnings compared to year-earlier results, but investors also sold on the announcement. A near-doubling of fourth-quarter earnings at Shell plc (NYSE:SHEL) (London, England) led to an increase in stock price the day the company announced results. Investors effectively shrugged when BP plc (NYSE:BP) (London, England) reported heavy losses February 11.
That disparate stock performance might seem unusual given the "energy dominance" and "drill, baby, drill" mantras of the new Trump administration. While oil company executives welcomed the new president's attack on environmental regulation and electric vehicles (EVs), they were in no hurry to return to the early go-go years of the fracking boom, when spending like drunken sailors was the norm. Investors punished companies harshly for that in recent years. For the last few years, oil chiefs seemed content to return excess cash to investors in the form of stock buybacks and dividend increases.
These days, the main oil story revolves around returning capital to owners, cutting costs, selling peripheral assets, hunting for big new discoveries and waiting for global demand to catch up with global supply, which should lift prices. The change in administrations in Washington, D.C., appears to have dissolved any fears that the rise of EVs would lead to a long-term marginalization of the oil and gas business.
Several of the integrated supermajors issued earnings warnings during the fourth quarter, trying to manage investor expectations. Quarterly average prices for Brent and West Texas Intermediate (WTI) crude oil fell between $7 and $9 per barrel compared to year-earlier prices, though there was a far smaller gap, $1 and $2 per barrel, on average, between full-year 2023 and 2024 prices.
Click on the images at right to see charts for the prices of West Texas Intermediate and Brent crude oil since January 2023.
Results are summarized below.
ExxonMobil
When it reported results January 31, ExxonMobil said it earned $7.61 billion for the just-completed quarter, down slightly from profits of $7.6 billion in the comparable year-earlier quarter. Full-year earnings fell to $33.7 billion in 2024 compared to $36 billion in 2023.
Click on the images at right to see fourth-quarter and full-year results for the four integrated supermajor oil companies.
ExxonMobil said its quarterly profits were dragged down by refining margins and the price of natural gas that declined from last year's historically high levels. But that was partly offset by what it called "strong advantaged volume growth including record production from Guyana and Permian and record high-value product sales volumes."
Full-year earnings from exploration & production (upstream) rose $4.1 billion over the 2023 results, to $25.4 billion. But "significantly weaker" refining margins pulled down profits for refining and marketing (downstream), chemicals and specialty chemicals to $9.7 billion in 2024, down from $16.5 billion in 2023. Within that segment, full-year refining & marketing profits fell furthest, to $4 billion in 2024 from $12.1 billion in 2023.
The company touted its ongoing strategic cost reduction campaign: cost reductions totaled $800 million for the quarter and $2.4 billion for 2024. Since launching this effort in 2019, ExxonMobil has made $12.1 billion of cumulative cost cuts, which it said was "well beyond what any competitors have achieved." Between 2019 and 2030, ExxonMobil has set a goal of taking $18 billion in structural costs out of its business.
The company sold $5 billion of peripheral assets during the quarter. And it extended its plan to repurchase $20 billion of shares per year through 2026.
Chevron
Fourth-quarter profits rose for Chevron, but full-year earnings fell, the company said January 31. The company set a new full-year record for production in 2024: Worldwide net oil-equivalent rose 7% over 2023 levels while U.S. net oil-equivalent production grew 19% year over year.
The company said it started several key growth projects during 2024, including in Kazakhstan and the high-pressure Anchor project in the Gulf of Mexico (now designated in the U.S. as the Gulf of America). Chevron also repurchased over $15 billion of its shares in 2024.
Fourth-quarter earnings rose 43%, to $3.3 billion from $2.3 billion in the year-earlier period, but full-year results dropped 17%, or about $3.7 billion, to $17.7 billion from $21.4 billion.
The company's downstream segment swung to a loss of $248 million in the just-completed period from a profit of $1.1 billion in the fourth quarter of 2023. For the full year, Chevron's downstream business earned $1.7 billion in 2024 compared to $6.1 billion in 2023, a 72% decline. For 2024, Chevron said weaker refining margins were partly offset by higher net oil-equivalent production.
The company recently closed asset sales in Canada, the Republic of Congo and Alaska, progressed the acquisition of Hess Corporation and announced a target of $2-3 billion of structural cost reductions by the end of 2026.
The company also increased its common-stock dividend 5%.
Shell
The London-based supermajor nearly doubled its fourth-quarter earnings, to $928 million from $474 million in the October-December 2023 period, but full-year results sagged to $16.1 billion from $19.4 billion in 2023.
Shell also increased its dividend 4% and launched another $3.5 billion to its stock buyback program, which runs through April. This is the 13th consecutive quarter of at least $3 billion of share repurchases.
The supermajor has lowered structural costs by $3.1 billion achieved since 2022, exceeding a commitment made in 2023.
BP
In announcing earnings February 11, BP said its underlying replacement cost profit/loss, its proxy for net earnings/losses, fell 60% in the just-concluded quarter, to $1.169 billion from just shy of $3 billion in the comparable year-earlier quarter. Full-year results also fell sharply, to $8.9 billion from $13.8 billion for 2023.
Earnings for BP have long trailed its other supermajor peers. How company leaders plan to change that will be discussed on BP's investor day February 26.
In its earnings statement February 11, the company said it was "driving focus and efficiency" by "high-grading (its) portfolio and divesting non-core assets." It added it achieved $0.8 billion in structural cost reductions in 2024. In terms of growing its portfolio, BP said final investment decisions (FIDs) were taken on 10 major projects, including projects in Indonesia, India and the Caspian Sea.
Over the last three years, BP's stock has fallen about 5% compared to three-year gains of between 3% and 9% for its peers ExxonMobil, Shell and Chevron. At least one activist investor is said to have amassed an undetermined stake in BP, presumably with the idea of electing one or more members to the board of directors, where they can press for strategic changes.
In announcing earnings, BP said it would more fully detail its new strategy later this month. The company gave few details, but analysts expect a continued reduction of investment in renewable energy and a greater investment in the core oil and gas business.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
That disparate stock performance might seem unusual given the "energy dominance" and "drill, baby, drill" mantras of the new Trump administration. While oil company executives welcomed the new president's attack on environmental regulation and electric vehicles (EVs), they were in no hurry to return to the early go-go years of the fracking boom, when spending like drunken sailors was the norm. Investors punished companies harshly for that in recent years. For the last few years, oil chiefs seemed content to return excess cash to investors in the form of stock buybacks and dividend increases.
These days, the main oil story revolves around returning capital to owners, cutting costs, selling peripheral assets, hunting for big new discoveries and waiting for global demand to catch up with global supply, which should lift prices. The change in administrations in Washington, D.C., appears to have dissolved any fears that the rise of EVs would lead to a long-term marginalization of the oil and gas business.
Several of the integrated supermajors issued earnings warnings during the fourth quarter, trying to manage investor expectations. Quarterly average prices for Brent and West Texas Intermediate (WTI) crude oil fell between $7 and $9 per barrel compared to year-earlier prices, though there was a far smaller gap, $1 and $2 per barrel, on average, between full-year 2023 and 2024 prices.
Results are summarized below.
ExxonMobil
When it reported results January 31, ExxonMobil said it earned $7.61 billion for the just-completed quarter, down slightly from profits of $7.6 billion in the comparable year-earlier quarter. Full-year earnings fell to $33.7 billion in 2024 compared to $36 billion in 2023.
ExxonMobil said its quarterly profits were dragged down by refining margins and the price of natural gas that declined from last year's historically high levels. But that was partly offset by what it called "strong advantaged volume growth including record production from Guyana and Permian and record high-value product sales volumes."
Full-year earnings from exploration & production (upstream) rose $4.1 billion over the 2023 results, to $25.4 billion. But "significantly weaker" refining margins pulled down profits for refining and marketing (downstream), chemicals and specialty chemicals to $9.7 billion in 2024, down from $16.5 billion in 2023. Within that segment, full-year refining & marketing profits fell furthest, to $4 billion in 2024 from $12.1 billion in 2023.
The company touted its ongoing strategic cost reduction campaign: cost reductions totaled $800 million for the quarter and $2.4 billion for 2024. Since launching this effort in 2019, ExxonMobil has made $12.1 billion of cumulative cost cuts, which it said was "well beyond what any competitors have achieved." Between 2019 and 2030, ExxonMobil has set a goal of taking $18 billion in structural costs out of its business.
The company sold $5 billion of peripheral assets during the quarter. And it extended its plan to repurchase $20 billion of shares per year through 2026.
Chevron
Fourth-quarter profits rose for Chevron, but full-year earnings fell, the company said January 31. The company set a new full-year record for production in 2024: Worldwide net oil-equivalent rose 7% over 2023 levels while U.S. net oil-equivalent production grew 19% year over year.
The company said it started several key growth projects during 2024, including in Kazakhstan and the high-pressure Anchor project in the Gulf of Mexico (now designated in the U.S. as the Gulf of America). Chevron also repurchased over $15 billion of its shares in 2024.
Fourth-quarter earnings rose 43%, to $3.3 billion from $2.3 billion in the year-earlier period, but full-year results dropped 17%, or about $3.7 billion, to $17.7 billion from $21.4 billion.
The company's downstream segment swung to a loss of $248 million in the just-completed period from a profit of $1.1 billion in the fourth quarter of 2023. For the full year, Chevron's downstream business earned $1.7 billion in 2024 compared to $6.1 billion in 2023, a 72% decline. For 2024, Chevron said weaker refining margins were partly offset by higher net oil-equivalent production.
The company recently closed asset sales in Canada, the Republic of Congo and Alaska, progressed the acquisition of Hess Corporation and announced a target of $2-3 billion of structural cost reductions by the end of 2026.
The company also increased its common-stock dividend 5%.
Shell
The London-based supermajor nearly doubled its fourth-quarter earnings, to $928 million from $474 million in the October-December 2023 period, but full-year results sagged to $16.1 billion from $19.4 billion in 2023.
Shell also increased its dividend 4% and launched another $3.5 billion to its stock buyback program, which runs through April. This is the 13th consecutive quarter of at least $3 billion of share repurchases.
The supermajor has lowered structural costs by $3.1 billion achieved since 2022, exceeding a commitment made in 2023.
BP
In announcing earnings February 11, BP said its underlying replacement cost profit/loss, its proxy for net earnings/losses, fell 60% in the just-concluded quarter, to $1.169 billion from just shy of $3 billion in the comparable year-earlier quarter. Full-year results also fell sharply, to $8.9 billion from $13.8 billion for 2023.
Earnings for BP have long trailed its other supermajor peers. How company leaders plan to change that will be discussed on BP's investor day February 26.
In its earnings statement February 11, the company said it was "driving focus and efficiency" by "high-grading (its) portfolio and divesting non-core assets." It added it achieved $0.8 billion in structural cost reductions in 2024. In terms of growing its portfolio, BP said final investment decisions (FIDs) were taken on 10 major projects, including projects in Indonesia, India and the Caspian Sea.
Over the last three years, BP's stock has fallen about 5% compared to three-year gains of between 3% and 9% for its peers ExxonMobil, Shell and Chevron. At least one activist investor is said to have amassed an undetermined stake in BP, presumably with the idea of electing one or more members to the board of directors, where they can press for strategic changes.
In announcing earnings, BP said it would more fully detail its new strategy later this month. The company gave few details, but analysts expect a continued reduction of investment in renewable energy and a greater investment in the core oil and gas business.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
