ExxonMobil quarterly earnings tumble 46pc: Update
Total quarterly income fell by 46pc to \$4.9bn versus a year earlier, and lower prices reduced upstream income to \$2.9bn.
In contrast, strong prices had helped boost upstream income by \$580mn in the second quarter of 2014 and by \$410mn in the first quarter of 2014.
"In the upstream, we increased production from new developments, while the downstream and chemical segments delivered strong results across all regions," vice president for investor relations Jeff Woodbury said on an earnings call.
Downstream profits nearly doubled over the quarter to \$1.7bn as ExxonMobil's refineries capitalized on the lower crude prices. Stronger margins accounted for \$1bn of the sector increase. Oil product sales held flat at last year's level of 5.8mn b/d.
The business did well "driven by lower feedstock costs and improved demand" for products like gasoline, distillates and fuel oil, Woodbury said.
Oil and gas realizations were sharply lower in the first quarter even though the pace of the decline in prices had tempered and the market began turning. Brent ended the fourth quarter at \$57.33/bl, after dipping to a low of \$55.81/bl, versus \$94.67/bl in the third. In contrast, it ended the first quarter at \$55.11, recovering from a low touched of \$45.19/bl.
Factoring in that lag, ExxonMobil looks set to post higher upstream income in the quarter that started 1 April, even if prices hold at current levels, reflecting the improvement seen from the troughs touched in the first quarter.
ExxonMobil's oil equivalent output rose by 2.3pc in the first quarter from a year earlier. Liquids output rose 129,000 b/d to 2.3mn b/d in the first quarter, while natural gas fell 188mn cf/d to 11.8 Bcf/d.
Output is expected to increase further as the company brings online seven new projects through the year, including the Hadrian South subsea development in the Gulf of Mexico and the Kizomba satellite phase II in Angola Block 15. The project develops 190mn bl from three fields and gross output is expected to reach 70,000 b/d, helping boost total Block 15 output to 350,000 b/d, Woodbury said.
Income may also improve as the major captures incremental savings of 20pc in per well cost as service providers and suppliers reduce their charges for rigs and chemicals, Woodbury said, adding that capital expenditures guidance for the year remains unchanged at \$34bn.
Of the total liquids output, the US posted an increase to 472,000 b/d from 442,000 b/d, Africa rose to 519,000 b/d from 480,000 b/d and Canada and South America rose to 368,000 b/d from 315,000 b/d. Asia increased to 678,000 b/d from 666,000 b/d, Europe held steady at 200,000 b/d versus 195,000 b/d and Australia and Oceania fell to 40,000 b/d from 50,000 b/d.
Natural gas output fell across the board. In Asia, the drop was to 4.28 Bcf/d from 4.52 Bcf/d, in the US to 3.22 Bcf/d from 3.41 Bcf/d, in Europe to 3.45 Bcf/d from 3.47 Bcf/d, and in Canada and South America to 310mn cf/d from 336mn cf/d.
On an oil equivalent basis, output increased to 4.25mn b/d of oil equivalent (boe/d) from 4.15mn boe/d a year earlier.
The company's total worldwide capex fell to \$7.7bn from \$8.4bn a year earlier.
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