ExxonMobil And Chevron Project Industry Strength Despite Low Prices

Darren Woods, chairman and chief executive officer Exxon Mobil Corp., speaks during a panel discussion at the inaugural Pennsylvania Energy and Innovation Summit at Carnegie Mellon University in Pittsburgh, Pennsylvania, US, on Tuesday, July 15, 2025. US President Donald Trump hailed more than $92 billion in investments in artificial intelligence and energy infrastructure during a visit to Pennsylvania, highlighting his efforts to bolster US competitiveness in the AI field. Photographer: Brian Kaiser/Bloomberg

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When ExxonMobil and Chevron, America’s largest domestic oil and gas companies, rolled out their second quarter 2025 earnings reports last week, which combined portray a thriving U.S. energy sector even amid a challenging commodity price picture. Chevron CEO Mike Wirth may have said it best during an August 1 appearance on CNBC when he told host Jim Cramer, “we’re positioned to thrive in all price environments.”

ExxonMobil CEO Darren Woods was similarly upbeat about his company’s ability to create robust returns for investors amid even more challenging commodity prices than the current situation. “If you look at where prices are at today, they’re higher than the basis that we had in our plans as we developed our go-forward investments,” he told CNBC host Rebecca Quick. “So, we’re prepared for a lower environment.”

Both executives commented on recent moves by the OPEC+ cartel to gradually add more volumes of crude oil onto the global market as part of its process of unwinding of voluntary cuts implemented following the COVID-19 pandemic. Woods pointed out that, despite ongoing strong demand for crude and refined products, the additional volumes could lead to an even more challenging pricing environment during the late months of 2025.

While the bottom-line earnings for both majors came in lower than the record earnings reported over the past few years, Wirth and Woods had a wealth of positive news to highlight and numerous reasons for optimism about their respective futures.

Chevron Sees a Bright Future Ahead

One of the main highlights for Chevron involves the company’s recent win in the arbitration case with ExxonMobil related to its $53 billion acquisition of Houston-based independent producer Hess Corp. That deal comes with a 30% stake in the massive oil resource play offshore Guyana, for which Exxon, with a 45% share, serves operator.

“The completion of the Hess acquisition further strengthens our diversified portfolio and positions us to extend our production and free cash flow growth profile well into the next decade,” Wirth said in the company’s earning’s release.

Chevron was also able to point to big increases in equity production at its Tengizchevroil (TCO) operations in Kazakhstan, where it also partners with ExxonMobil, along with Lukoil and KasManayGas. Production there rose by 34% year-over-year.

In the U.S., Wirth touted a 22% rise in the company’s Gulf of Mexico operations, as well as 14% production growth in the prolific Permian Basin, where Chevron hit the 1 million barrel per day target during the second quarter. In his CNBC interview, Wirth added that the ability to go forward with the Hess integration means the company’s overall U.S. production is up by 60% year-over-year.

Related to its Permian operations, Wirth told Cramer that Chevron now plans to maintain what he called a “plateau” at the million barrel per day (bpd) mark through 2040. “We can hold a plateau at that level for the rest of this decade, the rest of the following decade, and at a much lower level of capital spend, we can generate steady, reliable, free cash flow for years and years and years to come,” he said. Wirth added that this go-forward approach serves to strengthen the company’s balance sheet, underpins shareholder dividends, and “we’ll also use some of that cash to invest in production growth around the world.”

Wirth’s remarks there speak to three positive factors. The first and most obvious is the incredible abundance of available oil and natural gas beneath the ground in the Permian basin, which has stood as the most prolific energy play in North America for going on 15 years now. The second is the ongoing bias towards innovation in the U.S. oil and gas industry, which continuously finds new means of wringing higher volumes out of every wellbore. The third factor speaks to Chevron’s own operational efficiency, helped along by the economies of scale it enjoys in the Permian thanks to its large acreage position in the region.

No wonder Wirth is sounding so positive even with a lower price outlook.

ExxonMobil’s Similarly Optimistic Outlook

Woods projects a similarly optimistic outlook for his company, despite his disappointment in the outcome of the Guyana arbitration with Chevron. “We were very surprised” about the ruling in the case, he told Cramer. “If you read the finding, they state we had a reasonable, commercially valid position. But at the end of the day, they sided with a more narrow interpretation of the text. It is what it is, we’re moving on from that.”

Woods has plenty of other positive things to move onto, including the fact that ExxonMobil’s earnings exceeded analyst estimates despite the lower pricing environment. Operational cash flow of $24.5 billion, along with $14.2 billion in free cash flow of $14.2 billion during the first half of the year continued to enable the company’s aggressive goals for shareholder returns. The result was year-to-date shareholder distributions of $18.4 billion, made up of $8.6 billion of dividends and $9.8 billion of share repurchases, all of which rank as the largest for any IOC.

The company’s Guyana operations continue to expand beyond all stated goals, with production now exceeding 650,000 barrels per day, and providing a transformative injection of new funding for the country of 800,000 citizens. Exxon’s latest production goals for Guyana are to reach 1.3 million bpd capacity by 2027 and 1.7 million bpd by 2030. That production level would rank the tiny nation among the 15 largest oil producers in the world.

In the Permian, where ExxonMobil is the largest producer and leaseholder, the company’s latest plans are to double overall production to 2.3 million bpd by 2030, which the company estimates would result in a somewhat astonishing $25 billion in operating cash flow potential by that time.

“The second quarter, once again, proved the value of our strategy and competitive advantages, which continue to deliver for our shareholders no matter the market conditions or geopolitical developments,” Woods summed things up in the company’s release.

Bright Outlook Defies Expert Predictions

In their respective interviews, both Woods and Wirth were careful to point out that their partnering with each other in Guyana is nothing unique or even unusual. Since the industry’s inception in the mid-19th century, even the fiercest of competitors have had to learn how to partner not just in the U.S. but all over the world in order to prosper. For sure, Chevron won and ExxonMobil lost in the arbitration involving Guyana, but it would be wrong to doubt both companies will find ways to prosper in their new partnership.

Having written at various points about both companies’ plans for the Permian Basin since the shale revolution in West Texas began in earnest in 2010, it is impressive to observe how their operations have evolved pretty much as each laid them out in that play a decade or more ago. While their Q2 earnings were somewhat reduced from a year ago due to lower prices, both are indicative of nimble and innovative companies which continue to thrive.

The ongoing strength of ExxonMobil and Chevron reflects the strength of the U.S. industry at large. It is only proper to point out that it has all been achieved in the face of consistent predictions from “experts” for decades now that these companies are part of a dying industry which would be well into its decline by now.