ExxonMobil Q2 Earnings Call Highlights

ExxonMobil NYSE: XOM reported second-quarter earnings of $14.5 billion and cash flow from operations of $23.6 billion, as the company said global supply disruptions and conflict in the Middle East tightened markets for energy, chemical and specialty products.

Chairman and Chief Executive Officer Darren Woods said ExxonMobil delivered more than $17 billion in free cash flow during the quarter, reduced net debt by more than $7 billion and returned more than $9 billion to shareholders through dividends and share repurchases.

Cash capital expenditures totaled about $7 billion.

Woods said the company’s operations were affected by the temporary loss of about 10% of its upstream production, but that production outside the Middle East reached its highest level in more than two decades.

He said ExxonMobil’s globally diversified operating footprint and supply-chain capabilities helped it respond to market disruptions.

Guyana remained a central focus of the call. Gross production from the country reached approximately 900,000 barrels per day during the quarter, according to Woods.

The company’s fifth floating production, storage and offloading vessel, Errea Wittu, departed for Guyana in June and remains on track to start operations by the end of the year, he said.

Woods said ExxonMobil is advancing Longtail toward a final investment decision and is evaluating a potential ninth FPSO development.

Faster project delivery, lower costs, production above the original investment basis and stronger commodity prices have accelerated the recovery of project investment and operating costs, he said.

Senior Vice President and Chief Financial Officer Neil Hansen said the company has recovered its $55 billion of investment in Guyana, along with operating costs.

Under the contractor agreement, the company can recover costs from up to 75% of production, with remaining production shared equally between the company and the government of Guyana.

Hansen said the milestone should result in an “inflection” in free cash flow, even as ExxonMobil’s production entitlement declines somewhat.

He said the company expects twice the level of free cash flow from Guyana in 2030 compared with 2025.

On exploration, Woods said ExxonMobil sees additional potential in the block, including four new discovery opportunities identified using artificial-intelligence tools trained on existing drilling and subsurface data.

He also said a large portion of acreage remains in force majeure pending an International Court of Justice ruling related to the Venezuela dispute.

Woods said ExxonMobil’s U.S. Gulf Coast refineries produced a record volume of diesel in the second quarter as global supply tightened.

He said roughly 3 million barrels per day of refining capacity was unavailable because of the Strait closure, while China had stopped exporting about 2 million barrels per day of capacity and Russian refinery capacity had also been disrupted.

The company expects refining markets and margins to remain robust as the industry works through constrained product availability, Woods said.

ExxonMobil’s U.S. Gulf Coast refining reliability exceeded 95% in the quarter, Hansen said.

Woods said ExxonMobil has spent the past decade optimizing its refining portfolio, divesting assets it did not believe could become cost-advantaged and investing in sites with strategic value.

Global throughput has increased 11% during the past three years, while jet fuel and diesel production has risen 15%, he said.

Hansen said completed refinery turnarounds this year have ...