Exxon Pumped Out a 25-Year Oil Record… and Still Got Jacked for $2B by One Silent Killer

Everyone on Twitter and Instagram loves dunking on Elon and Bezos for owning half the planet… but if you want to blame someone for writing the original “How to Rule the World” playbook, look no further than John D. Rockefeller. Back in 1870, Rockefeller pretty much invented the idea of "too big to fail." His company, Standard Oil, was so dominant that by the early 1900s it controlled over 90% of U.S. oil refining. (Monopoly would be an understatement.) But in 1911, the Supreme Court finally said, “Okay Johnny boy, enough is enough,” and snapped Standard Oil into 34 separate baby oil companies (not the Johnson & Johnson kind).

And two of those “babies” were Exxon and Chevron, and ever since then, they’ve been locked in an oily blood feud. Think Hatfields vs. McCoys, but instead of shooting over livestock, billions in drilling rights, Guyanese oilfields, and quarterly earnings call one-liners. Exxon made its mark in Texas. Chevron camped out in California. And over the past century, they’ve been trading blows like prime Ali/Frazier in the garden… except their rings are in the Permian Basin, the South China Sea, and (obviously) Wall Street. Which brings us to this quarter's scorecard. And this time a simple headline doesn’t do it justice.

For instance, Exxon just posted its highest second-quarter oil production since the Exxon-Mobil mega-merger 25 years ago… an insane 4.6 million barrels of oil-equivalent per day, with Permian Basin production alone hitting a record 1.6 million. That’s a lot of crude. But despite the pump-fest, profits fell 23% year over year. Q2 net income landed at $7.1 billion ($1.64 per share)... still better than the Street’s $1.54 guess, but a far cry from the $9.2 billion haul this time last year.

(Source: ABC News)

So what happened? Exxon makes money based on the price it can sell oil for. And in Q2, that price kind of sucked (for lack of better words). U.S. benchmark crude stayed under $70 a barrel for most of the quarter and even dipped below $60 in May. High oil prices = fat profits. Low oil prices = you’re working harder, but getting paid like it’s 2003. Think of it like an ice cream shop: Exxon was cranking out more scoops than ever, but if people are only willing to pay $1 a scoop, and ingredients cost 75 cents… the math ain’t mathin. So yeah… great production, but weak pricing turned Exxon’s record output into more of a “this is it?” payout.

Revenue also slid to $81.5 billion, down from $93.1 billion, and below analyst expectations. Still, Exxon’s refining business actually popped 44%, and they’ve now cut $13.5 billion in annual costs since 2019. On top of that, CEO Darren Woods is in full lean-and-mean mode, promising another $4.5 billion in cuts by 2030. Also worth noting: Exxon shelled out $9.2 billion to shareholders this quarter, split between dividends (the regular checks) and share buybacks (the stock-boosting magic trick CEOs love). Gotta keep the investors smiling… even if oil prices aren’t.

And CEO Darren Woods has made it clear he’s not done deal-hunting. Still having wet dreams about last year’s $60 billion takeover of Pioneer Natural, he hinted that more acquisitions could be coming. His exact words: “1 + 1 = more than 3.” (Translation: “We think merging with other companies will create way more value than just stacking numbers.” Translation of the translation: “Trust me, we’ve got this.”) Point is: Exxon’s in expansion mode, and if you’re a smaller oil company with decent assets, don’t be surprised if Big Darren comes knocking. As for Chevron. they did beat Wall Street’s profit expectations… barely. Earnings clocked in at $2.49 billion ($1.45 per share, or $1.77 adjusted), also the lowest Q2 profit in four years. Revenue hit $44.8 billion, missing the mark.

But don’t sleep on Chevron… because it’s back in the game after finally winning its 20-month arbitration war with Exxon over the $53 billion Hess acquisition. That deal gives Chevron a 30% stake in Guyana’s Stabroek oilfield, one of the most coveted assets on the planet. We’re talking up to $1 trillion in reserves with a break-even cost under $30/barrel. That’s like finding a gas station in 2024 charging $1.49… unheard of.

In addition to landing the oil motherlode… Chevron is also rebuilding its upstream operations, expanding in Equatorial Guinea, Brazil, Namibia, and just got its Venezuela license restored. CEO Mike Wirth is clearly looking to close the $160 billion market cap gap with Exxon before he retires. Some say he’s eyeing one last mega-acquisition (Occidental? BP?), but he’s keeping it close to the vest.

So where does that leave us? Exxon is bigger, richer, and more cost-efficient. But Chevron just secured one of the most valuable oil fields on Earth and has more global optionality… especially with Venezuela back on the table. Both companies beat expectations, both are still paying fat dividends, and both are watching OPEC+ crank production like a high schooler trying to blow out the speakers in his car.

At the time of publishing this article, Stocks.News holds positions in Meta, Johnson & Johnson, and Exxon as mentioned in the article.