EXXON EARNINGS $11.3 BLN
EXXONMOBIL - Exxon Mobil Corporation announced estimated third quarter 2017 earnings of $4 billion, or $0.93 per diluted share, compared with $2.7 billion a year earlier as commodity prices improved and performance in the Upstream and Downstream strengthened. Impacts related to Hurricane Harvey reduced earnings by an estimated 4 cents per share.
"A 50 percent increase in earnings through solid business performance and higher commodity prices is a step forward in our plan to grow profitability," said Darren Woods, chairman and chief executive officer. "For the fourth-consecutive quarter, we generated cash flow from operations and asset sales that more than covered our dividends and net investments in the business."
Upstream earnings rose to $1.6 billion as commodity prices increased. Building on its recent success in deepwater exploration, such as the Turbot discovery in Guyana, ExxonMobil added 12 offshore blocks in Brazil, capturing acreage with high resource potential and competitive fiscal terms.
Downstream results increased to $1.5 billion, despite Hurricane Harvey impacts and the absence of favorable asset management gains of $380 million in the prior year from the sale of Canadian retail assets. These results were achieved as the company worked quickly to safely bring refineries back online following the storm and to restore product supplies.
Chemical earnings were $1.1 billion, down slightly from a year ago on lower commodity margins and hurricane impacts, partially offset by volume growth. During the quarter the company enhanced its position to capture growing demand in Asia by completing the purchase of an aromatics plant in Singapore.
Third Quarter 2017 Highlights
• Earnings of $4 billion increased 50 percent from the third quarter of 2016.
• Earnings per share assuming dilution were $0.93.
• Cash flow from operations and asset sales increased 33 percent to $8.4 billion, including proceeds associated with asset sales of $854 million.
• Capital and exploration expenditures were $6 billion, including an aromatics plant acquisition in Singapore.
• Oil-equivalent production was 3.9 million barrels per day, up 2 percent from the prior year. Excluding entitlement effects and divestments, oil-equivalent production remained at 2 percent higher than the prior year.
• The corporation distributed $3.3 billion in dividends to shareholders.
• Dividends per share of $0.77 increased 2.7 percent compared to the third quarter of 2016.
• The company acquired an interest in 12 blocks offshore Brazil during the last bid round completed during the quarter. The bid resulted in the addition of 2 million high-potential acres with competitive fiscal terms.
• The company completed the Turbot-1 exploration well offshore Guyana. The well encountered 75 feet (23 meters) of high-quality, oil-bearing sandstone, and represents ExxonMobil's fifth discovery to date in the country.
• ExxonMobil signed a production sharing contract for Block 59 located 190 miles (305 kilometers) offshore Suriname. The deepwater block has an area of 2.8 million acres and significantly expands the corporation's operated acreage in the Guyana-Suriname basin.
• During the quarter, ExxonMobil announced it added 22,000 acres since May to its Permian Basin portfolio through a series of acquisitions and acreage trades. Located in the Delaware and Midland Basins, the new acreage adds over 400 million oil-equivalent barrels to the company's existing Permian Basin resource base of 6 billion oil-equivalent barrels.
• ExxonMobil completed the acquisition of one of the world's largest aromatics facilities, located in Singapore, from Jurong Aromatics Corporation Pte Ltd. The acquisition will provide operational and logistical synergies between the plant and ExxonMobil's integrated refining and petrochemical complex, as well as increase ExxonMobil Singapore's aromatics production to over 3.5 million metric tons per year.
Third Quarter 2017 vs. Third Quarter 2016
Upstream earnings were $1.6 billion in the third quarter of 2017, up $947 million from the third quarter of 2016. Higher liquids and gas realizations increased earnings by $860 million. Higher volume and mix effects increased earnings by $20 million. All other items increased earnings by $70 million as lower expenses were partly offset by unfavorable foreign exchange effects.
On an oil-equivalent basis, production increased 2 percent from the third quarter of 2016. Liquids production totaled 2.3 million barrels per day, up 69,000 barrels per day as lower downtime and higher project volumes were partly offset by field decline. Natural gas production was 9.6 billion cubic feet per day, down 16 million cubic feet per day from 2016 as field decline and lower demand were partly offset by project ramp-up, primarily in Australia, and work programs.
U.S. Upstream results were a loss of $238 million in the third quarter of 2017, compared to a loss of $477 million in the third quarter of 2016. Non-U.S. Upstream earnings were $1.8 billion, up $708 million from the prior year.
Downstream earnings were $1.5 billion, up $303 million from the third quarter of 2016. Higher refining margins increased earnings by $1 billion. Volume and mix effects decreased earnings by $160 million. All other items decreased earnings by $550 million, reflecting the absence of favorable asset management gains of $380 million in the prior year from the sale of Canadian retail assets and higher expenses related to Hurricane Harvey. Petroleum product sales of 5.5 million barrels per day were 43,000 barrels per day lower than last year's third quarter.
Earnings from the U.S. Downstream were $391 million, up $166 million from the third quarter of 2016. Non-U.S. Downstream earnings of $1.1 billion were $137 million higher than prior year.
Chemical earnings of $1.1 billion were $79 million lower than the third quarter of 2016. Weaker margins decreased earnings by $200 million. Volume and mix effects increased earnings by $120 million. Third quarter prime product sales of 6.4 million metric tons were 313,000 metric tons or 5 percent higher than the prior year, despite Hurricane Harvey impacts.
U.S. Chemical earnings of $403 million were $31 million lower than the third quarter of 2016. Non-U.S. Chemical earnings of $689 million were $48 million lower than prior year.
Corporate and financing expenses were $221 million for the third quarter of 2017, down $149 million from the third quarter of 2016 mainly due to favorable impacts from the resolution of long-standing tax items.
First Nine Months 2017 Highlights
• Earnings of $11.3 billion increased 84 percent from $6.2 billion in 2016.
• Earnings per share assuming dilution were $2.66.
• Cash flow from operations and asset sales was $24.4 billion, including proceeds associated with asset sales of $1.7 billion.
• Capital and exploration expenditures were $14.1 billion, down 3 percent from 2016.
• Oil-equivalent production was 4 million barrels per day, down 1 percent from the prior year. Excluding entitlement effects and divestments, oil-equivalent production was up 1 percent from the prior year.
• The corporation distributed $9.7 billion in dividends to shareholders.
First Nine Months 2017 vs. First Nine Months 2016
Upstream earnings were $5 billion, up $4.2 billion from 2016. Higher realizations increased earnings by $4.1 billion. Unfavorable volume and mix effects decreased earnings by $300 million. All other items increased earnings by $380 million, primarily due to lower expenses partly offset by unfavorable tax items in the current year.
On an oil-equivalent basis, production of 4 million barrels per day was down 1 percent compared to 2016. Liquids production of 2.3 million barrels per day decreased 65,000 barrels per day as field decline and lower entitlements were partly offset by increased project volumes and work programs. Natural gas production of 10.1 billion cubic feet per day increased 106 million cubic feet per day from 2016 as project ramp-up, primarily in Australia, was partly offset by field decline.
U.S. Upstream results were a loss of $439 million in 2017, compared to a loss of $1.8 billion in 2016. Earnings outside the U.S. were $5.4 billion, up $2.8 billion from the prior year.
Downstream earnings of $4 billion increased $1.1 billion from 2016. Stronger refining and marketing margins increased earnings by $1.3 billion, while volume and mix effects increased earnings by $110 million. All other items decreased earnings by $290 million, mainly reflecting the absence of the Canadian retail assets sale. Petroleum product sales of 5.5 million barrels per day were 26,000 barrels per day higher than 2016.
U.S. Downstream earnings were $1 billion, an increase of $206 million from 2016. Non-U.S. Downstream earnings were $3 billion, up $867 million from the prior year.
Chemical earnings of $3.2 billion decreased $495 million from 2016. Weaker margins decreased earnings by $320 million. Volume and mix effects increased earnings by $70 million. All other items decreased earnings by $250 million, primarily due to higher expenses from increased turnaround activity and new business growth. Prime product sales of 18.6 million metric tons were up 22,000 metric tons from the first nine months of 2016.
U.S. Chemical earnings were $1.4 billion, down $111 million from 2016. Non-U.S. Chemical earnings of $1.8 billion were $384 million lower than prior year.
Corporate and financing expenses were $954 million in 2017 compared to $1.4 billion in 2016, with the decrease mainly due to favorable impacts from the resolution of long-standing tax items.
During the first nine months of 2017, Exxon Mobil Corporation purchased 6 million shares of its common stock for the treasury at a gross cost of $496 million. These shares were acquired to offset dilution in conjunction with the company's benefit plans and programs. The corporation will continue to acquire shares to offset dilution in conjunction with its benefit plans and programs, but does not currently plan on making purchases to reduce shares outstanding. The company also issued a combined 96 million shares of common stock during the first quarter to complete the acquisition of InterOil Corporation and the acquisition of entities that own oil and gas properties located primarily in the Permian Basin.
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IMF - Output grew by 3.8 percent in 2017, underpinned by a resilient non-hydrocarbon sector, with robust implementation of GCC-funded projects as well as strong activity in the financial, hospitality, and education sectors. The banking system remains stable with large capital buffers. Growth is projected to decelerate over the medium term.
IMF - Higher oil prices and short-term portfolio inflows have provided relief from external and fiscal pressures but the recovery remains challenging. Inflation declined to its lowest level in more than two years. Real GDP expanded by 2 percent in the first quarter of 2018 compared to the first quarter of last year. However, activity in the non-oil non-agricultural sector remains weak as lower purchasing power weighs on consumer demand and as credit risk continues to limit bank lending.