Fourth quarter production for Exxon turns south

Most of Exxon's reported earnings from exploration and production in the fourth quarter were supported by the U.S. tax overhaul.
By Daniel J. Graeber Follow @dan_graeber Contact the Author   |  Feb. 2, 2018 at 9:20 AM
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Feb. 2 (UPI) -- While pledging to spend "billions of dollars" on U.S. production, Exxon Mobil said Friday its production was down about 3 percent from last year.

Exxon reported its oil-equivalent production during the fourth quarter was on average 4 million barrels per day, a decline of about 130,000 barrels per day, or 3 percent lower than fourth quarter 2016. The company attributed some of the issue to field decline and lower entitlements.

Spending on exploration in the third quarter was 3 percent lower during the first nine months of 2017 and Hurricane Harvey took $160 million off those quarterly figures.

The output comes despite advancing on some of the more promising oil basins in the world. During the fourth quarter, it announced its sixth oil discovery off the coast of Guyana, where it put the total reserve estimate at more than 3.2 billion barrels of oil equivalent, not counting the latest find.

Offshore Brazil, the company moved on an agreement with Norwegian energy major Statoil to take a stake in a field with estimated recoverable reserves of 2 billion barrels of high-quality oil.

The company pledged Friday to spend $50 billion on U.S. exploration and production over the next five years, primarily in the Permian shale basin in Texas. That investment commitment, and the $8.4 billion in earnings from exploration and production, was a result of U.S. tax reforms that went into force this year.

"The impact of tax reform on our earnings reflects the magnitude of our historic investment in the U.S. and strengthens our commitment to further grow our business here," Chairman and CEO Darren Woods said in a statement.

Fourth quarter earnings from exploration and production were $9 billion higher than the same period in 2016. The company said $7.1 billion of that was driven by the U.S. tax reform.

Exploration and production figures in the United States resulted in a loss of $238 million in the third quarter.

The U.S. spending commitment from Wood is identical to pledges made before U.S. President Donald Trump made his first State of the Union earlier this week.

Trump signed the Tax Cuts and Jobs Act before leaving for the Christmas holiday. The measure, which permanently cuts taxes for corporations from 35 percent to 21 percent, passed out of the House and Senate along party lines.

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