Chevron CVX and ExxonMobil XOM are two of the largest publicly traded oil and gas companies in the world with operations that span almost every corner of the globe. The Permian Basin has become a linchpin for both as they sharpen their focus on scalable, high-return assets. Each company is doubling down on this prolific region serving as a key source of cash flow, but their paths diverge in strategy and execution.

The Importance of Permian Basin

According to the Energy Information Administration (“EIA”), U.S. crude oil production, largely driven by the Permian, is expected to reach 13.5 million barrels per day (bpd) in 2025 and 13.6 million bpd in 2026. With Permian output set to grow by 290,000 bpd this year from 2024 and an additional 170,000 bpd in 2026, the region will account for nearly half of the nation’s oil supply, solidifying its role in the energy market. This surge in production is backed by record-breaking rig efficiency, robust infrastructure and continued investments in drilling innovations, ensuring long-term sustainability and profitability for key players in the basin.

Tracing CVX and XOM’s Development in the Region

Chevron holds 1.78 million net acres in the Delaware and Midland sub-basins of Texas and New Mexico, making it one of the largest leaseholders in the Permian. It boosts efficiency by drilling several horizontal wells from a single site, a method known as factory-style development. In 2024, Chevron’s average daily output from the Permian basin stood at 405,000 barrels of oil, 251,000 barrels of NGLs, and 1.6 billion cubic feet of natural gas.

Chevron aims to reach 1 million barrels of oil-equivalent per day (BOE/d) in 2025 and is already close, producing 992,000 BOE/d in the fourth quarter of 2024. With layered rock formations, upgraded infrastructure, and sustainability steps like using electric fleets and solar energy, Chevron’s strategy focuses on both growth and reducing environmental impact.

Meanwhile, ExxonMobil has aggressively ramped up its Permian presence through acquisitions — most notably its $63 billion buyout of Pioneer Natural Resources in 2024. This move expanded Exxon’s footprint to more than 1.3 million net acres and significantly boosted output. In 2024, ExxonMobil’s Permian production averaged 1.185 million BOE/d, up 570,000 from the prior year. The company plans to double that to 2.3 million BOE/d by 2030. To get there, it’s using advanced methods like special proppants and cube drilling, and it aims to cut emissions to net zero in its original Permian operations by 2030 and in Pioneer’s by 2035.

Strategy and Differentiation

Chevron leans on a disciplined capital allocation model, emphasizing cost control and asset returns. It supplements operated activity with joint ventures and royalty interests to balance risk and capital intensity. In particular, Chevron’s use of royalty interests allows it to benefit from production upside without committing large amounts of capital. On the other hand, ExxonMobil is leaning heavily into scale and integration. ExxonMobil, on the other hand, is integrating scale through acquisitions and focusing on operational synergies. Its Pioneer deal gave it high-quality, contiguous acreage, which is expected to support production growth at lower costs. Both companies are aligning their Permian strategies with broader low-carbon goals but are taking slightly different paths to get there.

Comparing Stock Performance and Valuation

Over the past six months, Chevron has outperformed ExxonMobil despite both stocks being weighed down by trade-related uncertainty and new U.S. tariffs. The market has been jittery amid fears that steep levies could dent global demand.

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Chevron’s valuation remains attractive, too. It trades at an EV/EBITDA multiple of 5.55, which is more favorable compared to ExxonMobil. This suggests better value for investors focused on cash flow and capital discipline.

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How Do Earnings Forecasts for CVX and XOM Compare?

Looking ahead, Chevron appears better positioned in terms of earnings momentum. The Zacks Consensus Estimate calls for a 2.9% decline in its 2025 EPS, followed by a strong 23.1% rebound in 2026.

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In contrast, ExxonMobil is projected to see a steeper 10.5% decline this year, with a 21.1% recovery anticipated in 2026. The near-term outlook for ExxonMobil remains more uncertain, weighed down by integration costs from recent acquisitions and ongoing inflationary pressures. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
 

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Which Stock Has the Edge?

While both Chevron and ExxonMobil are deeply invested in the Permian Basin and share a commitment to scale and lower emissions, Chevron currently holds the upper hand. It combines consistent execution with financial discipline and a clear path toward its production goals. While CVX holds a Zacks Rank #3 (Hold), it stands on firmer ground than XOM, which holds a Zacks Rank #4 (Sell). For now, Chevron looks better placed to navigate market headwinds and deliver stable, long-term shareholder value.

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This article originally published on Zacks Investment Research (zacks.com).

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