Exxon’s oil and gas output finally stops shrinking

01 FEB 19 09:06 ET

By Matt Egan, CNN Business

(CNN) — ExxonMobil’s investments in American shale are paying off.

Exxon’s total oil and gas production increased slightly during the fourth quarter, the company said on Friday. That marks a milestone of sorts for mighty Exxon. Output had declined four straight quarters and nine of the previous 10.

Texas-based Exxon was late to the shale revolution that occurred in its own backyard. But it’s spent heavily in recent years to catch up.

Exxon said US oil production jumped 11% last quarter. That growth was driven by a 90% surge in output from the Permian Basin, the booming West Texas shale play.

Despite a plunge in oil prices last quarter, Exxon halted a recent string of profit misses. The company’s per-share earnings of $1.41 blew away the Street’s estimate.

Net income fell 28% last quarter due to the impact of tax reform and asset writedowns. Excluding those items, net income nearly doubled to $6.4 billion.

“Strong results during a period of commodity price volatility demonstrates ExxonMobil’s ability to deliver superior cash flow in different market environments,” Exxon CEO Darren Woods said in a statement.

Exxon shares climbed 2% in premarket trading. The blue-chip company’s stock fell 18% last year, trailing most of its Big Oil rivals.

Exxon is stabilizing after nearly three years of “relentless production declines,” noted Pavel Molchanov, an analyst at Raymond James. But he said Exxon needs to do much more to hit its long-term production targets.

He also noted that Exxon’s big earnings beat was boosted by $884 million of asset sales, including refinery facilities in Italy.

In a shift for Exxon, Woods will field questions from analysts during a conference call later on Friday. In the past, Woods and his predecessor Rex Tillerson sat out these conference calls.

While Exxon’s output is finally stabilizing, smaller rival Chevron continues to enjoy robust growth. Chevron on Friday revealed a 7% jump in annual production to a record 2.9 million barrels per day. Chevron is targeting 4% to 7% growth in 2019.

Chevron’s fourth-quarter earnings easily topped estimates, lifting its stock 2% in premarket trading. And unlike Exxon, Chevron continues to reward shareholders with buybacks. The company repurchased $1 billion of its stock last quarter.