The largest U.S. energy companies reported robust profits on Friday, continuing a quarter in which the world's big oil firms reported their strongest gains since a pronounced price crash began in 2014.
Exxon Mobil Corp. nearly doubled its net income compared with a year ago, to $3.35 billion, and Chevron Corp. saw profits jump to $1.45 billion in the second quarter.
The results came even as oil prices fell again in the quarter, dipping below $50 a barrel, and questions about future demand weighed on the industry, underscoring the dramatic transition under way in the industry to curb ambitions and cut costs.
They echoed results at other big oil firms such as Royal Dutch Shell PLC, Norway's Statoil ASA and France's Total SA. Together, the companies generated cash and profits in the first half of 2017 that far exceed what they achieved in the last two years.
The five companies generated more than $30 billion in cash and managed to avoid sliding deeper into debt, an increasingly important barometer of their ability to survive the crisis.
In addition to cutting costs by tens of billions, many have reoriented their businesses toward projects that can be completed quickly and produce profits within a few years rather than after more than a decade of upfront, billion-dollar spending.
While the performance doesn't yet exceed precrash profits, the companies are beginning to show that they can thrive in a lower-price era.
"The companies are at different stages of learning how to deal with this low-price environment," said Brian Youngberg, an energy analyst at Edward Jones. "They will need to remained disciplined with their spending or investors will shun them."
Oil prices have risen recently to two-month highs on building momentum from recent inventory declines. U.S. prices have settled above the $49 mark for the first time since May 30 and momentum-based traders appear poised to send prices back above $50 a barrel, brokers have said.
The push to a so-called "short cycle" strategy has helped companies such as Exxon, Chevron and Shell prepare for a world in which prices don't return to $100 a barrel for many years, if ever.
Shell Chief Executive Ben van Beurden said Thursday that the company had adjusted to a world in which prices could remain "lower forever" due to the potential for declining demand.
While Exxon and Chevron don't share the view that falling oil demand is a threat before 2040, the companies have nonetheless pivoted toward investments that pay off quickly, especially in the U.S.
Through 2020, the U.S. units of big oil companies such as Exxon are expected to grow by about 7% a year, adding about 800,000 barrels a day of oil and gas production, largely from West Texas and the Gulf of Mexico, according to Tudor Pickering Holt & Co. Both Chevron and Exxon lost money in their U.S. drilling operations.
For the June quarter, Exxon reported its profit climbed to $3.35 billion, or 78 cents a share, from $1.70 billion, or 41 cents a share, a year earlier. Analysts polled by Thomson Reuters expected earnings of 84 cents a share. Exxon shares were down 2.8% Friday morning.
Chevron reported net income of $1.45 billion, up from a loss of $1.47 billion a year earlier. The company's shares were up less than 1% Friday morning.
Ezequiel Minaya contributed to this article
Write to Bradley Olson at Bradley.Olson@wsj.com
(END) Dow Jones Newswires
July 28, 2017 11:02 ET (15:02 GMT)