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Exxon Mobil First Quarter 2023 Results

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   |    Monday,May 01,2023

Exxon Mobil Corp. announced its first quarter 2023 results.

Highlights:

  • Delivered record first quarter earnings of $11.4 billion, demonstrating structural earnings improvements through growth of advantaged assets, mix improvements, and cost and execution efficiencies
  • Increased oil and gas net production by nearly 300,000 oil-equivalent barrels per day versus first-quarter 2022, excluding divestments, entitlements, and Sakhalin-1 expropriation
  • Started up the Beaumont Refinery expansion and reached full capacity of 250,000 barrels of production per day to help meet global demand
  • Announced final investment decision for the Uaru offshore development and two new discoveries in Guyana
  • Grew Low Carbon Solutions business with the execution of a new long-term customer contract for carbon capture, transportation, and storage

Exxon's first-quarter 2023 earnings of $11.4 billion, or $2.79 per share assuming dilution. Results included unfavorable identified items of approximately $200 million associated with additional European taxes on the energy sector. Capital and exploration expenditures were $6.4 billion, on track to meet the company's full year guidance of $23 billion to $25 billion.

Darren Woods, chairman and chief executive officer, said: "Our people's hard work to execute on our strategic priorities delivered a record first quarter following a record year.

"We are growing value by increasing production from our advantaged assets to meet global demand. At the same time, our Low Carbon Solutions team is rapidly growing this new business with an additional carbon capture, transportation and storage agreement that underscores the company's growing momentum in providing industrial customers with large-scale emission reduction solutions."

Financial Highlights

  • First-quarter 2023 earnings were $11.4 billion compared with $12.8 billion in the fourth quarter of 2022. Excluding the identified item associated with additional European taxes on the energy sector, earnings were $11.6 billion compared to $14.0 billion in the prior quarter. Identified items in the fourth quarter included a higher impact from the additional European taxes on the energy sector, asset impairments, and one-time adjustments related to the Sakhalin-1 expropriation.
  • Lower liquids and natural gas realizations coupled with the absence of favorable mark-to-market impacts on unsettled derivatives, fewer days in the quarter, and higher scheduled maintenance negatively impacted results sequentially. These impacts were partially offset by higher volumes, mix improvements driven by advantaged project growth, strong operating execution, and disciplined cost management. Results also benefited from the absence of year-end inventory effects and lower corporate and financing costs.
  • The company remains on track to deliver $9 billion of structural cost savings by the end of 2023 relative to 2019, having achieved cumulative structural cost savings of $7.2 billion to date.
  • Cash flow from operations totaled $16.3 billion, and free cash flow was $11.4 billion for the quarter. The company's debt-to-capital ratio remained at 17% and the net-debt-to-capital ratio declined to about 4%, reflecting a period-end cash balance of $32.7 billion.

Shareholder Distributions

  • Shareholder distributions of $8.1 billion included $4.3 billion of share repurchases, keeping the company on track to repurchase up to $17.5 billion during the year.
  • The Corporation declared a second-quarter dividend of $0.91 per share, payable on June 9, 2023, to shareholders of record of Common Stock at the close of business on May 16, 2023.

Reducing Emissions

  • The company announced as of year-end 2022, it had reduced greenhouse gas emissions intensity of its operated assets by more than 10% and methane intensity by more than 50% relative to a 2016 baseline1.

Carbon Capture and Storage2

  • ExxonMobil and Linde, one of the world's leading global industrial gases and engineering companies, have entered into a long-term commercial agreement in which ExxonMobil, subject to government permitting, will capture, transport, and permanently store up to 2.2 million metric tons of carbon dioxide (CO2) each year from Linde's new clean hydrogen production facility in Beaumont, Texas, with operations starting as soon as 2025.

1 Scope 1 and 2 greenhouse gas emission estimates from ExxonMobil's operated assets (2022, compared to 2016 levels); the company is working to continuously improve its performance and methods to detect, measure and address greenhouse gas emissions.

The emission reduction outcome of this project is subject to the timing and regulatory approval of necessary permits, acquisition of rights of way, changes in regulatory policy, supply chain disruptions, and other market conditions

 

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EARNINGS AND VOLUME SUMMARY BY SEGMENT

Upstream

Dollars in millions (unless otherwise noted)

1Q23

4Q22

1Q22

Earnings/(Loss) (U.S. GAAP)

     

United States

1,632

2,493

2,376

Non-U.S.

4,825

5,708

2,112

Worldwide

6,457

8,201

4,488

       

Earnings/(Loss) Excluding Identified Items (non-GAAP)

     

United States

1,632

2,493

2,376

Non-U.S.

4,983

6,269

5,367

Worldwide

6,615

8,762

7,743

       

Production (koebd)

3,831

3,822

3,675

  • Upstream earnings were $6.5 billion, a decrease of $1.7 billion from the fourth quarter. The main drivers were lower prices, with crude and natural gas realizations down 10% and 23%, respectively, and unfavorable unsettled derivatives mark-to-market effects of $2.0 billion, largely reflecting the absence of a positive mark-to-market impact in the prior quarter. These impacts were partially offset by robust cost control and seasonally lower expenses, the absence of year-end inventory effects, and favorable volume/mix effects from advantaged growth in the Permian, Guyana, and LNG. Identified items unfavorably impacted earnings by $158 million this quarter, down from $561 million in the previous quarter. Earnings excluding identified items decreased from $8.8 billion to $6.6 billion.
  • Compared to the same quarter last year, earnings increased $2 billion. The prior-year period was negatively impacted by an identified item associated with the Sakhalin-1 expropriation. Excluding identified items, earnings declined $1.1 billion year over year, driven by a 23% decrease in crude realizations, partly offset by higher production volumes.
  • Net production in the first quarter was 3.8 million oil-equivalent barrels per day, an increase of nearly 160,000 oil-equivalent barrels per day compared to the same quarter last year. Excluding divestments, entitlements and the Sakhalin-1 expropriation, net production increased nearly 300,000 oil-equivalent barrels per day driven by advantaged projects in Guyana and the Permian.
  • The company announced its final investment decision for the Uaru development in Guyana. This is the fifth offshore project and is expected to provide an additional 250,000 oil-equivalent barrels per day of gross capacity with start-up targeted for 2026. In addition, two new exploration discoveries were made this year.

Energy Products

Dollars in millions (unless otherwise noted)

1Q23

4Q22

1Q22

Earnings/(Loss) (U.S. GAAP)

     

United States

1,910

2,188

489

Non-U.S.

2,273

1,882

(684)

Worldwide

4,183

4,070

(196)

       

Earnings/(Loss) Excluding Identified Items (non-GAAP)

     

United States

1,910

2,246

489

Non-U.S.

2,303

2,508

(684)

Worldwide

4,213

4,754

(196)

       

Energy Products Sales (kbd)

5,277

5,423

5,111

  • Energy Products earnings totaled $4.2 billion, up $113 million from the fourth quarter. Positive drivers were volume and mix improvements driven by reliable operations and the Beaumont refinery expansion start-up and the absence of unfavorable prior-quarter unsettled derivatives. Continued cost control offset the impact from higher scheduled maintenance expenses which were also partially mitigated by top-quartile1 turnaround performance reducing labor costs and downtime. The absence of year-end inventory effects, foreign exchange impacts, and downtime from scheduled maintenance as well as fewer days in the quarter negatively impacted results. Earnings excluding identified items decreased to $4.2 billion from $4.8 billion. Identified items in the fourth quarter included a higher impact from the additional European taxes on the energy sector and asset impairments.
  • Compared to the same quarter last year, earnings increased $4.4 billion due to stronger industry refining margins, increased marketing and trading contributions, and favorable volume/mix impacts, partly offset by increased scheduled maintenance.
  • The company successfully completed the ramp-up of the Beaumont Refinery expansion, demonstrating 250,000 barrels per day of crude distillation capacity and expanding its integration advantage by capitalizing on the growth of lighter crude oil from the Upstream's Permian assets.

1 Based on ExxonMobil estimates using historical benchmarking results from Solomon Associates

Chemical Products

Dollars in millions (unless otherwise noted)

1Q23

4Q22

1Q22

Earnings/(Loss) (U.S. GAAP)

     

United States

324

298

770

Non-U.S.

47

(48)

636

Worldwide

371

250

1,405

       

Earnings/(Loss) Excluding Identified Items (non-GAAP)

     

United States

324

298

770

Non-U.S.

47

(48)

636

Worldwide

371

250

1,405

       

Chemical Products Sales (kt)

4,649

4,658

5,018

  • Chemical Products earnings were $371 million, up from $250 million in the fourth quarter, mainly on improved margins from strengthening of the North American ethane feed advantage partly offset by higher scheduled maintenance.
  • Compared to the same quarter last year, earnings decreased by $1.0 billion on weaker industry margins and lower sales, reflecting softer market conditions.
  • The Baton Rouge polypropylene expansion, which started up in December, delivered positive earnings and cash contribution during its first full quarter of operations.

Specialty Products

Dollars in millions (unless otherwise noted)

1Q23

4Q22

1Q22

Earnings/(Loss) (U.S. GAAP)

     

United States

451

406

246

Non-U.S.

323

354

230

Worldwide

774

760

476

       

Earnings/(Loss) Excluding Identified Items (non-GAAP)

     

United States

451

406

246

Non-U.S.

323

394

230

Worldwide

774

800

476

       

Specialty Product Sales (kt)

1,940

1,787

2,006

  • Specialty Products earnings were $774 million, up $14 million from the fourth quarter. Improved finished lubes margins partially offset lower industry basestock prices. Unfavorable margin effects were more than offset by higher volumes supported by China demand recovery and finished lubes market position growth as well as seasonally lower expenses. In addition, earnings were impacted by the absence of favorable year-end inventory impacts.
  • Compared to the same quarter last year, earnings increased by $298 million, with favorable pricing actions partially offset by unfavorable foreign exchange impacts.

Corporate and Financing

     

Dollars in millions (unless otherwise noted)

1Q23

4Q22

1Q22

Earnings/(Loss) (U.S. GAAP)

(355)

(531)

(694)

Earnings/(Loss) Excluding Identified Items (non-GAAP)

(355)

(531)

(596)

  • Corporate and Financing reported net charges of $355 million. This was a decrease of $176 million versus the fourth quarter driven by lower financing costs.
  • Compared to the same quarter last year, net charges declined $339 million due to lower financing costs. Excluding the identified item associated with the Sakhalin-1 expropriation, net charges decreased $241 million.

 


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