ExxonMobil (XOM), the U.S. mega major, disclosed a 54% decline in its annual net profit, reporting US$36 billion for 2023. Despite maintaining oil and gas production levels consistent with 2022, upstream oil and gas price realizations contributed to the drop in profits, the company said in its Feb. 2 financial report.
In its fourth-quarter and full-year 2023 results, the company highlighted generating US$55.4 billion in annual cash flow and distributing US$32.4 billion to shareholders. The $36 billion annual profit marked its second-largest on record and exceeded analyst expectations.
Exxon’s key achievements included an 18% increase in production in Guyana and the Permian basin compared to 2022 and achieving record annual refinery throughput.
Guyana, Permian continue to boost Exxon’s earnings | OilNOW
For its Guyana operations, Exxon brought online Payara – the third development currently producing 220,000 barrels per day, three months ahead of schedule.
Exxon also executed strategic moves, selling US$4.1 billion of non-core assets and making significant acquisitions, including the US$4.8 billion purchase of Denbury and the ongoing merger agreement with Pioneer Natural Resources to transform its Upstream business.
Chief Executive, Darren Woods, praised Exxon’s consistent strategy and execution excellence, stating, “These results demonstrate the fundamental improvements we’ve made to our business, reflecting our progress in high-grading our portfolio through investments in advantaged projects and select divestments, while, at the same time, driving a higher level of efficiency and effectiveness throughout the business.”
Regarding segment performance, Exxon’s upstream oil and gas division reported full-year earnings of US$21.3 billion, a US$15.2 billion decrease from 2022. Identified items for the year reduced earnings by US$2.3 billion. Excluding identified items, upstream earnings decreased by US$15.8 billion due to lower liquids and natural gas realizations and unsettled derivatives mark-to-market effects of US$2.4 billion.
Despite the profit decline, Exxon remains confident of its US$59.5 billion all-stock merger with Pioneer Natural Resources, expected to generate double-digit returns, with the closing anticipated in the second quarter of 2024.
