The companies have pumped heavy investment into the Permian Basin NEW YORK: US oil giants Exxon Mobil and Chevron have reported a drop in their third-quarter profits on lower oil prices, even as increased investment in US shale projects boosted output. The companies have pumped heavy investment into the Permian Basin, a shale-rich region in Texas and New Mexico drawing considerable interest due to newer technologies that have made developing unconventional shale resources profitable. These efforts enabled Exxon and Chevron, the two biggest US oil companies, to increase overall oil and gas production in the quarter ending September 30. But results were dented by a retreat in crude oil prices during the three-month period, as signs of a slowing global economy amplified worries about a glut of supply. US oil prices traded in the $50-$60 a barrel range for much of the quarter, down about $15 from the previous year. Exxon reported quarterly profits of $3.2 billion, plunging by 49.2 percent from the year-ago period, as revenues fell 15.1 percent to $65 billion. CEO Darren Woods said that the company’s ramp-up in the Permian was running ahead of schedule, saying “we are making excellent progress on our long-term growth strategy.” At Chevron, net profits were $2.6 billion, which was 36.2 percent below the same period of 2018. Revenues were $36.1 billion, a 17.9 percent decline. “Third quarter earnings and cash flow were solid, but down from our very strong results of a year ago,” said Chevron CEO Michael Wirth. “Lower crude oil and natural gas prices more than offset a three percent increase in net oil-equivalent production from last year’s third quarter.” Also on Friday, Royal Dutch Shell faced a torrent of criticism from analysts for warning of possible delays to its $25 billion share buyback program, with some saying the move had undermined the credibility of the oil giant’s management. Shell, the world’s second-largest listed oil and gas company, saw its shares close more than 4 percent lower on Thursday, wiping out $10 billion of its market value. The oil giant had earlier reported stronger-than-expected third-quarter profits which were, however, overshadowed by CEO Ben van Beurden’s warning about shareholder returns. “The prevailing weak macroeconomic conditions and challenging outlook inevitably create uncertainty about the pace of reducing gearing to 25 percent and completing the share buyback program within the 2020 timeframe,” van Beurden said. “The planned $25 billion share buyback before end-2020 was acknowledged by the CEO as a ‘statement of the obvious.’ We agree but it had a predictable and in our view unnecessary impact,” UBS analyst Jon Rigby said in a note. The comments, Rigby said, “are likely to exasperate long-suffering investors further.” Rigby retains a ‘buy’ recommendation for Shell. Shell, the most profitable oil major in 2018 ahead of larger rival ExxonMobil, has in recent years been many investors’ top pick among the group after the Anglo-Dutch firm cut costs and ramped up commitments for shareholder returns. Shell plans to boost payouts to investors through dividends and share buybacks to $125 billion between 2021 and 2025. Bernstein analyst Oswald Clint said van Beurden was being over-cautious. “We’ve no doubt reiterating our buy on Shell is like talking to the wall today and it’s a blow for one of our 2019 top picks,” Clint said in a note.