Exxon Mobil reported a sharp drop in third-quarter profits on lower oil prices, even as increased investment in US shale projects boosted output (SPENCER PLATT)

New York (AFP) – US oil giants Exxon Mobil and Chevron reported a drop in their third-quarter profits Friday on lower oil prices, even as increased investment in US shale projects boosted output.

The companies have pumped heavy investment into the Permian Basin, a shale-rich region in Texas and New Mexico drawing considerable interest due to newer technologies that have made developing unconventional shale resources profitable. 

These efforts enabled Exxon and Chevron, the two biggest US oil companies, to increase overall oil and gas production in the quarter ending September 30.

But results were dented by a retreat in crude oil prices during the three-month period, as signs of a slowing global economy amplified worries about a glut of supply.

US oil prices traded in the $50-$60 a barrel range for much of the quarter, down about $15 from the prior year.

Exxon reported quarterly profits of $3.2 billion, plunging 49.2 percent from the year-ago period, as revenues fell 15.1 percent to $65 billion.

Chief Executive Darren Woods said the company’s ramp-up in the Permian was running ahead of schedule, saying “we are making excellent progress on our long-term growth strategy.”

At Chevron, net profits were $2.6 billion, which was 36.2 percent below the same period of 2018. Revenues were $36.1 billion, a 17.9 percent decline.

“Third quarter earnings and cash flow were solid, but down from our very strong results of a year ago,” said Chevron Chief Executive Michael Wirth.

“Lower crude oil and natural gas prices more than offset a three percent increase in net oil-equivalent production from last year’s third quarter.”

Exxon shares rose 0.6 percent to $68.00 in pre-market trading, while Chevron’s fell 1.0 percent to $115.00.

Disclaimer: Validity of the above story is for 7 Days from original date of publishing. Source: AFP.