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ExxonMobil announces 1Q20 results

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Oilfield Technology,

ExxonMobil has announced an estimated 1Q20 loss of US$610 million, or US$0.14 per share assuming dilution, compared with earnings of US$2.4 billion a year earlier.

Results included a US$2.9 billion charge from identified items, or US$0.67 per share assuming dilution, reflecting noncash inventory valuation impacts from lower commodity prices and asset impairments. Cash flow from operating activities was US$6.3 billion. Capital and exploration expenditures were US$7.1 billion. Oil-equivalent production was 4 million bpd, up 2% from 1Q19, with a 7% increase in liquids partly offset by a 5% decrease in gas. Excluding entitlement effects and divestments, oil-equivalent production was up 5% from the prior year, with upstream liquids production up 9% on growth in the Permian and Guyana.

In response to market conditions, ExxonMobil announced that it is reducing 2020 CAPEX by 30% and cash operating expenses by 15%. CAPEX is now expected to be approximately US$23 billion for the year, down from the previously announced guidance of US$33 billion.

“Covid-19 has significantly impacted near-term demand, resulting in oversupplied markets and unprecedented pressure on commodity prices and margins,” said Darren W. Woods, chairman and CEO.“While we manage through these challenging times, we are not losing sight of the long-term fundamentals that drive our business. Economic activity will return, and populations and standards of living will increase, which will in turn drive demand for our products and a recovery of the industry.” ExxonMobil’s capital allocation priorities remain unchanged. The company’s objective is to continue investing in industry-advantaged projects to create value, preserve cash for the dividend, and make appropriate use of its balance sheet.

“Our company remains strong and we will manage through the current market downturn as we have for decades,” said Woods. “Today’s circumstances are certainly unique, but our people have the experience, our business has the scale, and we have the financial strength to see us through and emerge stronger than ever.”

1Q20 business highlights

  • Crude prices weakened significantly during the quarter, reflecting an unprecedented combination of oversupply and the impacts of Covid-19 on global demand.
  • Natural gas prices were lower compared to the fourth quarter, reflecting reduced demand due to mild seasonal weather and Covid-19.
  • Total production volumes were essentially unchanged from the fourth quarter. Excluding entitlement effects and divestments, both liquids and gas volumes increased 5% on growth and lower scheduled maintenance. Production in Guyana at the Liza Phase 1 development continues to ramp up, while the first oil shipment was successfully processed at the company’s refinery in Baytown, Texas. Permian production grew 20% from the fourth quarter, and was up 56% from the first quarter of 2019.
  • ExxonMobil made an additional discovery offshore Guyana at the Uaru well during the first quarter, marking its 16th discovery on the Stabroek Block and adding to the previously announced estimated recoverable resource in Guyana of more than 8 billion oil-equivalent bbl. Production from the Liza Phase 1 development continues to ramp up and will reach up to 120 000 gross bpd, utilising the Liza Destiny FPSO. The Liza Unity FPSO, which will be employed for the second phase of Liza development and will have a gross production capacity of 220 000 bpd, is under construction and expected to start production in 2022. Pending government approvals and project sanctioning of a third development, production from the Payara field north of the Liza discoveries will increase gross production by an additional 220 000 bpd.

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