USA: Exxon Mobil Announces Estimated 2nd Q 2010 Results
EXXONMOBIL’S CHAIRMAN REX W. TILLERSON COMMENTED:
“ExxonMobil’s focus on operational excellence continues to deliver strong results. Second quarter earnings, excluding special items, of $7.6 billion, were up 85% from second quarter of last year reflecting higher crude oil realizations, improved downstream margins, and strong chemical results. First half earnings, excluding special items, of $13.9 billion increased by 60% over the first half of 2009.
“Oil-equivalent production increased by 8% over the second quarter of 2009 driven by contributions from our world-class assets in Qatar.”
“We continued our focus on investing for the future with capital and exploration spending of $13.4 billion year to date, up 9% from the first half of last year.”
“Over $3 billion was returned to shareholders in the second quarter through dividends and share purchases to reduce shares outstanding.”
“The Corporation’s second quarter 2010 earnings and production volumes included de minimis amounts for the period from June 25 to June 30 resulting from the merger with XTO Energy Inc. which closed on June 25, 2010.”
SECOND QUARTER HIGHLIGHT
* Earnings excluding special items were $7,560 million, an increase of 85% or $3,470 million from the second quarter of 2009.
* Earnings per share excluding special items were $1.60, an increase of 90%.
* Earnings were up 91% from the second quarter of 2009 which included a special charge of $140 million for interest related to the Valdez punitive damages award. Earnings for the second quarter of 2010 did not include any special items.
* Capital and exploration expenditures were $6.5 billion, down 1% from the second quarter of 2009.
* Oil-equivalent production increased 8% from the second quarter of 2009. Excluding the impacts of entitlement volumes, OPEC quota effects and divestments, production was up about 10%.
* Cash flow from operations and asset sales was $9.6 billion, including asset sales of $0.5 billion.
* Share purchases to reduce shares outstanding were over $1 billion.
* Dividends per share of $0.44 increased by 5% compared to the second quarter of 2009.
* The merger with XTO Energy, a leading U.S. unconventional natural gas and oil producer, was completed on June 25, 2010, making ExxonMobil the largest U.S. natural gas producer. Through this transaction ExxonMobil has acquired a resource base in excess of 45 trillion cubic feet equivalent at a cost of under $1 per kcf equivalent.
* ExxonMobil and Synthetic Genomics Inc. (SGI) announced the opening of a greenhouse facility enabling the next step of research and testing in our algae biofuels program. SGI and ExxonMobil researchers are using the facility to test whether large-scale quantities of affordable fuel can be produced from algae.
Second Quarter 2010 vs. Second Quarter 2009
Upstream earnings were $5,336 million, up $1,524 million from the second quarter of 2009. Higher crude oil and natural gas realizations drove the improvement and increased earnings by $1.6 billion.
On an oil-equivalent basis, production increased 8% from the second quarter of 2009. Excluding the impacts of entitlement volumes, OPEC quota effects and divestments, production was up about 10%.
Liquids production totaled 2,325 kbd (thousands of barrels per day), down 21 kbd from the second quarter of 2009. Excluding the impacts of entitlement volumes, OPEC quota effects and divestments, liquids production was up 1%, as increased production from projects in Qatar and Kazakhstan more than offset net field decline.
Second quarter natural gas production was 10,025 mcfd (millions of cubic feet per day), up 1,984 mcfd from 2009, driven by project ramp-ups in Qatar and higher demand in Europe, partly offset by net field decline.
Earnings from U.S. Upstream operations were $865 million, $52 million higher than the second quarter of 2009. Non-U.S. Upstream earnings were $4,471 million, up $1,472 million from last year.
Downstream earnings of $1,220 million were up $708 million from the second quarter of 2009. Higher industry refining and marketing margins increased earnings by $780 million. Volumes and product mix effects increased earnings by $170 million while other factors, mainly unfavorable foreign exchange impacts, decreased earnings by $240 million. Petroleum product sales of 6,241 kbd were 246 kbd lower than last year’s second quarter, mainly reflecting lower demand.
Earnings from the U.S. Downstream were $440 million, up $455 million from the second quarter of 2009. Non-U.S. Downstream earnings of $780 million were $253 million higher than last year.
Chemical earnings of $1,368 million were $1,001 million higher than the second quarter of 2009. Stronger margins improved earnings by $840 million and higher sales volumes increased earnings by $120 million. Second quarter prime product sales of 6,496 kt (thousands of metric tons) were 229 kt higher than the prior year primarily due to improved global demand.
Corporate and financing expenses excluding special items were $364 million, down $237 million due mainly to favorable tax items.
During the second quarter of 2010, Exxon Mobil Corporation purchased 24 million shares of its common stock for the treasury at a gross cost of $1.6 billion. These purchases included over $1 billion to reduce the number of shares outstanding, with the balance used to offset shares issued in conjunction with the company’s benefit plans and programs. As a result of regulatory requirements, no open market purchases of shares were made during the proxy solicitation period for the XTO transaction. Including 416 million shares issued in connection with the XTO merger, shares outstanding increased from 4,698 million at the end of the first quarter to 5,092 million at the end of the second quarter. Share purchases to reduce shares outstanding are currently anticipated to equal $3 billion in the third quarter of 2010. Purchases may be made in both the open market and through negotiated transactions, and may be increased, decreased or discontinued at any time without prior notice.
Source: Businesswires, July 29, 2010: