Exxon Mobil reports record production despite oil price pressures

In December 2024, Exxon Mobil, the largest oil producer in the United States, reported strong financial results for its fourth quarter, beating Wall Street's profit estimates. The company attributed its success to increased oil and gas production primarily from the Permian Basin and Guyana, despite lower oil prices and weaker refining margins impacting earnings. For the quarter ended on December 31, 2024, Exxon reported a profit of $7.39 billion, or $1.67 per share, which surpassed analysts’ expectations of $1.56 per share. The total earnings for 2024 were recorded at $33.46 billion, down from $38.57 billion in 2023, indicating a decrease due to various market conditions. Notably, Exxon's production costs in the Permian basin, combined with favorable conditions in Guyana, led to a more than 20,000 daily increase in oil-equivalent production, helping to mitigate some revenue losses from the refining sector. The global oil market faced challenges, including oversupply and weaker-than-expected demand due to the startup of new refineries particularly in Asia and Africa. As a result, Exxon's refining business encountered significant pressure, prompting a response from Chief Financial Officer Kathryn Mikells, who stated that they are monitoring these conditions closely as they look ahead to 2025. The company has signaled that it could face a profit reduction of up to $700 million in the upcoming quarter as margin effects continue to unfold. Additionally, Exxon has been strategically managing its operations, resulting in significant impairments, including losses incurred from selling non-core assets. Throughout 2024, Exxon Mobil also celebrated a notable milestone, becoming the largest producer in the Permian Basin after its acquisition of Pioneer Natural Resources in May. This expansion has allowed the company to benefit from relatively low production costs and strong cash flow, enabling them to deliver shareholder returns through buybacks and dividends totaling $36 billion, up from $32 billion the previous year. This financial strategy is part of Exxon's approach to maintain investor confidence in a turbulent market. Looking forward, Exxon anticipates that more than 60% of its production will derive from assets in the Permian, Guyana, and liquid natural gas by 2030. This projection reflects the company's ongoing focus on its high-potential areas, aiming to boost profitability and respond to evolving market dynamics. As oil prices continue to fluctuate, the relationship between production levels, refining margins, and shareholder returns will remain critical to Exxon's performance in the competitive oil market.