Wrapup 1: Earnings for Big Oil backpaddle as natgas prices tumble
26/04/2024 17:59
By Sabrina Valle
HOUSTON, April 26 (Reuters) - U.S. and European oil
companies reported weaker first quarter results on Friday due to
a sharp drop in natural gas prices compared with a year ago.
In the U.S., Exxon Mobil XOM.N missed Wall Street earnings
targets on larger-than-forecast drop in natural gas earnings and
Chevron CVX.N beat tempered expectations with
better-than-expected U.S. oil production.
French oil major
TotalEnergies
TTEF.PA also slightly beat analysts forecasts as good
refining margins partially offset a steep drop in profits from
natural gas. CEO Patrick Pouyanne, however, warned that the
higher oil prices that have offset weak natural gas profits
could cut into refining margins later this year.
Exxon's profit fell 28%, Chevron decreased 16% and
TotalEnergies was down 22% year-on-year, with the two U.S. oil
majors also taking a toll from weaker profits from gasoline and
fuels.
Profits at oil and gas firms are still retreating from
record levels in 2022 that were boosted by a surge in demand
after the COVID-19 pandemic and then when prices spiked after
Russia invaded Ukraine.
Henry Hub futures NGc1 , the benchmark for U.S. gas, has
been trading below $1.70 per million British thermal unit
(mmBtu), and earlier this year dropped to a 3-1/2-year low on
warm weather and oversupply.
Global benchmark Brent crude prices LCOc1 were largely
flat against a year ago at $81.76 a barrel in the quarter.
Last year's strong profits led Exxon, Chevron, Occidental
Petroleum OXY.N to bid for rivals hoping to generate higher
oil and gas production.
Exxon posted an $8.5 billion profit, its second highest for
the first quarter in more than a decade, while Chevron earned
$5.5 billion and TotalEnergies delivered $5.1 billion in
adjusted net.
Share prices reflected the profit drops, with Exxon down
3.6% and Chevron off 1% in midday New York trading.
TotalEnergies was up 2.6% in Paris trading after reconfirming a
$2 billion share buyback.
Executives offered no new guidance on their production
outlooks for coming quarters on conference calls, giving
investor less reason to cheer.
In part, the two largest U.S. oil companies' outlook depends
on pending approvals for two bid deals.
Exxon aims to close its purchase of Pioneer Natural
Resources PXD.N in the current quarter, it said. Chevron said
its offer for Hess HES.N is moving ahead, and is expected to
be put for shareholder vote in late May.
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Oil majors take a hit from lower natural gas prices https://reut.rs/3WhsF7I
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(Reporting by Sabrina Valle in Houston, America Hernandez in
Paris and Mrinalika Roy in Bengaluru
Editing by Marguerita Choy)
((Sabrina.valle@thomsonreuters.com; +1 469-691-7668;))