Red ink for ExxonMobil amid asset impairments

Oil major ExxonMobil booked a quarterly loss due to asset impairments amid lower oil prices while its production was up by 2 per cent.

ExxonMobil last Friday posted an estimated first-quarter 2020 loss of $610 million compared with earnings of $2.4 billion a year earlier.

Results included a $2.9 billion charge from identified items, reflecting noncash inventory valuation impacts from lower commodity prices and asset impairments.

Cash flow from operating activities was $6.3 billion. Capital and exploration expenditures were $7.1 billion.

Oil-equivalent production was 4 million barrels per day, up 2 per cent from the first quarter of 2019, with a 7 per cent increase in liquids partly offset by a 5 per cent decrease in gas.

Excluding entitlement effects and divestments, oil-equivalent production was up 5 per cent from the prior year, with Upstream liquids production up 9 per cent on growth in the Permian and Guyana.

In response to market conditions, ExxonMobil in April announced that it is reducing 2020 capital spending by 30 per cent and cash operating expenses by 15 per cent.

Capex is now expected to be approximately $23 billion for the year, down from the previously announced guidance of $33 billion.

“COVID-19 has significantly impacted near-term demand, resulting in oversupplied markets and unprecedented pressure on commodity prices and margins”, said Darren W. Woods, chairman and chief executive officer.

“While we manage through these challenging times, we are not losing sight of the long-term fundamentals that drive our business. Economic activity will return, and populations and standards of living will increase, which will, in turn, drive demand for our products and recovery of the industry”.

ExxonMobil’s peers ConocoPhillips and Chevron posted a loss of $1.7 billion and earnings of $3.6 billion, respectively.