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Exxon Mobil's (XOM) earnings report exceeded fourth quarter expectations, driven by higher oil (CL=F, BZ=F) and gas (RB=F) production. Chevron (CVX) experienced its first refining business loss since 2020. Meanwhile, Phillips 66 (PSX) posted a smaller-than-expected loss in the quarter
Hedgeye energy risk management energy analyst Fernando Valle highlights on Morning Brief that free cash flow generation and the sustainability of payouts are the key drivers behind Exxon's outperformance.
"And that's why you're seeing Exxon outperform here while the other two are doing worse off," he says, while emphasizing Exxon's superior growth prospects, particularly from its Guyana project and Permian Basin operations.
He contrasts this with Chevron, which he believes lacks sufficient low-cost assets to maintain growth, adding, “Chevron has an issue with their go forward portfolio.”
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This post was written by Josh Lynch