By Sheila Dang and Shadia Nasralla
HOUSTON/LONDON (Reuters) -Big Oil’s first-quarter earnings have shown a clear split in how companies are positioned to weather the downturn sparked by a slump in oil prices to a four-year low in April.
Investors were focused on whether companies would cut share repurchases, since lower crude prices would leave them with less cash to fund the programs. Buybacks and dividends are key to investor interest in the oil industry.
U.S. oil producer Exxon Mobil and UK-based Shell kept the pace of share buybacks. Their top rivals, U.S.-based Chevron and UK-based BP said they would reduce buybacks in the second quarter.
The difference speaks to where each company is in its business cycle.
Exxon has benefited from prolific production from its Guyana oilfield, the largest offshore oil find in at least a decade.
A major player in the top U.S. oilfield, the Permian Basin, as well as in Guyana, Exxon increased production by 20% year-over-year. Both areas are highly profitable and the company is working to reduce its operating costs, said Exxon CEO Darren Woods.
“In this uncertain market, our shareholders can be confident in knowing that we’re built for this,” Woods said in the company’s first-quarter earnings statement.
Oil prices recorded their largest monthly drop since 2021 this week as investors priced in the expected damage to the global economy – and contingent fuel demand – from U.S. President Donald Trump’s trade policies.
Exxon’s net-debt-to-capital ratio was 7%. It was the only integrated oil company that did not increase net debt during the quarter, said Kim Fustier, head of European oil and gas research at HSBC.
Chevron’s first-quarter oil and gas production was flat compared to the previous year as growth in Kazakhstan and the Permian was offset by loss of production from asset sales.
Earlier this year, the company announced it would lay off up to 20% of its staff as part of an effort to simplify the business and cut up to $3 billion in costs.
Chevron is attempting to buy into the Guyana play through the acquisition of one of Exxon’s minority partners in the project, Hess. Exxon is in arbitration over that deal, and claims to have the right of first refusal for Hess’ stake in the field.
Exxon repurchased $4.8 billion of shares during the first quarter, putting it on track to meet its annual target of $20 billion.
Chevron said it would reduce buybacks to between $2 billion and $3.5 billion in the current quarter, down from $3.9 billion between January and March, which it said was a reflection of market conditions.
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