Exxon posts strong quarterly earnings with production in Guyana and the Permian Basin picking up

Exxon Mobil reported strong Q3 earnings, with adjusted EPS of $1.88 surpassing analyst expectations of $1.81, despite revenue of $85.29 billion missing estimates. This robust performance was primarily driven by significant production increases, reaching 4.7 million oil-equivalent barrels per day—a 1.1 million bpd rise from Q2—notably from Guyana exceeding 700,000 bpd and a record 1.7 million bpd in the Permian Basin. Concurrently, Chevron also exceeded Q3 adjusted EPS forecasts with $1.85, though its revenue similarly fell short of projections, indicating a mixed but operationally strong quarter for major oil producers.

Analysis

Exxon Mobil (XOM) reported a strong Q3 performance, with adjusted earnings per share of $1.88, surpassing Wall Street's expectation of $1.81. This beat occurred despite revenue totaling $85.29 billion, which fell short of the $86.77 billion analyst projection. The company's net production significantly increased by 1.1 million oil-equivalent barrels per day from Q2, reaching 4.7 million bpd, driven by record output in the Permian Basin (1.7 million bpd) and Guyana (over 700,000 bpd).

Chevron (CVX) also exceeded Q3 adjusted EPS estimates, reporting $1.85 against a $1.66 forecast, though its revenue of $49.73 billion missed projections. Both energy majors demonstrated operational strength in production, indicating robust underlying asset performance. The broader energy market saw oil prices spike recently due to new U.S. sanctions on Russia, contrasting with earlier stabilization at lower levels attributed to OPEC+ production adjustments.

OPEC+ recently agreed to a modest production increase of 137,000 barrels per day for November, citing a steady global economic outlook, following a series of slight output boosts throughout the year. This supply-side management, coupled with geopolitical tensions impacting Russian oil, creates a dynamic pricing environment. While production growth for XOM and CVX is strong, the revenue misses suggest pricing or demand headwinds may still be present despite recent price spikes.

Key Decisions for Investors

• Investors should continue to monitor Exxon Mobil's and Chevron's production growth, particularly in key regions like the Permian Basin and Guyana, as this is a primary driver of their operational strength and EPS beats.
• Given both companies missed revenue estimates despite strong production, investors should analyze the impact of fluctuating oil prices and broader demand trends on top-line performance, rather than solely focusing on EPS.
• Assess the ongoing influence of geopolitical events, such as sanctions on Russia, and OPEC+ production decisions on global oil supply and pricing, as these factors will significantly shape future profitability for energy majors.