•Continued focus on business fundamentals and strategic investments
•Chemical and Downstream results reflect diverse product portfolio, integrated manufacturing sites
Mobil Corporation (XOM):
(Dollars in millions, except per share data)
Earnings Per Common Share Assuming Dilution
Capital and Exploration Expenditures
Exxon Mobil Corporation (XOM) today announced estimated third
quarter 2016 earnings of $2.7 billion, or $0.63 per diluted share,
compared with $4.2 billion a year earlier. Results reflect lower
refining margins and commodity prices.
"ExxonMobils integrated business continues to deliver solid results,"
said Rex W. Tillerson, chairman and chief executive officer. "While the
operating environment remains challenging, the company continues to
focus on capturing efficiencies, advancing strategic investments, and
creating long-term shareholder value."
During the quarter, Upstream earnings were $620 million. Volumes for the
quarter declined 3 percent to 3.8 million oil-equivalent barrels per day
compared with a year ago, due to unplanned downtime, primarily in
Nigeria, and field decline partially offset by increased production from
recent project start-ups.
Third quarter Chemical earnings of $1.2 billion, comparable with prior
year results, reflect higher maintenance costs, partially offset by
increased specialty product sales. Downstream earnings declined to $1.2
billion primarily due to weaker refining margins.
During the quarter, capital and exploration expenses were reduced by 45
percent to $4.2 billion.
The corporation distributed $3.1 billion in dividends to shareholders in
the third quarter.
Third Quarter 2016 Highlights
? Earnings of $2.7 billion decreased $1.6 billion, or 38 percent, from
the third quarter of 2015.
? Earnings per share assuming dilution were $0.63.
? Cash flow from operations and asset sales was $6.3 billion,
including proceeds associated with asset sales of $1 billion.
? Capital and exploration expenditures were $4.2 billion, down 45
percent from the third quarter of 2015.
? Oil-equivalent production was 3.8 million oil-equivalent barrels per
day, with liquids down 5.1 percent and natural gas up 0.8 percent.
? The corporation distributed $3.1 billion in dividends to
? Dividends per share of $0.75 increased 2.7 percent compared with the
? ExxonMobil and InterOil Corporation announced an agreed transaction
worth more than $2.5 billion, under which ExxonMobil will acquire
all of the outstanding shares of InterOil. The acquisition will give
ExxonMobil access to InterOils resource base, which includes
interests in six licenses in Papua New Guinea covering about four
million acres. The transaction is pending the outcome of a
shareholder appeal of the court decision approving the transaction.
? ExxonMobil Kazakhstan Ventures Inc., a 25 percent shareholder in
Tengizchevroil LLP, has approved the final investment decision for
the Future Growth and Wellhead Pressure Management Project as part
of the next expansion phase of the Tengiz oil field.
? In Guyana, the Liza-3 appraisal well was successfully completed in
October, confirming a world-class resource discovery in excess of 1
billion oil-equivalent barrels. Also in October, the Owowo-3
exploration well, located offshore Nigeria, confirmed a discovery of
500 million to 1 billion barrels of oil.
? ExxonMobil announced plans to increase production of ultra-low
sulfur fuels at the Beaumont, Texas, refinery by approximately
40,000 barrels per day. The new unit will use proprietary technology
to remove sulfur while minimizing octane loss, and will ensure
gasoline meets the latest environmental standards.
? The company announced plans to expand its specialty elastomers plant
in Newport, Wales. The project is expected to be completed in late
2017 and will result in a 25 percent increase in global capacity to
manufacture Santoprene thermoplastic vulcanizate, high-performance
elastomers used for automotive, industrial and consumer applications.
? ExxonMobil and Saudi Basic Industries Corporation (SABIC) are
considering the potential development of a jointly owned
petrochemical complex on the U.S. Gulf Coast. The project would
include a steam cracker and derivative units, and would be located
in Texas or Louisiana near natural gas feedstock. A final investment
decision will be made upon completion of necessary studies.
? During the quarter, the company announced new developments in its
relationships with the Georgia Institute of Technology, Princeton
University and the University of Texas at Austin to pursue
technologies to help meet growing energy demand while reducing
environmental impacts and the risk of climate change.
Third Quarter 2016 vs. Third Quarter 2015
Upstream earnings were $620 million in the third quarter of 2016, down
$738 million from the third quarter of 2015. Lower liquids and gas
realizations decreased earnings by $880 million, while volume and mix
effects increased earnings by $80 million. All other items, including
lower expenses partly offset by unfavorable foreign exchange effects,
increased earnings by $60 million.
On an oil-equivalent basis, production was down compared with the third
quarter of 2015. Liquids production totaled 2.2 million barrels per day,
down 120,000 barrels per day. Higher downtime, mainly in Nigeria, and
field decline were partly offset by project start-ups. Natural gas
production was 9.6 billion cubic feet per day, up 77 million cubic feet
per day from 2015 as project start-ups more than offset field decline
and divestment impacts.
U.S. Upstream earnings declined $35 million from the third quarter of
2015 to a loss of $477 million in the third quarter of 2016. Non-U.S.
Upstream earnings were $1.1 billion, down $703 million from the prior
Downstream earnings were $1.2 billion, down $804 million from the third
quarter of 2015. Weaker margins, mainly in refining, decreased earnings
by $1.6 billion while favorable volume and mix effects increased
earnings by $170 million. All other items increased earnings by
$580 million, including lower maintenance expenses and gains from
divestments in Canada. Petroleum product sales of 5.6 million barrels
per day were 203,000 barrels per day lower than the prior year mainly
due to divestment of the Torrance, California, and Chalmette, Louisiana,
Earnings from the U.S. Downstream were $225 million, down $262 million
from the third quarter of 2015. Non-U.S. Downstream earnings of
$1 billion were $542 million lower than prior year.
Chemical earnings of $1.2 billion were $56 million lower than the third
quarter of 2015. Margins decreased earnings by $10 million. Volume and
mix effects increased earnings by $20 million. All other items decreased
earnings by $70 million due primarily to higher maintenance expenses.
Third quarter prime product sales of 6.1 million metric tons were
51,000 metric tons higher than the prior years third quarter.
U.S. Chemical earnings of $434 million were $92 million lower than the
third quarter of 2015. Non-U.S. Chemical earnings of $737 million were
$36 million higher than prior year.
Corporate and financing expenses were $370 million for the third quarter
of 2016, compared to $378 million in the third quarter of 2015.
First Nine Months 2016 Highlights
Earnings of $6.2 billion decreased 54 percent from $13.4 billion in
Earnings per share assuming dilution were $1.47.
Cash flow from operations and asset sales was $16.9 billion,
including proceeds associated with asset sales of $2.2 billion.
Capital and exploration expenditures were $14.5 billion, down 39
? Oil-equivalent production was essentially unchanged at 4 million
oil-equivalent barrels per day, with liquids up 2.6 percent and
natural gas down 4.4 percent.
? The corporation distributed $9.3 billion in dividends to
First Nine Months 2016 vs. First Nine Months 2015
Upstream earnings were $838 million, down $5.4 billion from the first
nine months of 2015. Lower realizations decreased earnings by
$5.8 billion. Favorable volume and mix effects increased earnings by
$130 million. All other items increased earnings by $260 million,
primarily due to lower expenses partly offset by the absence of asset
On an oil-equivalent basis, production of 4 million barrels per day was
essentially flat compared to the same period in 2015. Liquids production
of 2.4 million barrels per day increased 59,000 barrels per day, with
project start-ups partly offset by field decline, the Canadian
wildfires, and downtime mainly in Nigeria. Natural gas production of
10 billion cubic feet per day decreased 458 million cubic feet per day
from 2015 as regulatory restrictions in the Netherlands, field decline
and divestment impacts were partly offset by project start-ups.
U.S. Upstream earnings declined $1.3 billion from 2015 to a loss of
$1.8 billion in 2016. Earnings outside the U.S. were $2.7 billion, down
$4.1 billion from the prior year.
Downstream earnings of $3 billion decreased $2.2 billion from 2015.
Weaker refining margins decreased earnings by $3.3 billion, while volume
and mix effects increased earnings by $330 million. All other items
increased earnings by $680 million, mainly reflecting lower maintenance
expense and gains from divestments. Petroleum product sales of
5.5 million barrels per day were 306,000 barrels per day lower than 2015
mainly due to divestment of the Torrance and Chalmette refineries.
U.S. Downstream earnings were $824 million, a decrease of $642 million
from 2015. Non-U.S. Downstream earnings were $2.1 billion, down
$1.6 billion from the prior year.
Chemical earnings of $3.7 billion increased $288 million from 2015.
Stronger margins increased earnings by $440 million. Favorable volume
and mix effects increased earnings by $130 million. All other items
decreased earnings by $280 million, including the absence of asset
management gains in the U.S. partly offset by lower expenses. Prime
product sales of 18.6 million metric tons were up 387,000 metric tons
U.S. Chemical earnings were $1.5 billion, down $342 million from the
first nine months of 2015 reflecting the absence of asset management
gains. Non-U.S. Chemical earnings of $2.2 billion were $630 million
higher than prior year.
Corporate and financing expenses were $1.4 billion in 2016, compared to
$1.5 billion in 2015.
During the first nine months of 2016, Exxon Mobil Corporation purchased
9 million shares of its common stock for the treasury at a gross cost of
$727 million. These shares were acquired to offset dilution in
conjunction with the companys benefit plans and programs. The
corporation will continue to acquire shares to offset dilution in
conjunction with its benefit plans and programs, but does not currently
plan on making purchases to reduce shares outstanding.
As disclosed in ExxonMobils 2015 Form 10-K, low crude oil and natural
gas prices can impact the corporations reserves as reported under
Securities and Exchange Commission (SEC) rules. Average year-to-date
crude prices have been significantly affected by the very low prices
experienced during the first quarter of 2016, but have recovered
considerably since that time. If the average prices seen during the
first nine months of 2016 persist for the remainder of the year, under
the SEC definition of proved reserves, certain quantities of oil, such
as those associated with the Kearl oil sands operations in Canada, will
not qualify as proved reserves at year-end 2016. In addition, if these
average prices persist, the projected end-of-field-life for estimating
reserves will accelerate for certain liquids and natural gas operations
in North America, resulting in a reduction of proved reserves at
year-end 2016. Quantities that could be required to be de-booked as
proved reserves on an SEC basis amount to approximately 3.6 billion
barrels of bitumen at Kearl, and about 1 billion oil-equivalent barrels
in other North America operations. Among the factors that would result
in these reserves being re-booked as proved reserves at some point in
the future are a recovery in average price levels, a further decline in
costs, and / or operating efficiencies. Under the terms of certain
contractual arrangements or government royalty regimes, lower prices can
also increase proved reserves attributable to ExxonMobil. We do not
expect the de-booking of reported proved reserves under SEC definitions
to affect the operation of the underlying projects or to alter our
outlook for future production volumes.
In light of continued weakness in the upstream industry environment
during 2016, and as part of its annual planning and budgeting process
which is currently in progress, the corporation will perform an
assessment of its major long-lived assets, similar to the exercise
undertaken in late 2015, including North America natural gas assets and
certain other assets across the remainder of its operations. The
assessment will reflect crude and natural gas price outlooks consistent
with those that management uses to evaluate investment opportunities and
generally consistent with the long-term price forecasts published by
third-party industry and government experts. Development of future
undiscounted cash flow estimates requires significant management
judgment, particularly in cases where an assets life is expected to
extend decades into the future. An asset group would be impaired if its
estimated undiscounted cash flows were less than the assets carrying
value, and impairment would be measured by the amount by which the
carrying value exceeds fair value. The corporation will complete its
asset recoverability assessment and analyze the conclusions of that
assessment in connection with the preparation and review of the
corporations year-end financial statements for inclusion in its 2016
Form 10-K. Until these activities are complete, it is not practicable to
reasonably estimate the existence or range of potential future
impairments related to the corporations long-lived assets.
ExxonMobil will discuss financial and operating results and other
matters during a webcast at 8:30 a.m. Central Time on October 28, 2016.
To listen to the event or access an archived replay, please visit www.exxonmobil.com.
Statements relating to future plans, projections, events or
conditions are forward-looking statements. Actual financial and
operating results, including project plans, costs, timing, and
capacities; capital and exploration expenditures; asset carrying values;
reported reserves; resource recoveries; and share purchase levels, could
differ materially due to factors including: changes in oil or gas prices
or other market or economic conditions affecting the oil and gas
industry, including the scope and duration of economic recessions; the
outcome of exploration and development efforts; changes in law or
government regulation, including tax and environmental requirements; the
impact of fiscal and commercial terms; changes in technical or operating
conditions; and other factors discussed under the heading "Factors
Affecting Future Results" in the "Investors" section of our website and
in Item 1A of ExxonMobils 2015 Form 10-K. Closing of pending
acquisitions is also subject to satisfaction of the conditions precedent
provided in the applicable agreement. We assume no duty to update these
statements as of any future date.
Frequently Used Terms
This press release includes cash flow from operations and asset
sales, which is a non-GAAP financial measure. Because of the regular
nature of our asset management and divestment program, we believe it is
useful for investors to consider proceeds associated with the sales of
subsidiaries, property, plant and equipment, and sales and returns of
investments together with cash provided by operating activities when
evaluating cash available for investment in the business and financing
activities. A reconciliation to net cash provided by operating
activities is shown in Attachment II. References to quantities of oil or
natural gas may include amounts that we believe will ultimately be
produced, but that are not yet classified as "proved reserves" under SEC
definitions. Further information on ExxonMobils frequently used
financial and operating measures and other terms including "prime
product sales" is contained under the heading "Frequently Used Terms"
available through the "Investors" section of our website at
Reference to Earnings
References to corporate earnings mean net income attributable to
ExxonMobil (U.S. GAAP) from the consolidated income statement. Unless
otherwise indicated, references to earnings, Upstream, Downstream,
Chemical and Corporate and Financing segment earnings, and earnings per
share are ExxonMobils share after excluding amounts attributable to
The term "project" as used in this release can refer to a variety of
different activities and does not necessarily have the same meaning as
in any government payment transparency reports. Santoprene is a
registered trademark of Exxon Mobil Corporation.
Exxon Mobil Corporation has numerous affiliates, many with names that
include ExxonMobil, Exxon, Mobil, Esso, and XTO. For convenience and
simplicity, those terms and terms such as Corporation, company, our, we,
and its are sometimes used as abbreviated references to specific
affiliates or affiliate groups. Similarly, ExxonMobil has business
relationships with thousands of customers, suppliers, governments, and
others. For convenience and simplicity, words such as venture, joint
venture, partnership, co-venturer, and partner are used to indicate
business and other relationships involving common activities and
interests, and those words may not indicate precise legal relationships.
Estimated Key Financial and Operating Data
(millions of dollars, unless noted)
Earnings / Earnings Per Share
Total revenues and other income
Total costs and other deductions
Income before income taxes
Net income including noncontrolling interests
Net income attributable to noncontrolling interests
Net income attributable to ExxonMobil (U.S. GAAP)
Earnings per common share (dollars)
Earnings per common share - assuming dilution (dollars)
Dividends on common stock
Per common share (dollars)
Millions of common shares outstanding
At September 30
Average - assuming dilution
ExxonMobil share of equity at September 30
ExxonMobil share of capital employed at September 30
All other taxes
ExxonMobil share of income taxes of equity companies
Corporate and financing
Net income attributable to ExxonMobil
Cash flow from operations and asset sales (billions of
Net cash provided by operating activities (U.S. GAAP)
Proceeds associated with asset sales
Cash flow from operations and asset sales
Net production of crude oil, natural gas liquids, bitumen and
synthetic oil, thousand barrels per day (kbd)
Canada / South America
Australia / Oceania
Natural gas production available for sale, million cubic feet per
Canada / South America
Australia / Oceania
Oil-equivalent production (koebd)(1)
(1)Gas converted to oil-equivalent at 6 million cubic feet
Refinery throughput (kbd)
Petroleum product sales (kbd)
Heating oils, kerosene, diesel
Chemical prime product sales, thousand metric tons (kt)
Capital and Exploration Expenditures
Exploration expenses charged to income included above
Equity companies - ExxonMobil share
$ Per Common Share(1)
(1) Computed using the average number of shares outstanding
during each period.
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SOURCE: Exxon Mobil Corporation
Media Relations, 972-444-1107