Reuters has reported that Chevron Corp (CVX.N) posted its worst quarterly loss since 2001 on Friday while Exxon Mobil Corp (XOM.N) reported a 59 percent slide in profit.
It said this was coming as the long crude price rout and tumbling refining income inflicted pain across the energy sector.
It said the weak results from two of the world’s largest oil producers came as the energy industry was at a crossroads, trying to survive in an era of low prices, which many analysts see as the new status quo while funding expensive growth projects crucial for long-term survival.
According to an energy analyst, Brian Youngberg: “It is a challenging environment for the integrated. The key is to manage the cash flow as best they can and continue to execute on projects, which they do appear to be doing.”
The report added that Exxon, the world’s largest publicly traded oil producer, shocked Wall Street as its quarterly profit missed expectations, sending its shares down as much as 4.5 percent on Friday.
It said: “Its profit from producing oil and gas fell about 85 percent to $294 million. In the United States, where Exxon is the largest natural gas producer and a major oil producer, the company lost money.”
It said Exxon executives however, defended their business model, saying they had the financial flexibility to do many things, including large acquisitions while maintaining their dividend.
It said the company did cut most of its share buyback program earlier this year.
“Standard & Poor’s downgraded the company’s vaunted “AAA” credit rating to “AA+” earlier this year, as dividends and capital expenditures were exceeding cash flow.
“This month Exxon said it would pay more than $2.5 billion in stock for InterOil Corp (IOC.N), expanding its push into the Asian liquefied natural gas market.”
It further reported that Chevron, the second-largest U.S.-based oil producer, reported its largest quarterly loss in 15 years.
It said the Chief Executive Officer of the company, John Watson acknowledged that the company was in the midst of an “ongoing adjustment to a lower oil price world.
