Is Exxon missing out on the oil boom?
Oil prices are booming, but this wasn’t reflected in Exxon Mobil’s latest results as energy giant missed expectations on earnings – although revenue was a slight beat.
Neil Hansen, vice president of investor relations and secretary, told investors Friday on a conference call that second-quarter earnings were “challenging” and “well below market expectations.”
Exxon earned 92 cents per share in the second quarter on revenue of $73.5 billion. Analysts polled by Thomson Reuters had expected earnings of $1.27 a share on revenue of $72.59 billion.
The company's quarterly oil-equivalent production was 3.6 million barrels per day, down 7% from the second quarter of 2017.
Capital and exploration expenditures jumped 69% year over year to $6.6 billion, which the company said reflected key investments in Brazil, the U.S. Permian Basin and Indonesia.
Hansen attributed the second-quarter results to a few factors, including weak gas demand in Europe, scheduled maintenance in Canadian oil sands projects and refining maintenance.
The company said it does not expect significant downstream maintenance in the third quarter, with Senior Vice President Neil Chapman saying that the second quarter was a low point in terms of volumes in upstream and downstream.
Chapman said volumes will steadily increase for the rest of the year. For all of 2018, average production will be about 3.8 million barrels of oil per day. This would be a decrease from last year when the company’s average production was 4 million barrels of oil per day.
When the company released its fourth-quarter 2017 earnings the company’s CEO announced that after tax reform they would strengthen their commitment to the U.S.
“We’re planning to invest over $50 billion in the U.S. over the next five years to increase production of profitable volumes and enhance our integrated portfolio, which is supported by the improved business climate created by tax reform,” said Darren Woods, chief executive officer.
In its second-quarter earnings release, the company noted that production in the Permian and Bakken basins was up 30 percent from same quarter last year.