OREANDA-NEWS. Exxon Mobil Corporation announced estimated 2015 earnings of $16.2 billion compared with $32.5 billion a year earlier. Higher Downstream and Chemical earnings were offset by sharply lower commodity prices in the Upstream.

“While our financial results reflect the challenging environment, we remain focused on the business fundamentals, including project execution and effective cost management,” said Rex W. Tillerson, chairman and chief executive officer. “The scale and diversity of our cash flows, along with our financial strength, provide us with the confidence to invest through the cycle to create long-term shareholder value.”

ExxonMobil completed six major Upstream projects during the year and achieved its full-year plan to produce 4.1 million oil-equivalent barrels per day. These new developments in Canada, Indonesia, Norway, the United States and West Africa added 300,000 oil-equivalent barrels per day of working interest production capacity.

Fourth quarter earnings were $2.8 billion, or $0.67 per diluted share, down from $6.6 billion in the fourth quarter of 2014. Lower commodity prices in the Upstream were partly offset by higher Downstream earnings.

During 2015, the corporation distributed $15.1 billion to shareholders in the form of dividends and share purchases to reduce shares outstanding.

Fourth Quarter Highlights

  • Earnings of $2.8 billion decreased $3.8 billion, or 58 percent, from the fourth quarter of 2014.
  • Earnings per share, assuming dilution, were $0.67, a decrease of 57 percent.
  • Capital and exploration expenditures were $7.4 billion, down 29 percent from the fourth quarter of 2014.
  • Oil-equivalent production increased 4.8 percent from the fourth quarter of 2014, with liquids up 14 percent and natural gas down 5.6 percent.
  • Cash flow from operations and asset sales was $5.1 billion, including proceeds associated with asset sales of $785 million.
  • The corporation distributed $3.6 billion to shareholders in the fourth quarter of 2015, including $500 million in share purchases to reduce shares outstanding.
  • Dividends per share of $0.73 increased 5.8 percent compared with the fourth quarter of 2014.
  • ExxonMobil successfully started the onshore central processing facility at the Banyu Urip field in Indonesia, which helped production reach more than 130,000 gross barrels of oil per day in the fourth quarter. The field is currently ramping up to full capacity and is expected to produce 450 million gross barrels of oil over its lifetime.
  • The company is beginning a production pilot program on the La Invernada and Bajo del Choique blocks in the Neuqu?n province of Argentina. This program includes drilling five wells, as well as constructing a production facility and gas pipeline.

Fourth Quarter 2015 vs. Fourth Quarter 2014

Upstream earnings were $857 million in the fourth quarter of 2015, down $4.6 billion from the fourth quarter of 2014. Lower liquids and gas realizations decreased earnings by $3.7 billion, while volume and mix effects increased earnings by $100 million, benefiting from new developments. All other items, including the absence of both the prior year U.S. deferred income tax effects and recognition of a favorable arbitration ruling for expropriated Venezuela assets, decreased earnings by $960 million.

On an oil-equivalent basis, production increased 4.8 percent from the fourth quarter of 2014. Liquids production totaled 2.5 million barrels per day, up 299,000 barrels per day. Project ramp-up, work programs and entitlement effects were partly offset by field decline. Natural gas production was 10.6 billion cubic feet per day, down 631 million cubic feet per day from 2014 due to regulatory restrictions in the Netherlands and field decline, partly offset by entitlement effects.

U.S. Upstream earnings declined $2 billion from the fourth quarter of 2014 to a loss of $538 million in the fourth quarter of 2015. Non-U.S. Upstream earnings were $1.4 billion, down $2.6 billion from the prior year.

Downstream earnings were $1.4 billion, up $854 million from the fourth quarter of 2014. Stronger margins and favorable volume and mix effects increased earnings by $610 million and $70 million, respectively. All other items increased earnings by $170 million, including lower maintenance expenses and favorable foreign exchange and tax effects, partly offset by unfavorable inventory impacts. Petroleum product sales of 5.7 million barrels per day were 166,000 barrels per day lower than the prior year.

Earnings from the U.S. Downstream were $435 million, up $436 million from the fourth quarter of 2014. Non-U.S. Downstream earnings of $916 million were $418 million higher than last year.

Chemical earnings of $963 million were $264 million lower than the fourth quarter of 2014. Margins decreased earnings by $210 million driven by declining realizations. Volume and mix effects increased earnings by $170 million. All other items decreased earnings by $230 million, largely due to unfavorable foreign exchange, tax and inventory effects. Fourth quarter prime product sales of 6.5 million metric tons were 765,000 metric tons higher than the prior year's fourth quarter.

Corporate and financing expenses were $391 million for the fourth quarter of 2015, compared to $622 million in the fourth quarter of 2014, with the decrease due mainly to net favorable tax-related impacts.

During the fourth quarter of 2015, ExxonMobil purchased 9.4 million shares of its common stock for the treasury at a gross cost of $754 million. These purchases included $500 million to reduce the number of shares outstanding, with the balance used to acquire shares to offset dilution in conjunction with the company’s benefit plans and programs. In the first quarter of 2016, the corporation will continue to acquire shares to offset dilution in conjunction with its benefit plans and programs, but does not plan on making purchases to reduce shares outstanding.

Full Year 2015 Highlights

  • Earnings of $16.2 billion decreased 50 percent from $32.5 billion in 2014.
  • Earnings per share, assuming dilution, decreased 49 percent to $3.85.
  • Capital and exploration expenditures were $31.1 billion, down 19 percent from 2014. The company anticipates further reductions in 2016, with capital and exploration expenditures of $23.2 billion, a decrease of 25 percent from 2015.
  • Oil-equivalent production increased 3.2 percent from 2014, with liquids up 11 percent and natural gas down 5.7 percent.
  • Cash flow from operations and asset sales was $32.7 billion, including proceeds associated with asset sales of $2.4 billion.
  • The corporation distributed $15.1 billion to shareholders in 2015 through dividends and share purchases to reduce shares outstanding.

Full Year 2015 vs. Full Year 2014

Upstream earnings were $7.1 billion, down $20.4 billion from 2014. Lower realizations decreased earnings by $18.8 billion. Favorable volume and mix effects increased earnings by $810 million, including contributions from new developments. All other items decreased earnings by $2.4 billion, primarily due to lower asset management gains and the absence of prior year deferred income tax effects.

On an oil-equivalent basis, production of 4.1 million barrels per day was up 3.2 percent compared to 2014. Liquids production of 2.3 million barrels per day increased 234,000 barrels per day, with project ramp-up and entitlement effects partly offset by field decline. Natural gas production of 10.5 billion cubic feet per day decreased 630 million cubic feet per day from 2014 as regulatory restrictions in the Netherlands and field decline were partly offset by project ramp-up, work programs and entitlement effects.

U.S. Upstream earnings declined $6.3 billion from 2014 to a loss of $1.1 billion in 2015. Earnings outside the U.S. were $8.2 billion, down $14.2 billion from the prior year.

Downstream earnings of $6.6 billion increased $3.5 billion from 2014. Stronger margins increased earnings by $4.1 billion, while volume and mix effects decreased earnings by $200 million. All other items decreased earnings by $420 million, reflecting higher maintenance expense and unfavorable inventory impacts, partly offset by favorable foreign exchange effects. Petroleum product sales of 5.8 million barrels per day were 121,000 barrels per day lower than 2014.

U.S. Downstream earnings were $1.9 billion, an increase of $283 million from 2014. Non-U.S. Downstream earnings were $4.7 billion, up $3.2 billion from the prior year.

Chemical earnings of $4.4 billion increased $103 million from 2014. Stronger margins increased earnings by $590 million. Favorable volume and mix effects increased earnings by $220 million. All other items decreased earnings by $710 million, reflecting unfavorable foreign exchange, tax and inventory effects, partly offset by asset management gains. Prime product sales of 24.7 million metric tons were up 478,000 metric tons from 2014.

Corporate and financing expenses were $1.9 billion in 2015 compared to $2.4 billion in 2014, with the decrease due mainly to net favorable tax-related items.

During 2015, ExxonMobil purchased 48 million shares of its common stock for the treasury at a gross cost of $4 billion. These purchases included $3 billion to reduce the number of shares outstanding, with the balance used to acquire shares to offset dilution in conjunction with the company’s benefit plans and programs.