ExxonMobil shares bounce back as Permian output soars

HOUSTON (Bloomberg) -- Exxon Mobil shares jumped after surpassing analysts’ forecasts by almost one-third with the biggest refining bonanza in six years and booming oil production in the Permian basin. 

Strong crude flows from North America’s most-prolific oil field softened the blow of declining output from other regions and plunging oil prices at the end of 2018. For the first time in almost two years, Exxon production topped the 4 MMbpd mark.

Expectations had been high for Exxon, given that Royal Dutch Shell and ConocoPhillips earlier this week also surpassed analysts’ forecasts, showing that the majors largely survived the 35% fourth-quarter slide in international crude prices. Exxon shares surged as much as 4% in early trading.

Refining profits more than doubled to $2.7 billion as margins on processing crude into fuels expanded. The result was also boosted by the sale of an Italian refinery. In Texas, the company this week announced plans to expand a refinery near Houston to handle growing Permian crude flows, a project Cowen & Co. analysts estimate will cost $1.1 billion.

In the Permian region of West Texas and New Mexico, output soared 90%. Even so, overall production was slightly lower than the 4.03 MMbpd analysts had expected.

Exxon CEO Darren Woods is due to make his debut on a quarterly conference call at 9:30 a.m. Eastern time. It will make him the first Exxon chief to field questions on such a call in at least 15 years and comes the day after a total reorganization of the company’s oil and natural gas exploration business.

Exxon shares were up 2.7% to $75.25 in New York.