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ExxonMobil Fourth Quarter, Full Year 2020 Results

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   |    Tuesday,February 02,2021

ExxonMobil Corp. reported its Q4 and full year 2020 results.

Exxon announced an estimated fourth quarter 2020 loss of $20.1 billion, or $4.70 per share assuming dilution. Fourth quarter capital and exploration expenditures were $4.8 billion, bringing full-year spending to $21.4 billion, $9.8 billion lower than the prior year.

Oil-equivalent production in the fourth quarter was 3.7 million barrels per day, consistent with the third quarter of 2020. Production was reduced by government mandated curtailments. Excluding entitlement effects, divestments, and government mandates, liquids production increased 5 percent, while natural gas volumes increased 2 percent.

CEO Darren Woods said: "The past year presented the most challenging market conditions ExxonMobil has ever experienced. While the effects of the pandemic significantly impacted our 2020 results, our previously executed strategic initiatives and reorganizations enabled us to respond decisively to permanently improve our cost structure, drive greater efficiencies across our businesses, and emerge a stronger company. These improvements are expected to deliver structural expense savings of $6 billion per year by 2023, relative to 2019."

"We remain focused on increasing long-term value for our shareholders by investing in our highest-return assets, preserving the strength of the balance sheet, and paying a reliable dividend. We've built a flexible capital program that is robust to a range of market scenarios and focused on our highest-return opportunities to drive greater cash flow, cover the dividend, and increase the earnings potential of our business in the near and longer term."

Q4 and Full-Year 2020 Results and Highlights


  • Average realizations for crude oil were in line with the third quarter. Natural gas realizations rose by 39 percent in the quarter, reflecting market supply disruptions and seasonal demand.
  • Liquid volumes increased 2 percent from the third quarter driven by lower maintenance and downtime. Natural gas volumes decreased 2 percent driven by reduced entitlements.
  • Upstream full-year 2020 reliability matched best-ever performance with focus on best-in-class operations.


  • The Downstream delivered full-year cost reductions in line with revised targets, and achieved best-ever personnel safety, process safety, and reliability performance.
  • Industry fuels margins improved slightly from the third quarter, but remained near historic lows driven by market oversupply and high product inventory levels. Lubricants delivered strong fourth quarter and full-year performance underpinned by improved margins and cost control, despite pandemic-related challenges.


  • Fourth quarter earnings of $691 million represent the best quarterly result since 2018, underpinned by strong safety and operational performance, and advantages from integration with refining. Chemical also achieved best-ever full-year 2020 personnel safety, process safety, and reliability performance.
  • Chemical sales volumes were even with the third quarter, while industry margins strengthened on continued strong packaging demand, automotive and durables market recovery and industry supply disruptions.
  • Achieved record full-year polyethylene sales driven by strong performance from recent investments and growing demand for the company's high-value performance products.

Strengthening the Portfolio

  • During the quarter, production volumes in the Permian averaged 418,000 oil-equivalent barrels per day, an increase of 42 percent from the prior year. Full-year 2020 production averaged 367,000 oil-equivalent barrels per day. Focus remains on lowering overall development costs and increasing recovery through efficiency gains and technology applications. Full-year 2020 drilling and completion costs were more than 25 percent lower than 2019. Over the same period, drilling rates (lateral feet per day) improved more than 20 percent and fracturing rates (stages per day) improved more than 30 percent.
  • ExxonMobil continued to progress major deepwater development in Guyana. Exploration, appraisal, and development drilling continues across four rigs with plans to add additional rigs in the first half of 2021. The Liza Phase 1 development, utilizing the Liza Destiny floating production, storage, and offloading vessel (FPSO), is producing at capacity of 120,000 gross barrels of oil per day. The Liza Unity FPSO, which will be deployed for the second phase of Liza development and will have a gross production capacity of 220,000 barrels of oil per day, is under construction and is expected to start production in 2022. Payara, the third major phase of development, which was fully funded in 2020, will also have a gross production capacity of 220,000 barrels of oil per day and is expected to start up in 2024.

Investing and Cost Management

  • ExxonMobil exceeded its commitments to reduce capital and cash operating expenses. Full-year 2020 capital spending of $21.4 billion was nearly $12 billion, or 35 percent, lower than the initial $33 billion plan, and $2 billion below the revised $23 billion plan, reflecting project pacing and optimization, increased efficiencies, and lower market prices. Cash operating expenses for the year were 15 percent lower than 2019, capturing savings from increased efficiencies, reduced activity, and lower energy costs.
  • Driven by the growing strength of ExxonMobil's investment portfolio, less strategic assets were removed from the company's Upstream development plan, including certain dry gas resources in the United States, western Canada and Argentina. Total non-cash, after-tax fourth quarter impairment charges were $19.3 billion.
  • As a result of ExxonMobil's ongoing country-by-country workforce assessments and associated reductions, the company's fourth quarter results include an identified item for after-tax severance charges of $326 million.

Management Perspectives on Forward Plans

Achieving Structural Cost Reductions

In 2020, ExxonMobil reduced annual cash operating expenses by $8 billion, of which $3 billion are structural reductions. The Company expects to generate additional annual savings of $3 billion by 2023, resulting in total structural annual expense reductions of $6 billion, including savings from a global workforce reduction.

Newly created value chain organizations for ExxonMobil's businesses present ongoing opportunities to better leverage the scale and integration of the corporation and drive further expense reductions. These cost savings will improve long-term net cash margins, and enhance earnings power and cash generation. ExxonMobil will continue to evaluate its organization and cost structure to identify additional opportunities to reduce operating expenses.

Capital Investments Flexible to Market Condition

The company expects 2021 cash flow to cover capital expenditures while maintaining the dividend and a strong balance sheet. These expectations are valid at Brent prices of $50 per barrel and at the lowest annual Downstream and Chemical margins during 2010-2019. Should the price and margin environment fall below these levels, capital expenditures can be further reduced to enable dividend coverage and maintenance of balance sheet strength at Brent prices of approximately $45 per barrel.

The company's longer-term capital plan focuses on cost-advantaged opportunities that lower breakeven oil prices even further, maximizing free cash flow generation. Approximately 90 percent of ExxonMobil's 2021-2025 upstream development capital expenditure has a cost-of-supply of $35 Brent per barrel or lower. The company's integrated portfolio and low cost-of-supply upstream projects enable it to maintain the dividend and fund annual 2022-2025 capital investments, while preserving balance sheet strength, at Brent prices between $45 and $50 per barrel, assuming 2010-2019 average Downstream and Chemical margins. The 2021-2025 start-ups are expected to generate approximately 40 percent of operating cash flows in 2025. Should prices fall below $45 per barrel, the company has the ability to further reduce capital investments, cover the dividend and maintain a strong balance sheet.

The company's strategy is to improve earnings power and cash generation by developing low cost-of-supply, high-value projects that are resilient to challenging market environments. Making these industry-advantaged investments in today's market, while covering the dividend and maintaining a strong balance sheet, improves capital efficiency and positions the company to capture even more upside should commodity prices and margins increase during the period. An update on these initiatives will be provided during the company's March Investor Day and as the year progresses.

Reducing Emissions and Advancing Low Carbon Solutions

ExxonMobil has announced the creation of a new business - ExxonMobil Low Carbon Solutions - to commercialize its extensive low-carbon technology portfolio. The organization will advance plans for more than 20 new carbon capture and sequestration (CCS) opportunities around the world to enable large-scale emission reductions.

ExxonMobil Low Carbon Solutions builds on more than two decades of R&D for lower emission solutions, efficiency improvements in operations and an industry leading CCS position, all of which have enabled ExxonMobil to reduce its Scope 1 and Scope 2 greenhouse gas emissions from operated assets by 6 percent since the adoption of the Paris Agreement in 20162.

In the fourth quarter, ExxonMobil announced plans to further reduce the intensity of its operated upstream greenhouse gas emissions by 15 to 20 percent by 2025, compared to 2016 levels. This will be supported by a 40 to 50 percent decrease in methane intensity, and a 35 to 45 percent decrease in flaring intensity across its global operations. The 2025 emission reduction plans are expected to reduce absolute greenhouse gas emissions by an estimated 30 percent for the Company's upstream business. Similarly, absolute flaring and methane emissions are expected to decrease by 40 to 50 percent. The emission reduction plans, which cover Scope 1 and Scope 2 emissions from operated assets, are projected to be consistent with the goals of the Paris Agreement and position ExxonMobil to be an industry leader in greenhouse gas performance by 2030. The Company's plans are outlined in its newly released Energy & Carbon Summary.

At year-end 2020, the Company achieved its earlier emission reduction goals outlined in 2018. These included a 15 percent reduction in methane emissions versus 2016 levels, and 25 percent reduction in flaring versus 2016 levels3.

Ongoing Board Refreshment

ExxonMobil announced today the election of Tan Sri Wan Zulkiflee Wan Ariffin, former Petronas president and Group CEO, to its board of directors. ExxonMobil continues discussions with other director candidates with a range of skills sets for potential addition to its board, as part of its ongoing refreshment process. The board expects to take further action in the near term.

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