Exxon and Shell Lower Production, But Still Pump Profits
As a result of higher energy prices offsetting their output, Exxon Mobil Corp (NYSE:XOM) and Royal Dutch Shell Plc (NYSE:RDSA) say their profits are up more than 40 percent in the third quarter. Oil (NYSE:USO) prices are down since May but are still above last year’s levels. Crude prices climbed 20 percent after optimism that the global economy may be recovering. However, the two companies are still with lower output and record spending.
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Raymond James analyst Pavel Molchanov said, “Production was quite a bit lower than we were modeling. It’s a recurring theme we’ve seen from peer companies.”
Both Exxon (NYSE:XOM) and Shell (NYSE:RDSA) benefitted from the drop in oil prices in the third quarter, with higher profit margins at their refineries and chemicals businesses, especially in the US. Shell (NYSE:RDSA) had a 25 percent increase and Exxon (NYSE:XOM) were up 36 percent. Exxon has productive projects upcoming. They will be putting wells in North Dakota and Hadrian prospect in the Gulf of Mexico is better than expected.
Third quarter profits for Occidental Petroleum Corp. (NYSE:OXY) were up 49 percent. Italy’s Eni’s production fell 13.6 percent but underlying, or “adjusted” net profit, rose 19 percent. Norway’s Statoil adjusted net income rose 50 percent to $2.07 billion.