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Exxon exceeds profit expectations with higher production despite low oil prices

Exxon Mobil's second-quarter profit beat Wall Street estimates on Friday, as increased oil and gas production enabled the U.S. top oil producer to overcome lower crude oil prices.

According to data compiled and analyzed by LSEG, adjusted earnings for the second quarter totaled $7.1 billion or $1.64 a share. This was higher than analyst consensus estimates of $1.56 a share.

The oil producer reported that the production of oil and gas was at its highest level for any second-quarter since Exxon Mobil was formed in 1995 by the merger.

Energy sector is struggling with volatility in prices as OPEC+ producers increased production, driving Brent crude global benchmark down by 11% for the first quarter. The global tariffs imposed by U.S. president Donald Trump have caused concerns over a weakened global economy and oil consumption.

Exxon CEO Darren Woods stated that the second quarter "once again proved the value and competitive advantage of our strategy, which continues to deliver for our investors regardless of market conditions or geopolitical development."

Exxon distributed $4.3 billion as dividends, and purchased $5 billion of shares in the last quarter. This buyback puts Exxon on track to reach its annual share purchase goal of $20 billion.

Exxon's main production areas are the Permian Basin, the largest U.S. Oilfield, and the Stabroek block off the coast of Guyana. Exxon previously stated that the cost of production in these fields is low, which allows them to remain profitable, even when oil prices are lower.

Exxon, one of their partners in Guyana lost a court case against Hess last month. This cleared the way for Chevron, a rival company, to complete its purchase of Hess. Exxon claimed it had the contractual right to buy Hess's 30% stake in Stabroek Block.

Woods stated in a press conference that Exxon had sought legal opinions from third parties neutral to the matter of the joint operating agreements that govern the partnership between Exxon Hess, and China's CNOOC, in Guyana.

Woods stated that "in every case - and I mean literally every case - we were told our rights were very clear."

Woods stated that although the arbitrators agreed that Exxon's argument was commercially reasonable, they said that it relied on an argument based solely on text. The company will take action to strengthen contracts in future if necessary. Sheila Dang, Houston; Marguerita Choy, Ni Williams and Sheila Dang.

(source: Reuters)