Chevron may have handed shareholders a $7.7 billion present in the form of dividend payouts this morning after an entire night of trick or treating, but CEO Mike Wirth is still sweating through his suit. Why? Wirth is duking it out with none other than Exxon Mobil in a corporate showdown worthy of WrestleMania. 

The prized possession? A $53 billion deal for Hess that could grab Chevron a piece of one of the hottest oil finds in recent memory: Guyana’s oil fields. But Exxon? They’re holding onto those assets like my neighbor's kid with his last slice of Halloween candy—zero intentions of sharing.

The numbers themselves might look solid at first glance. Chevron beat Wall Street’s earnings and revenue expectations, with $50.67 billion in revenue and $4.49 billion in net income (a respectable haul but still a 31% drop from last year’s $6.53 billion due to lower refining margins and slumping oil prices). And while Wall Street may have applauded the payout to shareholders, analysts aren’t all impressed with Chevron’s long-term growth story, especially with the Hess deal teetering on the edge.

(Source: Financial Times)

Wirth’s got history on his side, though. When it comes to big moves, he’s usually been a step ahead. Back in the pre-pandemic days (2019), he famously walked away from a bidding war over Anadarko Petroleum, watching from the sidelines as Occidental Petroleum overspent. 

He’s since grabbed other assets, like Noble Energy and PDC Energy, right when the market was ripe for picking. But his winning streak may hit a wall if Exxon’s claim on Hess’s Guyana assets holds up in arbitration, effectively shutting Chevron out of the action. If Exxon wins, Chevron’s Hess play might fold, and with it, Wirth’s ambitions to cement Chevron as a serious player in Latin America.

The clock’s ticking, too. This has been a fight that’s dragged on for nearly two years. Guyana’s oil field is one of the world’s largest recent discoveries, and it pumped out $1.88 billion in net profit for Hess last year alone. A piece of that pie would not only bolster Chevron’s portfolio but also add some geopolitical security (something you don’t exactly get from operations in Venezuela, where Chevron’s drilling rights could vanish with the next election cycle). Mark Kelly from MKP Advisors made it clear what he thinks about the stock, “If you have $1 to invest in an oil company now, how would you justify investing it in Chevron?”

As if that’s not enough, Chevron’s falling profits are already drawing some boardroom side-eye, with whispers that Wirth needs to pull off a win — and fast. While he’s busy shaking up his executive team to address profitability, his five-year track record of outperformance is starting to lose its shine as Exxon’s stock continues to race ahead. Since he took the reins, Chevron’s stock has climbed 18%, which sounds decent until you stack it against Exxon’s 31% gain (and the fact it’s barely keeping up with inflation).

Pouring gasoline on the fire (pun intended), Jim Cramer’s over here reminding everyone why fossil fuels aren’t going anywhere, much to the chagrin of the “green is the new black” crowd. Fossil fuels are still a backbone for everything from tech to transportation, so Chevron’s oil revenue is far from obsolete. 

Still, the narrative shift to renewables and the Federal Reserve’s economic slow-down tactics mean investors aren’t exactly jumping to sink money into oil stocks, even if Chevron’s bankrolling a record-breaking $7.7 billion in buybacks and dividends. Even with their earnings beat, Chevron’s still down .44% year to date.

PS: Before you jump on the Chevron bandwagon, you might want to see how we’re already scoring big at Stocks.News. Just this Wednesday, we locked in a 64% winner—in under five hours. Want to know how we did it? Check out the details on becoming a Stocks.News Premium member (don’t miss out on the next exciting trade).

Stock.News has positions in Exxon Mobil.