Exxon beats estimates, ends 2023 with a $36 billion profit
02/02/2024 11:31
By Sabrina Valle
HOUSTON, Feb 2 (Reuters) - Exxon Mobil XOM.N on Friday
posted a better-than-expected $36 billion profit for 2023,
lifted by fuels trading and higher oil and gas production.
Oil majors are expected to report 2023 profits down by about
a third from record levels in 2022, as oil and gas prices
retreated from the peaks that followed Russia's invasion of
Ukraine.
Exxon results included a $2.5 billion impairment charge for
California properties that it has been trying to sell for more
than a year. Excluding that charge, annual income fell 35% to
$38.57 billion.
Top oil producers are writing off unwanted assets and
cleaning up their balance sheets ahead of pending deals. Chevron
CVX.N has said it would take an about $4 billion impairment in
the fourth quarter, while Shell SHEL.L on Thursday took a $5.5
billion writedown.
Exxon agreed in October to buy rival Pioneer Natural
Resources PXD.N to bolster its U.S. shale oil production in
the Permian Basin, and Chevron proposed to purchase Hess Corp
HES.N to get a foothold in Guyana. Both deals are expected to
close mid-year.
TRADING BLOOMS
Brent crude futures in the fourth quarter averaged $82.85 a
barrel, a 7% decrease compared to the same period last year and
a 4% decline from the third quarter.
For the fourth quarter, Exxon reported a
better-than-expected profit of $9.96 billion, or $2.48 per
share, compared to $14.04 billion, or $3.40 per share, a year
earlier.
The results were driven by higher trading profits in its
fuels business and increased oil and gas production in the U.S.
and Guyana, Chief Financial Officer Kathryn Mikells told
Reuters.
Fourth-quarter results were helped by Exxon's trading
division, which delivered a $1.1 billion boost to operating
profit from its fuels business.
"That is definitely something that we would expect to see on
an ongoing basis embedded in our results," Mikells said. Gains
came from revising how its specifies and moves fuels, she added.
Guyana and the Permian Basin pushed up capital spending in
the quarter by 4% over a year ago, and put full-year project
spending at $26.32 billion.
Exxon distributed $32 billion to shareholders via buybacks
and dividends last year, up from $29.8 billion a year earlier.
The largest U.S. producer also said it planned $23 billion
to $25 billion in capital spending this year to prepares for
2025 projects.
(Reporting by Sabrina Valle; Editing by Gary McWilliams and
Jamie Freed)
((sabrina.valle@tr.com; Twitter: @sabrinavalle;))