ExxonMobil, one of the world’s leading energy companies, has announced robust third-quarter earnings of US$9.1 billion, surpassing the second-quarter earnings of US$7.9 billion. It said that the performance was underpinned by a strong operational showing, including record refining throughput for the third quarter. Additionally, higher crude oil prices and a favorable industry refining margin environment contributed to the results. Guyana and the Permian featured as key contributors to the performance this quarter.
ExxonMobil’s earnings report highlighted several key factors that influenced its performance. While strong operating performance and a higher crude oil price were significant contributors, the company was partially offset by weaker chemical margins, unfavorable derivative mark-to-market impacts, and trading timing effects. However, the latter effects are expected to unwind over time, providing optimism for the future, it said.
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ExxonMobil’s strong earnings also had a positive impact on its financials, with cash flow from operations reaching US$16 billion and free cash flow amounting to US$11.7 billion. These figures represent a substantial increase of US$6.6 billion and US$6.7 billion, respectively, compared to the second quarter. Shareholders reaped the rewards of this success, with the company distributing US$8.1 billion in the third quarter, comprising US$3.7 billion in dividends and US$4.4 billion in share repurchases. The year-to-date share repurchases totaled US$13.1 billion, in line with the company’s plan to repurchase US$17.5 billion worth of shares in 2023.
ExxonMobil’s upstream segment also posted robust earnings for the third quarter, amounting to US$6.1 billion. This marks a notable increase of US$1.5 billion compared to the second quarter. The improved performance in the upstream segment was driven by higher crude oil prices, reduced scheduled maintenance, and favorable tax impacts. However, identified items had an unfavorable impact of US$14 million on earnings during the quarter, the report outlined.
Compared to the same quarter last year, earnings decreased by US$6.3 billion. Excluding identified items, earnings saw a decline of US$5.7 billion. This decline was primarily driven by a nearly 60% decrease in natural gas realizations and a 14% decrease in crude oil realizations. Notably, when excluding the impacts of divestments, entitlements, and government-mandated curtailments, net production increased by approximately 80,000 oil-equivalent barrels per day, driven by the Permian and Guyana.
Guyana produced over 90 million barrels of oil in first eight months of 2023
Darren Woods, chairman and chief executive officer of ExxonMobil, expressed his satisfaction with the company’s performance, saying, “We delivered another quarter of strong operational performance, earnings, and cash flows, adding nearly 80,000 net oil-equivalent barrels per day to support global supply.” He also emphasized the organization’s focus on safety, environmental responsibility, and value creation, highlighting record refining throughputs, successful project execution, and exceeding planned cost savings while reducing emissions intensity.
For the year-to-date, ExxonMobil reported earnings of US$17.2 billion, representing a decrease of US$11.1 billion compared to the first nine months of 2022. The prior year was impacted by net negative identified items, including one associated with the Sakhalin-1 expropriation. Excluding these identified items, earnings declined by US$13.3 billion. Nevertheless, ExxonMobil said higher production from advantaged projects in Guyana and the Permian partially offset lower crude and natural gas realizations. Year-to-date production reached 3.7 million oil-equivalent barrels per day, with a portfolio mix that continued to improve, driven by liquid production growth from Guyana and the Permian.
Lastly, in October, ExxonMobil announced a merger agreement with Pioneer Natural Resources in a US$59.5 billion all-stock transaction. The merger is expected to generate double-digit returns, allowing for more efficient resource recovery while accelerating emissions reductions.
