USA:Exxon Mobil’s First Quarter Results

ExxonMobil reported its estimated first quarter 2010 results. Chairman Rex W. Tillerson commented, “ExxonMobil achieved solid results from its worldwide operations with first quarter earnings of $6.3 billion, up 38% from first quarter of last year. Our results reflect higher crude oil realizations and stronger chemical margins while the downstream industry margins remained weak.

“Oil-equivalent production increased by 4.5% over the first quarter of 2009 driven by contributions from recent start-ups of our world-class assets in Qatar.

“Our solid financial position enabled ongoing investment at record levels through the business cycle. In the first quarter, capital and exploration spending was $6.9 billion, up 19% from last year.

“Nearly $4 billion was returned to shareholders in the first quarter through dividends and share purchases to reduce shares outstanding.

“We are continuing to progress the XTO merger and received clearance from the U.S. Federal Trade Commission and Dutch authorities. We continue to target for completion by the end of the second quarter.”

FIRST QUARTER HIGHLIGHTS

• Earnings were $6,300 million, an increase of 38% or $1,750 million from the first quarter of 2009.
• Earnings per share (EPS) were $1.33, an increase of 45%.
• Earnings include a charge of approximately $200 million (-$0.04 EPS) associated with the recently enacted U.S. health care legislation.
• Capital and exploration expenditures were $6.9 billion, up 19% from the first quarter of 2009.
• Oil-equivalent production increased 4.5% from the first quarter of 2009. Excluding the impacts of entitlement volumes, OPEC quota effects and divestments, production was up nearly 6%.
• Cash flow from operations and asset sales was $13.5 billion, including asset sales of $0.4 billion.
• Share purchases to reduce shares outstanding were about $2 billion.
• Ras Laffan 3 LNG Train 7 commenced operations in the first quarter and represents the fourth 7.8 million tons per year LNG plant brought online by Qatar Petroleum and ExxonMobil joint ventures within the past 12 months.
• ExxonMobil Iraq Limited signed an agreement with the Iraq Ministry of Oil to redevelop and expand the West Qurna-1 field in southern Iraq.

First Quarter 2010 vs. First Quarter 2009

Upstream earnings were $5,814 million, up $2,311 million from the first quarter of 2009. Higher crude oil prices, partly offset by lower natural gas realizations, increased earnings $2.5 billion. Higher gas volumes improved earnings by $190 million while higher operating expenses decreased earnings $380 million.

On an oil-equivalent basis, production increased 4.5% from the first quarter of 2009. Excluding the impacts of entitlement volumes, OPEC quota effects and divestments, production was up nearly 6%.

Liquids production totaled 2,414 kbd (thousands of barrels per day), down 62 kbd from the first quarter of 2009. Excluding the impacts of entitlement volumes, OPEC quota effects and divestments, liquids production was down 1%, as increased production from projects in Qatar and Kazakhstan was offset by field decline.

First quarter natural gas production was 11,689 mcfd (millions of cubic feet per day), up 1,502 mcfd from 2009, driven by project ramp-ups in Qatar and higher demand in Europe.

Earnings from U.S. Upstream operations were $1,091 million, $731 million higher than the first quarter of 2009. Non-U.S. Upstream earnings were $4,723 million, up $1,580 million.

Downstream earnings were $37 million, down $1,096 million. Lower refining margins drove the majority of the decline, reducing earnings $1.1 billion. Petroleum product sales of 6,144 kbd were 290 kbd lower than last year’s first quarter, mainly reflecting lower demand.

The U.S. Downstream recorded a loss of $60 million, down $412 million from the first quarter of 2009. Non-U.S. Downstream earnings of $97 million were $684 million lower.

Chemical earnings of $1,249 million were $899 million higher than the first quarter of 2009. Stronger margins improved earnings by nearly $480 million while higher sales volumes increased earnings $180 million. All other items, including asset management gains and the absence of hurricane costs from 2009, increased earnings by $240 million. First quarter prime product sales of 6,488 kt (thousands of metric tons) were 961 kt higher than the prior year primarily due to improved global demand.

Corporate and financing expenses were $800 million, up $364 million from first quarter 2009, mainly due to a charge related to the U.S. health care legislation signed into law in March 2010 and the absence of favorable 2009 tax items.

During the first quarter of 2010, Exxon Mobil Corporation purchased 37 million shares of its common stock for the treasury at a gross cost of $2.5 billion. These purchases included about $2 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. Shares outstanding were reduced from 4,727 million at the end of the fourth quarter to 4,698 million at the end of the first quarter. Second quarter 2010 share purchases are expected to continue at a pace of about $2 billion. However, total purchases for the quarter may be less due to trading restrictions during the proxy solicitation period for the XTO merger. 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.

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Exxon,April 28, 2010;