EXXON EARNINGS $3.35 BLN
EXXONMOBIL - Exxon Mobil Corporation today estimated second quarter 2017 earnings of $3.4 billion, or $0.78 per diluted share, compared with $1.7 billion a year earlier, as oil and gas realizations increased and refining margins improved.
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|Capital and Exploration|
"These solid results across our businesses were driven by higher commodity prices and a continued focus on operations and business fundamentals," said Darren W. Woods, chairman and chief executive officer. "Our job is to grow long-term value by investing in our integrated portfolio of opportunities that succeed regardless of market conditions."
During the second quarter, Upstream earnings rose substantially to $1.2 billion as realizations increased. Downstream results grew 68 percent to $1.4 billion on improved refining margins and higher refinery volumes. Chemical earnings were $985 million, $232 million lower than a year ago, primarily due to higher turnaround activities, lower volumes, and decreased margins.
Upstream volumes declined 1 percent to 3.9 million oil-equivalent barrels per day compared with a year ago largely due to lower entitlements, while increases from projects and work programs more than offset the impacts of field decline.
During the quarter, the corporation distributed $3.3 billion in dividends to shareholders.
Second Quarter 2017 Highlights
- Earnings of $3.4 billion increased 97 percent from the second quarter of 2016.
- Earnings per share assuming dilution were $0.78.
- Cash flow from operations and asset sales was $7.1 billion, including proceeds associated with asset sales of $154 million.
- Capital and exploration expenditures were $3.9 billion, down 24 percent from the second quarter of 2016.
- Oil-equivalent production was 3.9 million oil-equivalent 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 $3.3 billion in dividends to shareholders.
- Dividends per share of $0.77 increased 2.7 percent compared to the second quarter of 2016.
- The company made a final investment decision to proceed with the first phase of the Liza field development located offshore Guyana. Production is expected to begin by 2020, less than five years after discovery of the field, from a floating production, storage, and offloading vessel designed to produce up to 120,000 barrels of oil per day.
- The Liza-4 well encountered more than 197 feet (60 meters) of high-quality, oil-bearing sandstone reservoirs, which will underpin a potential Liza Phase 2 development. In July, the company also announced positive results from the Payara-2 well, which encountered 59 feet (18 meters) of high-quality, oil-bearing sandstone reservoirs. Gross recoverable resources for the Stabroek block are now estimated at 2.25 billion to 2.75 billion oil-equivalent barrels, which includes Liza and discoveries at Payara and Snoek.
- ExxonMobil announced positive results for the Muruk-1 sidetrack 3 well in Papua New Guinea, located about 13 miles (21 kilometers) northwest of Hides gas field. The Muruk-1 sidetrack well was safely drilled to 13,550 feet (4,130 meters) and encountered high-quality sandstone reservoirs southwest of the Muruk-1 natural gas discovery. During a subsequent production test the well successfully flowed gas and condensate at an equipment constrained rate of 16 million standard cubic feet per day.
- The company spud its first well on the recently acquired Delaware Basin acreage, drilling a 12,500 foot (3,810 meters) lateral section. ExxonMobil continues to expand midstream capabilities in the basin through strategic partnerships such as the recently signed agreement with Summit Midstream Partners, LP.
- The company safely towed the Hebron platform from the Bull Arm construction site in Newfoundland and Labrador, Canada, to the Hebron field in the Jeanne d’Arc Basin, located about 220 miles (350 kilometers) offshore. The Hebron field is anticipated to produce 150,000 barrels of oil per day from a recoverable resource of 700 million barrels. Commissioning work is underway, with first oil anticipated before the end of 2017.
- The company reached an agreement with Jurong Aromatics Corporation Pte Ltd to acquire one of the world’s largest aromatics plants located on Jurong Island in Singapore. The plant, with annual production capacity of 1.4 million metric tons, will strengthen both operational and logistical synergies for ExxonMobil’s integrated refining and petrochemical complex nearby.
- ExxonMobil and SABIC announced the selection of a site in San Patricio County, Texas, for potential development of a jointly owned petrochemical complex on the U.S. Gulf Coast. The proposed multibillion dollar investment would include a world-scale ethane steam cracker capable of producing 1.8 million metric tons of ethylene per year, which would feed a monoethylene glycol unit and two polyethylene units.
- ExxonMobil announced the mechanical completion of two new 650,000 metric tons per year high performance polyethylene lines at its plastics plant in Mont Belvieu, Texas. The company expects production to begin during the third quarter of 2017. This project enables ExxonMobil to economically supply a rapidly growing demand for high-value polyethylene products.
- ExxonMobil announced the completion of an expansion in Singapore to increase production of grease and synthetic lubricants, including Mobil 1, the company’s flagship synthetic engine oil. This expansion further strengthens the company’s manufacturing capabilities and its ability to meet the growing demand for grease and synthetic lubricants products in the Asia Pacific region.
- ExxonMobil announced plans to enter the Mexican fuels market in 2017 with Mobil-branded stations and its new signature line of advanced Synergy gasoline and diesel fuels. The company plans to invest about $300 million in fuels logistics, product inventories and marketing over the next 10 years.
- ExxonMobil and Synthetic Genomics, Inc. announced a breakthrough in research into advanced biofuels involving the modification of an algae strain that more than doubled its oil content without significantly inhibiting the strain’s growth. Additional research and extensive testing are required before commercial application.
Second Quarter 2017 vs. Second Quarter 2016
Upstream earnings were $1.2 billion in the second quarter of 2017, up $890 million from the second quarter of 2016. Higher liquids and gas realizations increased earnings by $890 million. Lower liquids volume and mix effects decreased earnings by $260 million due to lower sales from timing of liftings. Higher gas volumes and mix effects increased earnings by $120 million. All other items, including lower expenses, increased earnings by $140 million.
On an oil-equivalent basis, production decreased 1 percent from the second quarter of 2016. Liquids production totaled 2.3 million barrels per day, down 61,000 barrels per day as field decline and lower entitlements were partly offset by increased project volumes and work programs. Natural gas production was 9.9 billion cubic feet per day, up 158 million cubic feet per day from 2016 as project ramp-up, primarily in Australia, was partly offset by field decline and lower demand.
U.S. Upstream results were a loss of $183 million in the second quarter of 2017, compared to a loss of $514 million in the second quarter of 2016. Non-U.S. Upstream earnings were $1.4 billion, up $559 million from the prior year period.
Downstream earnings were $1.4 billion, up $560 million from the second quarter of 2016. Higher margins increased earnings by $220 million, while favorable volume and mix effects increased earnings by $90 million. All other items increased earnings by $250 million, including asset management gains, favorable foreign exchange impacts, and lower turnaround expenses. Petroleum product sales of 5.6 million barrels per day were 58,000 barrels per day higher than last year’s second quarter.
Earnings from the U.S. Downstream were $347 million, down $65 million from the second quarter of 2016. Non-U.S. Downstream earnings of $1 billion were $625 million higher than prior year.
Chemical earnings of $985 million were $232 million lower than the second quarter of 2016. Weaker margins decreased earnings by $40 million. Volume and mix effects decreased earnings by $50 million. All other items decreased earnings by $140 million primarily due to higher turnaround expenses. Second quarter prime product sales of 6.1 million metric tons were 190,000 metric tons lower than the prior year.
U.S. Chemical earnings of $481 million were $28 million lower than the second quarter of 2016. Non-U.S. Chemical earnings of $504 million were $204 million lower than prior year.
Corporate and financing expenses were $204 million for the second quarter of 2017, down $432 million from the second quarter of 2016 mainly due to favorable tax items.
First Half 2017 Highlights
- Earnings of $7.4 billion increased 110 percent from $3.5 billion in 2016.
- Earnings per share assuming dilution were $1.73.
- Cash flow from operations and asset sales was $16 billion, including proceeds associated with asset sales of $841 million.
- Capital and exploration expenditures were $8.1 billion, down 21 percent from 2016.
- Oil-equivalent production was 4 million oil-equivalent barrels per day, down 3 percent from the prior year. Excluding entitlement effects and divestments, oil-equivalent production was flat with the prior year.
- The corporation distributed $6.4 billion in dividends to shareholders.
First Half 2017 vs. First Half 2016
Upstream earnings were $3.4 billion, up $3.2 billion from the first half of 2016. Higher realizations increased earnings by $3.2 billion. Unfavorable volume and mix effects decreased earnings by $320 million. All other items increased earnings by $310 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 3 percent compared to 2016. Liquids production of 2.3 million barrels per day decreased 133,000 barrels per day as lower entitlements and field decline were partly offset by increased project volumes and work programs. Natural gas production of 10.4 billion cubic feet per day increased 168 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 $201 million in 2017, compared to a loss of $1.3 billion in 2016. Earnings outside the U.S. were $3.6 billion, up $2.1 billion from the prior year.
Downstream earnings of $2.5 billion increased $770 million from 2016. Stronger refining and marketing margins increased earnings by $230 million, while volume and mix effects increased earnings by $260 million. All other items increased earnings by $280 million, mainly reflecting asset management gains and lower maintenance expense. Petroleum product sales of 5.5 million barrels per day were 60,000 barrels per day higher than 2016.
U.S. Downstream earnings were $639 million, an increase of $40 million from 2016. Non-U.S. Downstream earnings were $1.9 billion, up $730 million from the prior year.
Chemical earnings of $2.2 billion decreased $416 million from 2016. Weaker margins decreased earnings by $110 million. Volume and mix effects decreased earnings by $60 million. All other items decreased earnings by $250 million, primarily due to higher turnaround expenses and unfavorable foreign exchange effects. Prime product sales of 12.2 million metric tons were down 291,000 metric tons from the first half of 2016.
U.S. Chemical earnings were $1 billion, down $80 million from 2016. Non-U.S. Chemical earnings of $1.1 billion were $336 million lower than prior year.
Corporate and financing expenses were $733 million in 2017 compared to $1 billion in 2016, with the decrease mainly due to net favorable tax-related items.
During the first half 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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U.S. EIA - Energy companies’ free cash flow—the difference between cash from operations and capital expenditure—was $119 billion for the four quarters ending June 30, 2018, the largest four-quarter sum during 2013–18 Companies reduced debt for seven consecutive quarters, contributing to the lowest long-term debt-to-equity ratio since third-quarter 2014
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PLATTS - The International Energy Agency expects the US to account for 75% of the global growth in natural gas exports over the next five years, a bullish outlook for LNG developers facing challenges at home getting projects off the ground and abroad with tariffs affecting trade flows.