Financial Energy Review
Exxon Mobil Corporation has announced first-quarter 2024 earnings of $8.2 billion, or $2.06 per share assuming dilution. The Company in astatement, informed that the capital and exploration expenditures were $5.8 billion, consistent with the company’s full-year guidance of $23 billion to $25 billion.
It said,”Generated strong first-quarter earnings of $8.2 billion and $14.7 billion of cash flow from operating activities
Achieved quarterly gross production of more than 600,000 oil-equivalent barrels per day in Guyana and reached a final investment decision on the sixth major development
Grew performance chemical sales volumes and delivered record first-quarter refining throughput1 while maintaining excellent turnaround performance.”
“Reduced operated methane emissions intensity by more than 60% since 2016.”
“Investing in technology to extend our reach to new high-value, high-growth markets including advanced recycling, ProxximaTM, carbon materials and direct air capture of carbon dioxide.”
“Our strategy and focus on execution excellence is creating significant value for society and our shareholders,” said Darren Woods, chairman and chief executive officer.
“We delivered a strong quarter with continued growth in advantaged assets, such as Guyana, where production continues at higher-than-expected levels, contributing to historic economic growth for the Guyanese people. In Product Solutions, our strong turnaround performance on cost and schedule helped drive record first-quarter refining throughput1. Looking ahead, we’re making great progress on our plans to grow the earnings power of our existing businesses from investments in advantaged assets and higher-value products, and further reduce structural costs. We are investing in technology to transform the molecules derived from oil and natural gas into products that extend our reach into new, high-value, high-growth markets to capture even greater value from our core competitive advantages.”
1 Highest first-quarter global refinery throughput (2000-2024) since Exxon and Mobil merger in 1999, based on current refinery circuit.
2 Based on year-end 2023 data.
3 Assuming dilution.
Financial Highlights
First-quarter earnings were $8.2 billion versus $11.4 billion in the first quarter of 2023.
Earnings excluding identified items were $8.2 billion compared to $11.6 billion in the same quarter last year.
It further informed that, earnings decreased as industry refining margins and natural gas prices came down from last year’s highs to trade within the ten-year historical range. “Timing effects from unsettled derivative mark-to-market impacts and other primarily non-cash impacts from tax and inventory adjustments as well as divestments contributed to the lower earnings.”
“Strong advantaged volume growth primarily from Guyana and the Beaumont refinery expansion, and structural cost savings helped to offset lower base volumes from divestments, unfavorable entitlements and government-mandated curtailments, and higher expenses from scheduled maintenance.”
“Achieved $10.1 billion of cumulative Structural Cost Savings versus 2019 with an additional $0.4 billion during the quarter. The company plans to deliver cumulative savings totaling $15 billion through the end of 2027.”
“Generated strong cash flow from operations of $14.7 billion and free cash flow of $10.1 billion in the first quarter.” “Shareholder distributions of $6.8 billion in the quarter included $3.8 billion of dividends and $3.0 billion of share repurchases.”
“The share-repurchase program was paused briefly following the Pioneer S-4 filing and resumed after Pioneer’s special shareholder meeting. The annual pace of share repurchases will increase to $20 billion per year after the transaction closes, assuming reasonable market conditions.”
The Corporation declared a second-quarter dividend of $0.95 per share, payable on June 10, 2024, to shareholders of record of Common Stock at the close of business on May 15, 2024.
The company’s debt-to-capital ratio was 16% and the net-debt-to-capital ratio was 3%, reflecting a period-end cash balance of $33.3 billion.
And added that, earnings factors have been updated to provide additional visibility into drivers of our business results starting this first quarter of 2024. The company evaluates these factors periodically to determine if any enhancements may provide helpful insights to the market. See page 8 for definitions of these new factors.
“10-year range includes 2010-2019, a representative 10-year business cycle which avoids the extreme outliers in both directions that the market experienced in the past four years,” it said.
On the Upstream first-quarter earnings, the company said that they were $5.7 billion, a decrease of $797 million compared to the same quarter last year.
THe company explained that, the prior-year period was negatively impacted by tax-related identified items.
“Excluding identified items, earnings decreased $955 million driven by a 32% decrease in natural gas realizations and other primarily non-cash impacts from tax and inventory adjustments as well as divestments.”
” These factors were partially offset by a 4% increase in liquids realizations and less unfavorable timing effects mainly from derivatives mark-to-market impacts.
” Net production was 47,000 oil-equivalent barrels per day lower than the same quarter last year with the growth in advantaged Guyana volumes more than offsetting the earnings impact from lower base volumes due to divestments, government-mandated curtailments and unfavorable entitlement effects. Excluding the impacts from divestments, entitlements, and government-mandated curtailments, net production grew 77,000 oil-equivalent barrels per day driven by the start-up of the Payara development in Guyana.
” Payara reached nameplate capacity of 220,000 barrels per day in mid-January, ahead of schedule, demonstrating excellence in project execution and operations,”it added.
Compared to the fourth quarter, earnings increased $1.5 billion driven by the absence of identified items of $2.1 billion mainly from the impairment of the idled Santa Ynez Unit assets in California.
Earnings excluding identified items decreased from $6.3 billion to $5.7 billion. Advantaged asset volume growth from Guyana provided a partial offset to lower natural gas realizations and lower base volumes due to unfavorable sales timing and entitlement impacts.
Net production in the first quarter was 3.8 million oil-equivalent barrels per day, a decrease of 40,000 oil-equivalent barrels per day compared to the fourth quarter. Excluding divestments, entitlements and government-mandated curtailments, net production increased 57,000 oil-equivalent barrels per day.
The company announced a final investment decision for the Whiptail development in Guyana.
This is the sixth offshore project and is expected to add approximately 250,000 oil-equivalent barrels per day of gross capacity with start-up targeted by year-end 2027. Construction is underway on the Floating Production Storage and Offloading vessels for the Yellowtail and Uaru projects, with Yellowtail anticipated to start production in 2025 and Uaru targeted for 2026. In addition, one new exploration discovery was made this year in the Stabroek block.
In October 2023, ExxonMobil announced an agreement to merge with Pioneer Natural Resources in a $59.5 billion all-stock transaction1. The transaction was approved by Pioneer shareholders. The transaction close is anticipated in the second quarter of 2024, pending regulatory approval.
