EXXONMOBIL on Friday (Jan 31) beat Wall Street’s estimate for fourth-quarter profit as higher oil and gas production offset lower oil prices and weaker refining margins.
Its profit was US$7.39 billion or US$1.67 per share, beating analyst estimates of US$1.56, LSEG data showed.
Exxon’s low production costs in the basin and its lucrative and prolific projects in Guyana have bolstered the company’s profits despite lower oil prices and a decline in profits on making fuel.
The No 1 US oil producer reported earnings of US$33.46 billion for 2024, down from US$38.57 billion the year earlier. Exxon shares were unchanged in trading before the bell on Friday.
The company became the largest oil producer in the Permian basin in 2024, the biggest US oilfield, after closing its acquisition of Pioneer Natural Resources in May.
Its fourth-quarter adjusted earnings from oil and gas production was US$6.28 billion, up from US$4.15 billion in the same quarter last year. Production reached 4.6 million barrels of oil equivalent per day.
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Earnings from producing petrol and diesel was US$323 million, down from US$3.2 billion a year earlier. Exxon signalled earlier this month that sharply lower oil refining margins would cut earnings by between US$300 million and US$700 million compared to the third quarter.
The startup of new oil refineries by other companies in Asia and Africa led to higher global fuel supply, even as demand for petrol and diesel lagged expectations.
The refining business remains under pressure as the additional supply enters the market, chief financial officer Kathryn Mikells said in an interview.
“That’s really what we’re watching as we look ahead to 2025,” she said.
The company said impairments across the business cost US$608 million in the fourth quarter. The charges come from selling assets, including a joint venture in Nigeria, Mikells said.
Exxon continues to expect a decision by September in its arbitration challenge to Chevron’s acquisition of oil producer Hess, she said. If Chevron proceeds, it would gain a foothold in Guyana’s oil projects.
While the deal has been approved by US regulators, Exxon and China’s Cnooc, which are Hess’ partners in the Guyana oil joint venture, say they have a contractual first right to buy Hess’ stake.
Shareholder returns via buybacks and dividends totalled US$36 billion in 2024, up from US$32 billion.
The shareholder distributions, a cornerstone of Big Oil’s strategy to court investors, were covered by Exxon’s free cash flow of US$36.2 billion. REUTERS
