Exploration & Production | Quarterly / Earnings Reports | Production | Third Quarter (3Q) Update

ExxonMobil Boosts 3Q Earnings to $8.07B; Oil Production Down

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   |    Friday,October 31,2014

Exxon Mobil Corp. has reported its estimated third quarter 2014 results.

ExxonMobil Chairman Rex W. Tillerson commented: "Earnings in the period rose 3 percent from the third quarter of 2013, driven by higher margins and improved operations in the Downstream and Chemical businesses, partially offset by the impact of lower Upstream realizations.

"ExxonMobil’s quarterly results demonstrate the strength of our integrated business model. Integration across Upstream, Downstream and Chemical gives us competitive advantages in scale, efficiency, technical and commercial capabilities, regardless of market fluctuations over the business cycle.

"The Corporation’s cash flow from operations and asset sales through the first nine months of 2014 fully covered net investments and shareholder distributions.

"We continue to meet our operational and project development objectives. Upstream production for 2014 remains on track with previous full-year estimates of 4 million oil-equivalent barrels per day as the company adds new production from project startups."

Third Quarter Highlights:

• Earnings of $8,070 million increased $200 million or 3 percent from the third quarter of 2013.
• Earnings per share (assuming dilution) were $1.89, an increase of 6 percent.
• Capital and exploration expenditures were $9.8 billion, down 7 percent from the third quarter of 2013.
• Oil-equivalent production decreased 4.7 percent from the third quarter of 2013. Excluding the impact of the expiry of the Abu Dhabi onshore concession, production decreased 1 percent, with liquids up 0.6 percent and gas down 2.9 percent.
• Cash flow from operations and asset sales was $12.5 billion, including proceeds associated with asset sales of $0.1 billion.
• The Corporation distributed $5.9 billion to shareholders in the third quarter of 2014, including $3 billion in share purchases to reduce shares outstanding.
• Dividends per share of $0.69 increased 9.5 percent compared with the third quarter of 2013.
• ExxonMobil entered into a second nonmonetary exchange agreement with LINN Energy, LLC to add 17,800 net acres in the Permian Basin to its U.S. oil and natural gas portfolio, managed by its subsidiary XTO Energy, Inc. This agreement, coupled with the first nonmonetary exchange that closed during the quarter, extends XTO’s leasehold position across the entire Permian Basin to more than 1.5 million acres and net oil-equivalent production to more than 95,000 barrels per day.
• ExxonMobil announced the startup of the Tapis enhanced oil recovery (EOR) project, which is Malaysia’s first large-scale enhanced oil recovery project and will utilize the immiscible water-alternating-gas process to increase overall field recovery. The project exemplifies ExxonMobil's leadership in technology application and global project execution to maximize reserves recovery from producing fields.

3Q 2014 vs. 3Q 2013

Upstream earnings were $6,416 million in the third quarter of 2014, down $297 million from the third quarter of 2013. Lower realizations decreased earnings by $670 million. Favorable volume mix effects increased earnings by $340 million. All other items increased earnings by $30 million.

On an oil-equivalent basis, production decreased 4.7 percent from the third quarter of 2013. Excluding the impact of the expiry of the Abu Dhabi onshore concession, production decreased 1 percent.

Liquids production totaled 2,065 kbd (thousands of barrels per day), down 134 kbd from the third quarter of 2013. The Abu Dhabi onshore concession expiry reduced volumes by 148 kbd. Excluding this impact, liquids production was up slightly as project ramp-up and work programs more than offset field decline, divestment impacts and higher downtime.

Third quarter natural gas production was 10,595 mcfd (millions of cubic feet per day), down 319 mcfd from 2013. Field decline and lower entitlement volumes were partly offset by new production from Papua New Guinea and work programs.

Earnings from U.S. Upstream operations were $1,257 million, $207 million higher than the third quarter of 2013. Non-U.S. Upstream earnings were $5,159 million, down $504 million from the prior year.

Downstream earnings were $1,024 million, up $432 million from the third quarter of 2013. Stronger margins, primarily refining, increased earnings by $820 million. Volume and mix effects increased earnings by $100 million. All other items, primarily foreign exchange impacts, decreased earnings by $490 million. Petroleum product sales of 5,999 kbd were 32 kbd lower than last year's third quarter.

Earnings from the U.S. Downstream were $460 million, up $145 million from the third quarter of 2013. Non-U.S. Downstream earnings of $564 million were $287 million higher than last year.

Chemical earnings of $1,200 million were $175 million higher than the third quarter of 2013. Margins increased earnings by $210 million, with improved commodities realizations partly offset by weaker specialties. Volume and mix effects increased earnings by $10 million. All other items decreased earnings by $40 million. Third quarter prime product sales of 6,249 kt (thousands of metric tons) were essentially flat with last year's third quarter.

Corporate and financing expenses were $570 million for the third quarter of 2014, up $110 million from the third quarter of 2013.

During the third quarter of 2014, Exxon Mobil Corporation purchased 30 million shares of its common stock for the treasury to reduce the number of shares outstanding at a cost of $3 billion. Share purchases to reduce shares outstanding are currently anticipated to equal $3 billion in the fourth quarter of 2014. Purchases may be made in both the open market and through negotiated transactions, and may be increased, decreased, or discontinued at any time without prior notice.

First Nine Months 2014 vs. First Nine Months 2013

First Nine Month Highlights:

• Earnings were $25,950 million, up $1,720 million, or 7 percent from the first nine months of 2013.
• Earnings per share increased 11 percent to $6.04.
• Capital and exploration expenditures were $28.1 billion, down 14 percent from the first nine months of 2013.
• Oil-equivalent production decreased 5.3 percent from 2013. Excluding the impact of the expiry of the Abu Dhabi onshore concession, production decreased 2 percent.
• Upstream per-barrel profitability, excluding noncontrolling interest volumes, increased 17 percent to $21.03 from full year 2013.
• Cash flow from operations and asset sales was $41.5 billion, including proceeds associated with asset sales of $3.8 billion, fully covering net investments and shareholder distributions.
• The Corporation distributed $17.6 billion to shareholders in the first nine months of 2014 through dividends and share purchases to reduce shares outstanding.

Earnings of $25,950 million increased $1,720 million from 2013. Earnings per share increased 11 percent to $6.04.

Upstream earnings were $22,080 million, up $2,025 million from the first nine months of 2013. Lower prices and volumes were more than offset by favorable mix effects, increasing earnings by a net $470 million. All other items, primarily asset sales, increased earnings by $1.6 billion.

On an oil-equivalent basis, production was down 5.3 percent compared to the same period in 2013. Excluding the impact of the expiry of the Abu Dhabi onshore concession, production decreased 2 percent.

Liquids production of 2,087 kbd decreased 105 kbd compared to 2013. The Abu Dhabi onshore concession expiry reduced volumes by 137 kbd. Excluding this impact, liquids production was up 1.5 percent, driven by project ramp-up and work programs.

Natural gas production of 11,115 mcfd decreased 703 mcfd from 2013, as expected U.S. field decline and lower European demand were partially offset by project ramp-up and work programs.

Earnings from U.S. Upstream operations were $3,694 million, up $689 million from 2013. Earnings outside the U.S. were $18,386 million, up $1,336 million from the prior year.

Downstream earnings of $2,548 million increased $15 million from 2013. Lower margins, mainly refining, decreased earnings by $280 million. Volume and mix effects increased earnings by $460 million. All other items, primarily unfavorable foreign exchange and tax impacts, partially offset by lower operating expenses, decreased earnings by $160 million. Petroleum product sales of 5,886 kbd increased 35 kbd from 2013.

U.S. Downstream earnings were $1,619 million, up $17 million from 2013. Non-U.S. Downstream earnings were $929 million, a decrease of $2 million from the prior year.

Chemical earnings of $3,088 million increased $170 million from 2013. Higher margins increased earnings by $20 million, while volume and mix effects increased earnings by $140 million. All other items increased earnings by $10 million. Prime product sales of 18,516 kt were up 530 kt from 2013, driven by increased Singapore production.

Corporate and financing expenses were $1,766 million in the first nine months of 2014, up $490 million from 2013, primarily due to unfavorable tax impacts.

Gross share purchases for the first nine months of 2014 were $9.9 billion, reducing shares outstanding by 100 million shares.