Exxon Mobil Corporation announced estimated first quarter 2015 earnings of US$4.9 billion, or US$1.17 per diluted share, compared with US$9.1 billion a year earlier, demonstrating the value of the company’s integrated businesses in a lower commodity price environment.
“ExxonMobil’s balanced portfolio delivered solid financial results in the quarter,” said Rex W. Tillerson, Chairman and CEO. “Regardless of current market conditions, we remain focused on business fundamentals and competitive advantages that create longterm shareholder value.”
During the quarter, ExxonMobil produced 4.2 million boe/d, an increase of 97 000 bpd over the first quarter of 2014. Volumes were up 2.3%, benefiting from new developments in Papua New Guinea, Canada, Angola, Indonesia, and US onshore liquids plays. Field decline and maintenance impacts were mostly offset by higher entitlement volumes.
Downstream and Chemical segment earnings were strong across all regions, driven by lower feedstock costs, improved demand, and the company’s competitive product and asset mix. During the quarter, the corporation distributed US$3.9 billion to shareholders in the form of dividends and share purchases to reduce shares outstanding.
First quarter highlights
- Earnings of US$4.9 billion decreased 46% from the first quarter of 2014.
- Earnings per share were US$1.17 assuming dilution, a decrease of 44%.
- Capital and exploration expenditures were US$7.7 billion, down 9% from the first quarter of 2014, in line with plan.
- Oil equivalent production increased 2.3% from the first quarter of 2014, with liquids up 6% and gas down 1.6%.
- Cash flow from operations and asset sales was US$8.5 billion, including proceeds associated with asset sales of US$484 million.
- The corporation distributed US$3.9 billion to shareholders in the first quarter of 2015, including US$1 billion in share purchases to reduce shares outstanding.
- Dividends per share of US$0.69 increased 9.5% compared with the first quarter of 2014.
- Production started at the Sakhalin-1 project’s Arkutun-Dagi field, the last of the three fields to be developed. Peak daily gross production from the field is expected to reach 90 000 bbls and will bring total daily production at Sakhalin-1 to more than 200 000 bbls.
- Production started at Hadrian South in the Gulf of Mexico with ExxonMobil’s deepest subsea tie back. Daily gross production is expected to reach approximately 300 million ft3 of gas and 3000 bbls of liquids from two wells.
- Oil production started ahead of schedule at the Kizomba Satellites Phase 2 project offshore Angola. This capital efficient project utilises subsea tie backs to optimise existing Block 15 facilities, increasing current production levels without requiring additional floating production, storage and offloading vessels. The project develops approximately 190 million bbls of oil with peak production currently estimated at 70 000 gross bpd of oil. The project is expected to increase total daily Block 15 production to 350 000 bbls.
- Construction of an 84 MW cogeneration plant is underway at the Singapore refinery, which will improve the energy efficiency of the site upon completion. The project will enable the shutdown of less efficient power generation facilities and reduce carbon dioxide emissions. This project underscores ExxonMobil’s commitment to improving energy efficiency, lowering emissions, and reducing costs.
- Drilling resumed at Point Thomson on Alaska’s North Slope as construction continues toward bringing the initial production systems, designed to produce up to 10 000 gross bpd of natural gas condensate, online in 2016. The initial production will provide reservoir development insights and economic benefits to Alaskans.
Upstream earnings were US$2.9 billion in the first quarter of 2015, down US$4.9 billion from the first quarter of 2014. Lower liquids and gas realizations decreased earnings by US$5.5 billion. Higher volumes and mix effects increased earnings by US$340 million, reflecting growth from new developments. All other items, including favourable tax effects, increased earnings by US$250 million.
On an oil equivalent basis, production increased 2.3% from the first quarter of 2014. Liquids production totalled 2.3 million bpd, up 129 000 bpd, while natural gas production was 11.8 billion ft3/d, down 188 million ft3/d from 2014. Project ramp up and entitlement effects were partly offset by field decline and maintenance activities.
The US Upstream operations recorded a loss of US$52 million, down US$1.3 billion from the first quarter of 2014. Non-US Upstream earnings were US$2.9 billion, down US$3.6 billion from the prior year.
Downstream earnings were US$1.7 billion, up US$854 million from the first quarter of 2014. Stronger margins increased earnings by US$1 billion. Volume and mix effects increased earnings by US$70 million. All other items, primarily higher maintenance expense, decreased earnings by US$260 million. Petroleum product sales of 5.8 million bpd were flat with the prior year’s first quarter.
Earnings from the US Downstream were US$567 million, down US$56 million from the first quarter of 2014. Non-US Downstream earnings of US$1.1 billion were US$910 million higher than last year.
Chemical earnings of US$982 million were US$65 million lower than the first quarter of 2014. Improved margins increased earnings by US$240 million. Favourable volume mix effects increased earnings by US$30 million. All other items, primarily unfavourable foreign exchange effects, decreased earnings by US$340 million. First quarter prime product sales of 6.1 million t were 59 000 t lower than last year's first quarter.
Adapted from press release by Rosalie Starling