BREAKING NEWS, Oil & Gas
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ExxonMobil announces estimated earnings of $1.7 billion for the second quarter of 2016 as liquids production growth from recent start-ups more than offset the impact of field decline and downtime events, notably in Canada and Nigeria
| By Anayo Ezugwu | Aug 15, 2016 @ 01:00 GMT |
ExxonMobil Corporation has released the second quarter 2016 report of the company announcing an estimated earnings of $1.7 billion, or $0.41 per diluted share, compared with $4.2 billion a year earlier. The results reflect sharply lower commodity prices, weaker refining margins and continued strength in the chemical segment.
Rex W. Tillerson, chairman and chief executive officer of the company, said, “While our financial results reflect a volatile industry environment, ExxonMobil remains focused on business fundamentals, cost discipline and advancing selective new investments across the value chain to extend our competitive advantage. The corporation benefits from scale and integration, which provide the financial flexibility to invest in attractive opportunities and grow long-term shareholder value.”
During the second quarter, upstream earnings were $294 million. Production volumes were essentially unchanged at 4 million oil-equivalent barrels per day. Liquids production growth from recent start-ups more than offset the impact of field decline and downtime events, notably in Canada and Nigeria.
Chemical earnings remained strong at $1.2 billion, reflecting continued benefits from gas and liquids cracking as well as growing product demand. The downstream segment earned $825 million despite significantly lower global refining margins versus the prior year quarter. Capital and exploration expenses were reduced by 38 percent to $5.2 billion. During the quarter, the corporation distributed $3.1 billion in dividends to shareholders.
The highlights of the second quarter 2016 show dividends per share of $0.75 increased 2.7 percent compared with the second quarter of 2015. ExxonMobil announced that drilling results from Liza-2, the second well in the Stabroek block offshore Guyana, confirmed a world-class discovery with a recoverable resource between 800 million and 1.4 billion oil-equivalent barrels.
Production at the Julia Oil Field in the Gulf of Mexico started ahead of schedule with project costs under budget. The initial development phase, with a gross design capacity of 34,000 barrels of oil per day, uses capital-efficient subsea tie-backs to existing infrastructure and is located 265 miles southwest of New Orleans in water depths of more than 7,000 feet.
The company started production at Point Thomson, the first company-operated project on Alaska’s North Slope. At full rate production, the facility is designed to produce up to 10,000 barrels of natural gas condensate per day and 200 million cubic feet of recycled gas. The recycled gas is re-injected for future recovery.
The Taicang, China, lubricants plant expansion was completed in April, doubling the capacity of the facility. The expansion includes the addition of automated blending technology and a new state-of-the-art quality assurance laboratory. It improves the company’s ability to supply premium lubricant products to meet long-term demand growth in China.
ExxonMobil is expanding its comprehensive slate of polyethylene products with the introduction of Exceed XP performance polymers. Developed through advanced catalyst technology, process research, and applications expertise, Exceed XP is designed to provide extreme performance in a variety of film applications.
The second quarter 2016 report in comparison with the second quarter 2015 report showed that the upstream earnings were $294 million in the second quarter of 2016, down $1.7 billion from the second quarter of 2015. Lower liquids and gas realisations decreased earnings by $2.2 billion, while volume and mix effects increased earnings by $50 million.
All other items, including lower expenses, the absence of a one-time deferred income tax impact related to the tax rate increase in Alberta, Canada, and favourable foreign exchange effects increased earnings by $450 million. On an oil-equivalent basis, production was essentially flat with the second quarter of 2015.
Liquids production totalled 2.3 million barrels per day, up 39,000 barrels per day. Project ramp-up was partly offset by field decline and downtime mainly resulting from the Canadian wildfires. Natural gas production was 9.8 billion cubic feet per day, down 366 million cubic feet per day from 2015 including field decline and divestment impacts.
U.S. Upstream earnings declined $467 million from the second quarter of 2015 to a loss of $514 million in the second quarter of 2016. Non-U.S. Upstream earnings were $808 million, down $1.3 billion from the prior year.
Downstream earnings were $825 million, down $681 million from the second quarter of 2015. Weaker refining margins decreased earnings by $850 million while favourable volume and mix effects increased earnings by $130 million. All other items increased earnings by $40 million, including lower maintenance expenses partly offset by unfavourable foreign exchange effects.
Petroleum product sales of 5.5 million barrels per day were 237,000 barrels per day lower than the prior year due in part to asset management activity. Earnings from the U.S. Downstream were $412 million, flat with the second quarter of 2015. Non-U.S. Downstream earnings of $413 million were $681 million lower than last year.
Chemical earnings of $1.2 billion were $29 million lower than the second quarter of 2015. Margins increased earnings by $150 million. Volume and mix effects increased earnings by $70 million. All other items decreased earnings by $250 million, due to the absence of asset management gains in the U.S. partly offset by lower expenses. Second quarter prime product sales of 6.3 million metric tons were 232,000 metric tons higher than the prior year’s second quarter.
U.S. Chemical earnings were $509 million, down $226 million from the second quarter of 2015 reflecting the absence of asset management gains. Non-U.S. Chemical earnings of $708 million were $197 million higher than last year. Corporate and financing expenses were $636 million for the second quarter of 2016, compared to $593 million in the second quarter of 2015.
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