ExxonMobil Smash Earnings as Permian Production Rises 90%

Oil giant ExxonMobil reported better than expected fourth quarter earnings Friday before the market with higher production in Brazil, the U.S. Permian Basin and Indonesia.

Oil giant ExxonMobil reported better than expected fourth quarter earnings Friday before the market with higher production in Brazil, the U.S. Permian Basin and Indonesia.

ExxonMobil Inc. (NYSE: $XOM) Reported Earnings Before Open Friday

$1.41 Beats $1.05 EPS On $71.89B Beats $74.18 billion revenue forecast

Earnings

Exxon Mobil Corp. (NYSE: XOM) reported Q4 EPS of $1.41 on revenue of $71.89 billion beating expectations for Exxon earnings climbing 19% to $1.05 per share on revenue rising 11.5% to $74.18 billion.

Net income fell 28% to $6 billion, excluding tax reform and impairments, earnings soared 72% to $6.41 billion. Total revenues increased 8.1% with the dip in earnings for the fourth quarter due to tax reform and impairments

Exxon Mobil Corporation NYSE: $XOM

Market Reaction Pre-market 74.60 +1.32 (+1.80%)

Highlights

• Total production rose 4.8% to 4.01 million barrels of oil equivalent per day.
• Production in the Permian Basin jumped more than 90%.
• Capital spending dropped 13% to $7.84 billion.
• Cash flow from operations climbed 16% to $8.6 billion.
• Oil-equivalent production rose 0.5% to 4.01-kilo barrels per day from the year-ago period.
• Liquids production increased by 97-kilo barrels per day was partly offset by decline, lower entitlements, and divestments.
• Gas production declined by 467 thousand cubic feet per day largely in the US aligned with value focus, lower demand, lower entitlements, and divestments.

ExxonMobil Q3 Earnings Recap

$1.46 Beats $1.23 EPS On $76.16B Beats $73.55 billion revenue forecast

Earnings

Exxon Mobil Corp. (NYSE: XOM) reported third-quarter earnings on Friday with $1.46 EPS on $76.16 billion beating consensus forecast of EPS $1.23 on $73.55 billion in revenue. Shares in $XOM have a 52-week range of $72.16 to $89.30.

Exxon Mobil  second quarter earnings missed: 92 cents per share vs $1.27, according to Thomson Reuters. Revenue: $73.5 billion vs $72.58 billion, according to Thomson Reuters. 

Exxon Mobil Corporation NYSE: $XOM

Market Reaction Pre-market 82.10 +1.43 (+1.77%)

Highlights

• CAPEX: $6.59B
• Production: 3.786 M BOE/D (est 3.72M)
• Upstream income soared 170% to $4.23 billion.
• Downstream income rose 7% to $1.64 billion.
• Cash flow from operations jumped 50% to $12.6 billion.
• Oil-equivalent production fell 2.4% from a year ago to 3.8 million barrels per day, but it rose 3.8% vs. Q2.
• Exxon ramped up to 38 rigs in the Permian’s Midland and Delaware basins up from 27 in Q1.

“We are seeing the benefits of integration as we capture value from advantaged feedstock from the Permian and Western Canada for our North American refineries,” said Chairman and CEO Darren Woods in a statement. “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.”

China Highlights

Exxon is pushing ahead in China despite the trade war, Exxon’s Asian and African LNG will offer a cost advantage over U.S. rivals’ exports that face tariffs and greater transport. The decision to expand its LNG production and open an import terminal in the world’s fastest growing LNG market is a step by Exxon Chief Executive Darren Woods to pull the company out of an earnings rut.

Since becoming CEO last year, Woods has pushed Exxon to take greater risks, including in energy trading operations. His timing with LNG is key. Next year, China will become the world’s largest importer of natural gas, and its LNG imports are forecast to rise 70 percent by 2020, from 38.1 million tonnes last year, estimates Beijing consultancy SIA Energy.

Exxon has not publicly named its partner in the import terminal. State-run power company Guangdong Yuedian Group said on its website it will join the project. BP Plc is the only other foreign major with a stake in a Chinese LNG terminal.

 In addition to the LNG terminal, Exxon received approval for its first wholly-owned chemical plant in China, becoming one of two foreign firms including Germany’s BASF to gain approval to operate such plants without a local sponsor. The terminal and chemicals plants combined will cost about $9 billion to build, consultancy IHS Markit estimates.

ExxonMobil Q2 Earnings Recap

$0.92 missed $1.27 EPS and $73.5 billion beat $72.67 billion forecast in revenue 

Earnings

Exxon Mobil  second quarter earnings missed: 92 cents per share vs $1.27, according to Thomson Reuters. Revenue: $73.5 billion vs $72.58 billion, according to Thomson Reuters, Compared with $3.4 billion a year earlier. 

Exxon Mobil Corporation NYSE: $XOM

Market Reaction > Pre-market 82.50 −1.74 (2.07%)

Highlights

• Cash flow from operations and asset sales was $8.1 billion, including proceeds associated with asset sales of $307 million.
• During the quarter, the corporation distributed $3.5 billion in dividends to shareholders.
• Capital and exploration expenditures were $6.6 billion, up 69 percent from the prior year, reflecting key investments in Brazil, the U.S. Permian Basin and Indonesia. Project milestones increasing confidence in long-term growth plans
• Permian and Bakken production up 30 percent from same quarter last year
• Eighth discovery offshore Guyana; acquires new interest and acreage in Brazil

Upstream:

• Crude prices strengthened in the second quarter, while natural gas prices were mixed.
• U.S. tight oil growth in the Permian and Bakken continued, reaching over 250,000 oil-equivalent barrels per day in the second quarter, an increase of 30 percent from the same period last year. The Hebron field in Canada continued to exceed expectations, ramping up to 25,000 oil-equivalent barrels per day in the second quarter.
• Natural gas volumes were impacted by lower seasonal demand in Europe, deliberate near-term shifting of investments in U.S. unconventionals from gas to liquids and downtime in LNG operations, notably in Qatar.
• Production at Papua New Guinea returned to normal operations in April and reached record daily LNG production rates in June. Second quarter volume loss associated with the earthquake recovery was 17,000 oil-equivalent barrels per day.
• Scheduled maintenance activities were undertaken to support operational integrity, largely in Canada at Syncrude, Cold Lake and Kearl, impacting volumes and expenses in second quarter.

Downstream:

• Global refining margins strengthened during the quarter due to higher industry refinery maintenance activity and increased seasonal petroleum product demand.
• Overall throughput and earnings were impacted by heavy turnaround and maintenance activities during the quarter. Planned turnarounds were successfully completed at the refineries in Saudi Arabia, Port-Jérȏme, France, Baytown and Beaumont, Texas, and Alberta, Canada.
• Unplanned maintenance, a majority of which was carried-in from the first quarter, was largely completed during the quarter.
• Growth in higher-value sales of retail fuels in the U.S., Belgium, the Netherlands and Luxembourg, combined with record quarterly sales of Mobil 1 lubricants in the U.S. and China, resulted in improved earnings during the quarter.
• Depreciation in the Euro and British pound relative to the U.S. dollar negatively impacted earnings.

Chemical:

• ExxonMobil continued to make significant progress in growing the Chemical business. Second quarter sales were the highest since 2007, and new volumes in Singapore and the U.S. contributed more than 530,000 metric tons of sales during the quarter. This included an additional 145,000 metric tons of high-performance products as the company continued to strengthen its leading position in this market.
• Chemical margins weakened during the quarter as higher feed and energy costs outpaced stronger realizations. 

 via AlphaStreet

ExxonMobil Earnings Preview

What Analysts Will Be Watching

Exxon Mobil Corporation principal business is energy exploration and production of, crude oil and natural gas; manufacture of petroleum products; and transportation and sale of crude oil, natural gas, and petroleum products, $XOM.operates as a manufacturer and marketer of commodity petrochemicals, including olefins, aromatics, polyethylene and polypropylene plastics; and various specialty products.

Look for capex, cash and Permian bottleneck and Syncrude breakdown impact. Dividends are huge with oil majors. Exxon’s capex budget was $22 billion for 2017, updates on this are key with oil recovering so far this year.

JPMorgan’s Phil Gresh reiterated a Neutral rating and an $88 price target on Exxon last week, In his note he said his earnings estimates are in line with consensus, but that “it feels like upside could be fairly limited.” He notes that on the upstream (exploration) side, earthquake-recovery efforts likely hurt volumes, prices, and cash flows at the PNG LNG project that Exxon is spearheading, while maintenance and production issues in areas from Canada to Kazakhstan may also weigh on the quarterly results. Overall Gresh warns that Exxon could $XOM another year-over year and quarter-over-quarter production decline, the eighth quarterly production decline in the last 10 quarters.

Watch for $XOM  operating cash flow and how much goes in dividend payments. 

Permian updates are what we want. After the huge acerage buys at the start of last year Exxon announced last quarter another 22,000 net acres in the Permian Basin since split between the Midland Basin and the Delaware Basin. Guyana is another region we want to hear updates on. LNG and natural gas updates along with its massive polyethylene production expansion in Mont Belvieu are all areas to watch in this intergrated major.

Previous Earnings: 

• Q3 ExxonMobil $XOM Earnings Shrug Off Harvey With Robust Cashflow
• Q2 Exxon Misses Earnings on Lower Production

ExxonMobil Huge Liza Field Acerage in Guyana

$XOM made a final investment decision during 2Q17 to proceed with the Liza field development located offshore Guyana, where production is expected to start in 2020. The company expects Liza to add up to 120,000 barrels of oil per day to $XOM‘s production.

Source: ExxonMobil, Alpha Street. Reuters

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