The energy sector has been buzzing with optimism lately, as oil stocks have surged by approximately 21% over recent months amid stabilizing crude prices, geopolitical tensions, and renewed demand forecasts. This rally, driven by factors like OPEC+ production adjustments and global economic recovery signals, has investors eyeing opportunities in both public and private oil and gas plays. While public companies offer liquidity and transparency, private investments provide unique tax perks that can enhance returns. Below, we explore top players in oil exploration and production (E&P) and oilfield services, their recent earnings performance, and guidance on navigating tax-advantaged private opportunities.
Top Oil Exploration and Production Companies: Recent Earnings Insights
The E&P segment, focused on finding and extracting hydrocarbons, has seen mixed results in late 2025 amid volatile oil prices. Leading firms like ExxonMobil, Chevron, and ConocoPhillips reported solid production growth but faced headwinds from lower commodity prices compared to 2024. Here’s a summary of their Q4 2025 earnings:
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Company
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Q4 2025 Earnings
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Full-Year 2025 Earnings
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Key Highlights
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Year-Over-Year Change
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|---|---|---|---|---|
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ExxonMobil (XOM)
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$6.5B ($1.53/share); Adjusted $7.3B ($1.71/share)
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$28.8B; Adjusted $30.1B
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Record production; Cash flow from operations $52B full-year; Distributed $37.2B to shareholders
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Earnings down ~14% due to weaker crude prices and higher costs
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Chevron (CVX)
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$2.8B ($1.39/share); Adjusted $3.0B ($1.52/share)
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Not specified in detail; Adjusted full-year ~$13.5B
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Worldwide production up 12% to record levels; Cash flow from operations $10.8B in Q4
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Adjusted earnings down ~17% from Q4 2024; Beat estimates
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ConocoPhillips (COP)
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$1.4B ($1.17/share); Adjusted $1.3B ($1.02/share)
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Not specified; Full-year production ~2.32M boe/d in Q4
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Q4 production 2.32M boe/d; Returned $2.1B to shareholders in Q4
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Earnings down ~39% from Q4 2024; 2026 guidance: Capex ~$12B, production 2.33-2.36M boe/d
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Occidental Petroleum (OXY)
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Q4 report scheduled for Feb. 18, 2026
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Estimated Q4 EPS $0.19 (down 76% YoY)
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Focus on Permian growth; Potential Venezuela re-entry
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Revenue estimate $5.88B (down 14% YoY)
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Devon Energy (DVN)
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Q4 report scheduled for Feb. 17, 2026
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Estimated Q4 EPS $0.86 (down 26% YoY)
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Emphasis on Delaware Basin; Strong free cash flow expected
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Revenue estimate $4.03B (down 8.5% YoY)
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These companies benefited from higher output in key basins like the Permian and Guyana, offsetting price weakness. For 2026, expect modest production growth with a focus on capital discipline and shareholder returns.
Top Oilfield Service Companies: Earnings Performance Amid Market Shifts
Oilfield services providers, which support E&P through drilling, completions, and technology, showed resilience internationally but faced North American softness. SLB, Halliburton, and Baker Hughes reported steady demand for advanced tech and gas-related services.
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Company
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Q4 2025 Earnings
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Full-Year 2025 Earnings
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Key Highlights
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Year-Over-Year Change
|
|---|---|---|---|---|
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SLB (formerly Schlumberger)
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Adjusted EBITDA $2.1B (margin 23.9%)
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Revenue $36.1B; Adjusted EBITDA $8.5B
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Record revenue growth; Committed to >$4B shareholder returns in 2026; Dividend up 3.5%
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Revenue up ~9% sequentially; Full-year EBITDA down 7%
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Halliburton (HAL)
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$589M ($0.70/share); Adjusted $576M ($0.69/share)
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Adjusted operating income $3.1B
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International revenue up 2.9%; Strong cash flow $1.2B in Q4
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Adjusted profit up 11%; North America flat, international stable
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Baker Hughes (BKR)
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Adjusted EPS $0.78; Revenue $7.39B
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Revenue $27.7B; Adjusted EBITDA $4.83B (record)
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Industrial & Energy Tech revenue up 9% to $3.8B; Record free cash flow $2.7B
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Adjusted profit up 11%; Oilfield services down 8%
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These firms highlighted growth in international and gas tech segments, with 2026 guidance pointing to mid-single-digit EBITDA growth for Baker Hughes and flat-to-modest international revenue for Halliburton.
Exploring Tax-Advantaged Investments in Privately Held Oil and Gas Companies
For accredited investors seeking diversification beyond public markets, privately held oil and gas ventures—often structured as direct participation programs (DPPs), joint ventures, or limited partnerships—offer compelling tax incentives rooted in U.S. policy to boost domestic production. These aren’t passive investments; working interests allow losses to offset active income like salaries.
Key tax advantages include:Intangible Drilling Costs (IDCs): Up to 100% deductible in the first year for costs like labor and fuel (typically 65-85% of investment).
Depletion Allowance: 15% of gross income tax-free to account for resource depletion.
Tangible Drilling Costs (TDCs): 100% depreciable over time for equipment.
Active Income Treatment: Losses offset W-2 or business income, unlike passive real estate.
1031 Exchanges and Opportunity Zones: Defer capital gains by rolling into like-kind energy assets or QOZ funds.
Overall, these can yield tax savings exceeding 80% of the initial investment over a project’s life, effectively subsidizing returns.
Minimum investments often start at $25,000-$50,000, with potential for monthly income from production.
What Investors Should Look For in Private Oil and Gas Opportunities
While tax perks are attractive, private investments carry risks like commodity volatility, dry wells, and illiquidity. Approach with caution—only accredited investors qualify, and due diligence is crucial.
Key factors to evaluate:
Operator Track Record: Vet the sponsor’s experience through past projects, success rates, and cycle navigation. Look for transparency in engineering reports and financials.
Geology and Location: Assess reserve quality, production potential, and costs. Favor proven basins like the Permian over speculative areas.
Risk Profile: Understand working vs. royalty interests—working offers bigger tax breaks but more exposure to costs and liabilities.
Financial Projections: Scrutinize assumptions on oil prices, returns, and fees. Watch for high commissions (up to 15-20%) that erode capital.
Regulatory and Environmental Risks: Ensure compliance; consider ESG factors and potential policy shifts.
Diversification and Liquidity: Limit exposure to 5-10% of portfolio; these are illiquid, so plan for long-term holds.
Red flags include “guaranteed” returns or high-pressure sales—consult a financial advisor and review SEC filings.
With oil’s bull run underway, blending public stocks for growth and private deals for tax efficiency could optimize portfolios, but always prioritize risk management.
As we always point out, we do not give investment advice, and recommend you talk with your CPA or certified financial planner. We enjoy sharing market information and tools we use for you to make up your own best path forward.
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