Arab Press

بالشعب و للشعب
Friday, Jun 21, 2024

Exxon, Chevron split over how to manage rising cash piles

Exxon, Chevron split over how to manage rising cash piles

The two largest U.S. oil companies - Exxon Mobil Corp (XOM.N) and Chevron Corp (CVX.N) - are minting cash from booming oil and gas operations, but are splitting over what to do next.
The pair on Friday posted first-quarter results that topped Wall Street forecasts as earnings soared. Exxon's net hit $11.4 billion while Chevron earned $6.6 billion and with analysts expecting the strong results to continue this year.

Both have paid down debt incurred during the COVID-19 downturn, have nearly pristine balance sheets and are spending well below their past levels on new exploration and development projects.

The pair have low, net debt-to-capital ratios of about 4%, a fraction of the double-digit ratios of few years ago, and have cut spending on new projects to less than half their income. The result: huge cash reserves, far in excess of what they need for routine operations.

They differ over what to do next, with Wall Street pushing for higher share buybacks and dividends, worried that too much cash could signal a spurt of big-dollar acquisitions.

Exxon CEO Darren Woods says he is happy to see cash balances rise so the company is well-positioned for a cycle downturn.

"The question is obviously when, but that will come," Woods said, after saying he would "expect to see cash balances higher" in times when the markets are on the top end of the cycle.

The CEO noted strong demand for its commodities and did not oppose acquisitions if a deal can lead to higher returns for shareholders.

"It's got to be one where what Exxon Mobil brings to the table actually increases what either company would do independent of one another," he said.

Exxon was sitting on $32.6 billion at the end of the first quarter while Chevron's vault held $15.7 billion, about triple what it needs for operating activity.

But Chevron, which twice bid on rivals, landing Noble Corp for $4.1 billion during the 2020 downturn, expects to reduce some of its cash, said Finance Chief Pierre Breber.

"We don't intend to hold $15-plus billion of cash on our balance sheet," he said, describing too much cash on the books as "economically inefficient for us to hold it, and it is not our cash, it is our shareholders' cash."
Newsletter

Related Articles

Arab Press
0:00
0:00
Close
United States Bans Kaspersky Antivirus
White House Cancels US-Israel Meeting Amid Netanyahu's Accusations
Muslim Community Leader Criticizes Nigel Farage for Undermining Muslims
Hezbollah Chief Threatens All of Israel Amidst Escalating Conflict
Canada Lists Iran's Revolutionary Guards as Terrorist Group
Iran Sentences Nobel Laureate Narges Mohammadi to 1-Year Prison Term for Propaganda
Japan Considers Sanctions on UAE-Based Entities for Aiding Russia
Israel Rescues Four Hostages from Gaza
Iran Approves Six Candidates for Presidential Election After Raisi's Death
Israeli Commander Resigns After Hamas' October 7 Attack
Israeli War Cabinet Minister Benny Gantz Resigns Over Gaza Strategy
UN to Add Israel to Human Rights Blacklist
Labour Party to Pledge Recognition of Palestinian State in Election Manifesto
Hamas Rejects Biden's Gaza Ceasefire Proposal as 'Just Words'
Hamas Has Not Responded To Latest Ceasefire Proposal: Qatar
State of Palestine Seeks to Join UN Court Case Accusing Israel of Genocide
Hezbollah Launches Drone Squadron Towards Israeli Military Targets
US-Built Pier in Gaza Faces Setbacks and Repairs
Norway, Ireland, and Spain Recognize Palestinian State
ICC Seeks Arrest Warrants for Israeli and Hamas Leaders
Death of Iran's President Raisi Stirs Succession Race for Supreme Leader
What Happens If an Iranian President Dies in Office?
Iranian President Ebrahim Raisi Reportedly Killed in Helicopter Crash
FedEx Airlines Boeing 767 cargo plane lands on nose at Istanbul Airport
Netanyahu's Firm Stance Amid Rafah Hostage Talks
Blinken on Gaza: Ceasefire is Key to Humanitarian Crisis Resolution
UAE Prime Minister Announces $544M for Home Repairs after Historic Rains, Vows to Learn from Experience
Isfahan Explosions: US Media Reports Israel's Retaliatory Strikes on Iran
Four Dead, Dubai Airport Disrupted: UAE's Heaviest Rains in 75 Years Cause Flooding and Flight Chaos
Dubai Airports: Stranded Tourists 'Living on Duty Free,' Desperate for Food and Water
Heavy Rains Cause Flooding in UAE and Oman: 18 Lives Lost
You can be a very successful player, but a player with character is another level!
Unprecedented Flooding Disrupts Dubai
Ajman Crown Prince Declares Remote Work Day for Government Employees Due to Weather (Except Essential Jobs)
IDF released footage showing Israeli fighter jets downing some of the 300 drones and missiles fired from Iran at Israel.
The West stands with Israel, Iran is furious: "Double standards and irresponsibility"
Huge Queues at Iranian Gas Stations
Stabbing rampage terror attack in Sydney, at least four people killed, early reports that a baby was among those stabbed.
Scandal in Iran after a goalkeeper had the audacity to hug a female fan who stormed the pitch
Iran fired more than 300 drones and missiles at Israel overnight. Israel Reports Light Damage After Iran Launches Large Strike.
Saudi Arabia calls for "restraint" amid Iranian strikes on Israel
Iran launched dozens of drones at Israel on Saturday but they will take hours to reach their targets, Israel's military said
Online YouTube streamer N3ON was just sentenced to AN ENTIRE YEAR in prison in Dubai for filming and live-streaming, without “proper permits”
UN Chief Warns: Gaza Outflow to Egypt Would Derail Israeli-Palestinian Peace
Record Number of Arab Soldiers Serve in IDF Amidst Ongoing Gaza Conflict: A Personal Story of Loyalty and Advocacy
Major Charities Warn of Genocide in Gaza: 'Impossible' to Deliver Aid, Israel Accused of Complicity
Biden Warns Netanyahu: US Aid to Israel Depends on Gaza Civilian Protection
Israel Reopens Gaza Border for Temporary Humanitarian Aid Amid International Pressure
United Arab Emirates suspends diplomatic relations with Israel
DOZENS OF ARMED FIGHTERS ATTACK 3 IRANIAN MILITARY FACILITIES
×