Give Energy to Your Portfolio

Harshit is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.

ExxonMobil (NYSE: XOM) one of the largest energy producers in the world is engaged in the exploration and production and processing of crude oil into fuels such as gasoline and diesel. The company with the reserves of 72 billion oil-equivalent barrels at the end of 2007 and, at then (2007) rates of production, is expected to last over 14 years. With more than 40 oil refineries in the world, the corporation constitutes a combined daily refining capacity of 6.3 million barrels (1,000,000 m3).  For the fourth quarter, Exxon’s refineries reported a net income to a five-year high of almost $9.95 billion.

Financial Highlights

According to the statement, the company earned $1.77 billion during the period, a four-fold increase from $425 million a year earlier. Credit of the growth also goes to the Irving, Texas-based company who lowered the amount of crude it processed by 7.9 percent to 4.837 million barrels a day compared to the same period of 2011. Crude production of Exxon, which is almost six times more valuable than gas on an energy-equivalent basis, fell 2.1 percent to 2.203 million barrels a day from 2.25 million during the year-earlier period and with P/E Ratio of 11.4 its chemical earnings increased to $958 million from $543 million.

Exxon makes it up for a 12% drop in oil and gas earnings to $7.76 billion. Oil and gas output from the company’s wells fell approximately by 5% to the equivalent of 4.293 million barrels of crude a day from 4.53 million a year earlier.

Clash of the Energy Producers

Chevron Corp (NYSE: CVX) another energy producer, boosting profits with its subsidiaries that operates in two segments, Upstream and Downstream. The Upstream involved in exploration, development, and production of crude oil and natural gas and refining crude oil into petroleum products is done through Downstream segment. Chevron’s net earnings rose 41%, with the company posting per-share earnings of $3.70, compared with $2.58 a year ago and expectations around $3.03 is outperforming Exxon.

Marathon Petroleum Corp (NYSE: MPC), the Ohio- based refiner whose spin off got completed by Marathon Oil in June 2011, also giving a thrill to Exxon by reporting profit of $755 million for the quarter after a $75 million loss a year earlier.

Takeaway Advice

Exxon, the world’s largest publicly traded oil company, needs multiple projects to offset declining production although the company hasn’t announced substantial projects for some time. In contrast, not only output at Chevron has been higher, its production prospects are brighter. Chevron is also more profitable on a per-barrel basis and it’s a cheaper stock in terms of valuation.

Being a much larger company, Exxon, enjoys a strong financial statements with low debt and ample cash in hand is still a solid option for investors, and those looking for safety both Exxon and Chevron are a “strong buy”.


harshitm has no position in any stocks mentioned. The Motley Fool recommends Chevron. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!

blog comments powered by Disqus

Compare Brokers

Fool Disclosure