ExxonMobil Corporation earns $6.2 billion in the third quarter of 2018 and distributes $3.5 billion in dividends to shareholders

By Anayo Ezugwu

ExxonMobil Corporation has announced an estimated third quarter 2018 earnings of $6.2 billion, or $1.46 per share assuming dilution, compared with $4 billion a year earlier. Cash flow from operations and asset sales was $12.6 billion, including proceeds associated with asset sales of $1.5 billion.

During the quarter, the company distributed $3.5 billion in dividends to shareholders. Capital and exploration expenditures were $6.6 billion, up 10 percent from the prior year. Oil-equivalent production was 3.8 million barrels per day, down two percent from the third quarter of 2017.

Excluding entitlement effects and divestments, liquids production increased six percent, as growth in North America more than offset decline and higher downtime. Natural gas volumes decreased four percent, excluding entitlement effects and divestments, largely due to a continuing near-term shift in US unconventional development from dry gas to liquids.

Darren W. Woods, chairman and chief executive officer, ExxonMobil, said the company is seeing the benefits of integration as it capture value from advantaged feedstock from the Permian and Western Canada for North American refineries. “The logistical network we’ve established provides reliable connectivity between upstream production and manufacturing facilities.

“Operational performance improved significantly versus the second quarter with lower levels of scheduled maintenance and reliability levels in line with our expectations. We’re pleased with the increase in production from the second quarter of 2018 recognizing it reflects contributions from just one of our key growth areas, the Permian. We expect to continue to increase volumes over time as we ramp up activity in the Permian and new projects start up,” Woods said.

The highlights of the report showed that crude and natural gas prices strengthened in the third quarter. “Permian unconventional production experienced strong growth in the third quarter, with a ramp-up to 38 rigs currently in the Midland and Delaware basins. Third quarter production strengthened with improved reliability and lower scheduled maintenance. Syncrude operations in Canada were impacted by a power supply disruption that began in late June with recovery by the middle of September. Also in Canada, Kearl net production reached a quarterly record of 230,000 barrels per day.”

The report stated that industry fuels margins strengthened during the quarter in North America and Europe supported by widening crude differentials in North America and tightening supply in Europe. The company leveraged its midstream logistics capacity to connect advantaged crudes from the Permian and Western Canada to its refineries and customers. Overall lower planned maintenance and improved reliability contributed to strong earnings in the quarter.

In the quarter under review, ExxonMobil made its ninth discovery offshore Guyana at the Hammerhead-1 well, marking its fifth discovery on the Stabroek Block in the past year. Hammerhead-1 encountered approximately 197 feet (60 meters) of high-quality, oil-bearing sandstone reservoir.

It also increased its holdings in Brazil’s pre-salt basins after it won the Titã exploration block with co-venturer Qatar Petroleum during Brazil’s fifth pre-salt bid round. The awarded block added more than 71,500 net acres to the ExxonMobil portfolio, expanding its total position in the country to approximately 2.3 million net acres. ExxonMobil will be the operator and own a 64 percent equity interest in the block.

According to the report, ExxonMobil completed the sale of about 1,000 Esso-branded service stations in Germany to EG Group Ltd. on October 1, 2018. The company is converting its retail business to the branded wholesaler model consistent with other markets in Europe and North America, and will continue selling ExxonMobil-supplied SynergyTM fuels and Mobil-branded lubricants at Esso stations throughout the country.

Production also started at the Kaombo project, an offshore development on Angola Block 32, where ExxonMobil has a 15 percent interest. Production will reach an estimated 230,000 barrels per day at its peak, and the associated gas will be delivered to the Angola LNG plant in Soyo.

The report noted that ExxonMobil started a new 1.5 million-metric-ton-per-year ethane cracker at its integrated Baytown, Texas chemical and refining complex. The new cracker, part of ExxonMobil’s growing the Gulf initiative, provides ethylene feedstock to new performance polyethylene lines at the company’s Mont Belvieu plastics plant, which began production in the fall of 2017. The Mont Belvieu plant is one of the largest polyethylene plants in the world, with manufacturing capacity of about 1.3 million metric tons per year.

Likewise, ExxonMobil signed a cooperation framework agreement with the Guangdong Provincial People’s Government in China to advance discussions concerning the proposed construction of a chemical complex in the Huizhou Dayawan Petrochemical Industrial Park. The new facility would help meet expected demand growth for chemical products in China.

The multibillion-dollar project, which remains subject to a final investment decision, would include a 1.2 million-metric-ton-per-year ethylene flexible feed steam cracker, two performance polyethylene lines and two differentiated performance polypropylene lines. Startup is planned for 2023. The framework agreement also confirms Guangdong Province’s support in progressing the Huizhou LNG receiving terminal, in which ExxonMobil intends to participate, including supply of LNG.

“ExxonMobil started a new unit at its integrated Beaumont, Texas facility, increasing production of ultra-low sulfur fuels by about 45,000 barrels per day. The new unit relies on a proprietary catalyst system developed by ExxonMobil to remove sulfur and meet U.S. Environmental Protection Agency specifications while minimizing octane loss.

“ExxonMobil joined the Oil and Gas Climate Initiative (OGCI), a voluntary initiative representing 13 of the world’s largest oil and gas producers working collaboratively toward solutions to mitigate the risks of climate change. As part of the initiative, ExxonMobil will expand its investment in research and development of long-term solutions to reduce greenhouse gas emissions and pursue lower-emission technologies.

“Since 2000, ExxonMobil has spent more than $9 billion on lower-emission energy solutions such as cogeneration, flare reduction, energy efficiency, biofuels, carbon capture and storage and other technologies. Start-up has commenced on a project to expand ExxonMobil’s specialty elastomers plant in Newport, Wales. When completed, the expansion will increase the company’s global capacity to manufacture Santoprene™ thermoplastic vulcanizate, high-performance elastomers used for automotive, industrial and consumer applications, by 25 percent,” the report said.

– Nov. 9, 2018 @ 17:29 GMT |