On August 2nd, news said that $Exxon Mobil (XOM.US)$After its $63 billion acquisition of Pioneer Natural Resources, Exxon Mobil achieved an historical high in oil & gas production while also exceeding market expectations in profit.

After the financial report was released, as of the time of publication, Exxon Mobil's stock price rose 1% on Friday's opening. This year, the stock has accumulated a nearly 17% increase.

Data shows that ExxonMobil's second-quarter earnings per share were $2.14, which is 11 cents higher than the market's general expectations. The acquisition of Pioneer Natural Resources was completed in early May this year, which helped ExxonMobil's overall production increase by 15% compared to the previous quarter and laid the foundation for daily production of more than 4 million barrels this year. Net income was $9.24 billion, higher than the $7.88 billion in the same period last year.

ExxonMobil's performance has convinced investors that despite the bearish signals in the crude oil market, this oil giant has the ability to increase the scale of share buybacks by 15% to $20 billion per year. The company is the best-performing large oil stock this year, with cash flow from operating activities in the second quarter climbing from $9.4 billion in the same period last year to $10.5 billion.

In an interview, CFO Kathy Mikells said:"This reflects how well we have done in capital allocation by spending money on the right things that can generate good returns. At the same time, our business efficiency is also improving. This is a very powerful combination."

With the surge in commodity prices in 2022 and 2023, many oil exploration companies have increased cash returns to shareholders and invested heavily in low-carbon substitutes. However, with the failure of many renewable energy projects, oil industry executives have been forced to refocus their attention on traditional fossil fuel projects that can generate long-term cash flows.

ExxonMobil is an exception that has never given up fossil fuels. Through rapidly developing projects in Guyana and the Permian Basin, the company has increased production and returns.

Production in Guyana and the Permian Basin reached an all-time high in the second quarter. ExxonMobil is now the largest producer in the Permian Basin after completing the transaction with Pioneer Natural Resources, which is the largest transaction since the historic Mobil merger in 1999.

Mikells said:"This gives us a big boost."

Due to the merger with Pioneer Natural Resources, ExxonMobil plans to increase annual capital expenditure by 12% to $28 billion this year. Mikells said the increase was "consistent" with the previous spending of Pioneer Natural Resources. She added that cost savings from the integration process exceeded expectations.

However, due to lower-than-expected demand for gasoline and diesel, ExxonMobil's refining business has been weak this year. ExxonMobil has a larger refining business than its peers. The profit margin of fuel manufacturing has been squeezed by the rise in the price of heavy crude oil in countries such as Canada.