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ExxonMobil earns US$1.8 billion in 1Q16

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Hydrocarbon Engineering,

Exxon Mobil Corporation has announced an estimated 1Q16 earnings of US$1.8 billion, or US$0.43 per diluted share, compared with US$4.9 billion a year earlier. The impacts of sharply lower commodity prices and weaker refining margins were partly offset by strong chemical results.

“The organisation continues to respond effectively to challenging industry conditions, capturing enhancements to operational performance and creating margin uplift despite low prices,” said Rex W. Tillerson, Chairman and Chief Executive Officer. “The scale and integrated nature of our cash flow provide competitive advantage and support consistent strategy execution.”

The corporation is making steady progress on its investment plans. New project capacity additions drove liquids production up 11.5% in the quarter, or 261 000 bpd. Total upstream volumes increased to 4.3 million oil equivalent bpd, while capital and exploration expenditures were reduced 33% to US$5.1 billion.

Chemical earnings increased 38% to US$1.4 billion on stronger margins and higher sales volumes. The business is capturing increased specialty and commodity product demand along with significant cost benefits from both gas and liquids cracking advantages at our integrated sites. The downstream segment earned US$906 million as global gasoline demand remains relatively strong. During the quarter, the corporation distributed US$3.1 billion in dividends to shareholders.

First quarter highlights

  • Earnings of US$1.8 billion decreased 63% from the 1Q15.
  • Earnings per share were US$0.43 assuming dilution.
  • Cash flow from operations and asset sales was US$5 billion, including proceeds associated with asset sales of US$177 million.
  • Capital and exploration expenditures were US$5.1 billion, down 33% from the 1Q15.
  • Oil equivalent production increased 1.8% from the 1Q15, with liquids up 11.5% and gas down 9.3%.
  • The corporation distributed US$3.1 billion to shareholders in the 1Q16.
  • Dividends per share of US$0.73 increased 5.8% compared with the 1Q15.

1Q16 versus 1Q15

Upstream earnings declined US$2.9 billion from the 1Q15, to a loss of US$76 million. Lower liquids and gas realisations decreased earnings by US$2.6 billion. Sales mix effects decreased earnings by US$100 million. All other items decreased earnings by US$250 million, including lower gains on asset sales and less favourable tax items partly offset by lower expenses.

On an oil equivalent basis, production increased 1.8% from the 1Q15. Liquids production totalled 2.5 million bpd, up 261 000 bpd, while natural gas production was 10.7 billion ft3/d, down 1.1 billion ft3/d from 2015. Project ramp-up was partly offset by regulatory restrictions in the Netherlands, field decline and asset management impacts.The US Upstream operations recorded a loss of US$832 million, compared to a loss of US$52 million in the 1Q15. Non-US Upstream earnings were US$756 million, down US$2.2 billion from the prior year.

Downstream earnings were US$906 million, down US$761 million from the 1Q15. Weaker margins decreased earnings by US$860 million. Volume and mix effects increased earnings by US$10 million. All other items, primarily favourable foreign exchange effects, increased earnings by US$90 million. Petroleum product sales of 5.3 million bpd were 480 000 bpd lower than the prior year’s first quarter.

Earnings from the US Downstream were US$187 million, down US$380 million from the 1Q15. Non-US Downstream earnings of US$719 million were US$381 million lower than last year.

Chemical earnings of US$1.4 billion were US$373 million higher than the 1Q15. Improved margins increased earnings by US$250 million. Favourable volume and mix effects increased earnings by US$80 million. All other items, primarily lower expenses, increased earnings by US$40 million. First quarter prime product sales of 6.2 million t were 104 000 t higher than last year's first quarter.

Corporate and financing expenses were US$375 million for the 1Q16, down US$189 million from the 1Q15 due to favourable tax items.

During the 1Q16, Exxon Mobil Corporation purchased nine million shares of its common stock for the treasury at a gross cost of US$726 million. These shares were acquired to offset dilution in conjunction with the company’s benefit plans and programmes. The corporation will continue to acquire shares to offset dilution in conjunction with its benefit plans and programmes, but does not currently plan on making purchases to reduce shares outstanding.

Adapted from press release by Francesca Brindle

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