*

Output hits nearly 4.6 million barrels of oil and gas per

day

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Shareholder returns reach 20% with expanded dividend

HOUSTON, Nov. 1 (Reuters) - Exxon Mobil ( XOM ) on

Friday beat Wall Street's third quarter profit estimate, boosted

by strong oil output in its first full quarter that includes

volumes from U.S. shale producer Pioneer Natural Resources.

Oil industry earnings have been squeezed this year by

slowing demand and weak margins on gasoline and diesel. But

Exxon's year-over-year profit fell 5%, a much smaller drop than

at rivals BP and TotalEnergies, which posted

sharply lower quarterly results.

The U.S. oil producer reported income of $8.61 billion, down

from $9.07 billion a year ago. Its $1.92 per share profit topped

Wall Street's outlook of $1.88 per share, on higher oil and gas

production and spending constraints.

"We had a number of production records" in the quarter, said

finance chief Kathryn Mikells, citing an about 25% year-on-year

increase in oil and gas output, to 4.6 million barrels per day.

Exxon earlier this month had flagged operating profit likely

fell, leading Wall Street analysts to shave their quarterly per

share earnings outlook by nearly a dime.

The results included Exxon's first full quarter of

production following its acquisition in May of Pioneer Natural

Resources. The $60 billion deal drove production in the top U.S.

shale basin to nearly 1.4 million barrels per day of oil and

gas, helping overcome a 17% decline in average oil prices in the

quarter ended Sept. 30.

Exxon disclosed it raised its quarterly dividend by 4% after

generating free cash flow of $11.3 billion, well above analysts'

estimates. Rivals Saudi Aramco and Chevron ( CVX ) have had to

borrow this year to cover shareholder returns after boosting

dividends and buybacks to attract investors.