Chevron and Exxon Mobil reported second-quarter earnings and revenue before the stock market open Friday, with quarterly profit declines of more than 20% for both U.S. supermajors. The two companies' have moved toward more collaborative strategies through the second half of this decade.
Chevron Q2 EPS declined 30.6% to $1.77 and sales fell 12% to $44.82 billion. Meanwhile, Exxon Mobil earnings dropped 23% to $1.64 per share while revenue totaled $81.51 billion, down 12.4% vs. a year ago. Before the reports early Friday, analyst consensus expected Exxon's quarterly profit of $1.56 per share on $80.51 billion in revenue, according to FactSet. For Chevron, analysts projected Q2 EPS coming in at $1.73 on $43.79 billion in sales.
While Chevron and Exxon Mobil continued their trend of quarterly year-over-year earnings declines, the two rivals are also pledged to work closely with each other in major global oil exploration and development projects. That alignment has led to some chatter of an industry-bending Exxon-Chevron merger.
"With the Hess acquisition now complete following the lengthy arbitration process, we see an improving upstream production growth profile from the crown jewel 30% stake in Guyana's Stabroek block, which has three additional development phases planned through 2028," CFRA analyst Stewart Glickman wrote Friday.
Glickman added Exxon's "balance sheet remains a fortress with net debt to capital at just 8%, providing tremendous financial flexibility for future opportunities, in our view."
Chevron And Exxon Mobil Earnings Takeaways
Chevron CEO Mike Wirth said in Friday's earnings release that "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."
The addition of Hess's high-quality assets, including those in Guyana, the U.S. Bakken, and the Gulf of America, creates one of the most advantaged and differentiated portfolios in the industry, Chevron said Friday.
Chevron produced 3.39 million barrels per day in the second quarter, up about 3% vs. 3.29 million barrels a year ago.
The company also returned $5.5 billion of cash to shareholders during the quarter, including share repurchases of $2.6 billion and dividends of $2.9 billion. That's down from Q1 when Chevron returned $6.9 billion in cash to shareholders.
The supermajor noted that earnings decreased compared to last year primarily due to lower crude oil prices, lower income from upstream and downstream equity affiliates and an unfavorable fair value adjustment for Hess shares.
For Exxon Mobil, the company's production totaled 4.63 million barrels of oil equivalent per day during the quarter, up from 4.36 million daily oil equivalent barrels during the same period last year. This marked the highest second-quarter output since the Exxon and Mobil merger more than 25 years ago, and an increase of 79,000 oil-equivalent barrels per day compared to the first quarter, according to Exxon.
XOM's cash capital expenditures were $6.3 billion in the second quarter, bringing year-to-date spending to $12.3 billion. This includes $12.2 billion of additions to property, plant and equipment during the first half of 2025. Exxon Mobil expects full-year cash capital expenditures of $27 billion to $29 billion, consistent with previous guidance.
The U.S. supermajor also returned $9.2 billion to shareholders, including $4.3 billion of dividends and $5 billion of share repurchases. Exxon said it is on pace to repurchase $20 billion in shares this year.
"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," Exxon CEO Darren Woods said in the earnings release.
Chevron Vs. Exxon: Rivals Now Allies
The backdrop for Friday's earnings reports is a $34 billion memorandum of understanding the two companies signed with Indonesia in early July, pledging to increase U.S. cooperation with the country on energy and infrastructure.
Exxon, which has a long history of involvement in Indonesia dating back more than 120 years, will boost oil production in the Cepu block, adding 30,000 barrels per day, bringing total output to 180,000 barrels per day. The Exxon Mobil project makes up about a quarter of Indonesia's national oil production.
Meanwhile, Chevron, is expected to play a major role in facilitating technology exchange and future exploration activities.
Fresh off this agreement in Indonesia, in a decision revolving around Guyana, an International Chamber of Commerce in Paris (ICC) arbitration panel ruled on July 18 in favor of Chevron, and Hess. The ruling provided Chevron a portion of ownership in Exxon Mobil's Stabroek block development, the crown-jewel of Guyana's oil-rich offshore zone.
The decision dismissed Exxon Mobil's claim it has right of first refusal ahead of Chevron's takeover due to Hess's 30% stake in the offshore Guyana project, which Exxon operates.
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Following the ruling, Exxon Mobil released a statement saying it disagreed with the ICC decision but that it respected "the arbitration and dispute resolution process."
"We welcome Chevron to the venture and look forward to continued industry-leading performance and value creation in Guyana for all parties involved," Exxon Mobil said.
Chevron then finalized its $53 billion deal for Hess, increasing its estimated five-year production and free cash flow growth rates and forecasting that the combined company's capital expenditures budget is will be between $19 billion and $22 billion.
In the intervening two weeks, Reuters reported that Chevron cut 575 positions in Houston following the merger completion, with the reductions set to take effect on Sept. 26.
Following Chevron's arbitration court win, Glickman said that "CVX and XOM must now put this legal dispute behind them as partners in Guyana, with the focus turning to advancing planned development stages."
"On a pro forma basis, CVX significantly closes the production gap against XOM and materially increases crude oil exposure, in our view," Glickman added at the time.
The Guyana Possibility
The energy industry touts offshore Guyana, a resource pioneered by Exxon, as the largest oil discovery in the last 10 years.
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Exxon Mobil holds a 45% stake in Guyana's Stabroek block, the largest area under development. China's CNOOC International holds a 25% interest in the project with Chevron taking over Hess's 30% stake. The Exxon-led venture has been drilling 18,000-foot-deep wells, with drillships working in water as deep as 8,900 feet.
Exxon Mobil's affiliate Esso Exploration & Production Guyana Limited is the consortium operator. The area off Guyana's coast reports estimated recoverable resources of more than 11 billion barrels of oil equivalent.
Guyana is expected to produce more than 1 million barrels per day (bpd) by 2026, according to industry projections.
Chevron, Exxon Mobil Stock Performance
CVX stock edged down 0.2% to 151.28 at the close of Friday's stock market. Meanwhile, Exxon Mobil declined 1.8% to 109.59 in market trade Friday.
Collectively, the 22 stocks in the IBD-tracked Oil & Gas-Integrated industry group have advanced 1.2% in the 2025 stock market.
U.S. oil prices backed off more than 1% Friday, trading just below $69 per barrel. Meanwhile, U.S. natural gas prices moved slightly higher to around $3.10 per million British thermal units. West Texas Intermediate oil prices are down around 4.3% this year and trading below a June high of around $74. U.S. natural gas prices are now also down a fraction in 2025, after a 10% decline on the month, according to FactSet.
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Goldman Sachs analyst Dean Struyven on July 14 wrote that U.S. oil prices in the second half of 2025 are expected to be around $63 per barrel, up from his previous prediction of $57 per barrel. Meanwhile, Struyven sees oil prices trading around $52 per barrel in 2026 as OPEC+ continues to unwind its Covid-era oil production cuts.
Morgan Stanley analyst Devin McDermott on July 15 also noted that the "fundamental setup" for crude oil in the second half of 2025 "still screens soft" but that there is upside for natural gas Henry Hub prices.
"While gas producers have lagged oil peers in recent weeks, we expect them to return to outperformance in the months ahead," McDermott wrote.
Investors can keep tabs on the IBD Leaderboard watchlist, the IBD 50 list of top growth stocks and IBD SwingTrader along with the IBD Sector Leaders list.
Chevron stock has a 58 Composite Rating out of a best-possible 99. The stock also has a 54 Relative Strength Rating and a 50 EPS Rating.
Please follow Kit Norton on X @KitNorton for more coverage.
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