Big oil companies like Exxon and Chevron are looking for acquisition deals that can add value for shareholders. Collin Eaton reports in The Wall Street Journal:
Exxon Mobil and Chevron collectively banked nearly $14 billion in second-quarter profits Friday, down from last year’s record-breaking levels but adding to their war chests as they eye acquisitions in the oil patch.
Exxon said it earned $7.9 billion in the second quarter, extending its run of strong quarters though its profit was down from the company’s $17.9 billion haul in the same time last year, when Russia’s invasion of Ukraine skyrocketed energy prices. Chevron said it collected $6 billion in profit, dropping from a quarterly record of $11.6 billion in the same period last year.
The profits follow multibillion-dollar deals by both companies in recent months, and the oil giants have said they aren’t done shopping.
Exxon scooped up pipeline operator and oil producer Denbury for $4.9 billion in July and Chevron agreed in May to buy shale driller PDC Energy for $6.3 billion. Both transactions were all-stock, low-premium deals that showed the companies could still make big bets despite a push by Wall Street for austerity.
Exxon CEO Darren Woods said the company is actively on the hunt for acquisition targets that are a good match.
“We’re continuing to look for that, but we’re not going to compromise our expectation of generating returns and growing value for shareholders,” he said in a conference call with investors.
Chevron CEO Mike Wirth said in a recent TV interview his company is open to more deals following the PDC acquisition.
In picking off two smaller companies, Exxon and Chevron revealed some of their strategy to investors who have asked how they plan to grow as they sit on historically large piles of cash in the wake of last year’s energy price hikes.
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