From Sabrina Valle
HOUSTON (Reuters) – Exxon Mobil Corp on Thursday signaled a return to full year earnings for 2021 as higher oil and gas prices resulted in up to $ 1.9 billion in operating profits exceeding one-time charges.
The largest US oil producer released a snapshot of last quarter’s results showing that it expects sequentially higher profits from oil and gas production. Operating profits in refineries and chemicals will be unchanged or even lower, as a securities filing showed. Official results will be released on February 1st.
In 2020, Exxon suffered a historic loss of $ 22.4 billion from depreciation due to falling oil prices and lower refining margins. Cost reductions combined with increases in energy prices have enabled him to pay off debt and plan a share buyback program for the next year.
Analysts are forecasting adjusted earnings of $ 1.76 per share for the quarter, according to Refinitiv IBES data, compared to 3 cents per share excluding depreciation last year.
The regulatory notice filed on Thursday signaled one-time charges for asset depreciation and contract costs could cut oil and gas revenues by as much as $ 1.2 billion. It did not provide any information on the production facilities concerned.
Exxon also said lower margins on chemicals could cut results by $ 600 million to $ 800 million, compared to chemical profits of $ 2.14 billion in the third quarter. Refining margins could remain unchanged or decrease by $ 200 million from a profit of $ 1.23 billion in the previous quarter.
To offset the negative impact, Exxon reported mark-to-market gains of up to $ 1.1 billion in oil and gas and refined products. It also said the proceeds from the sale of assets, including the UK’s North Sea assets, could yield up to $ 500 million.
The brighter outlook allowed Exxon to extend planned spending of $ 20-25 billion per year on new projects through 2027, including $ 2.5 billion per year on carbon reductions, the company said, adding, it expects to double its annual profit before the pandemic by 2025. said the company.
About 60% of spending is in key growth areas such as US shale, Guyana, Brazil, LNG and chemical products.
Exxon’s shares fell 36 cents, or about 0.59%, on Thursday to close at $ 60.79. The stock is up 47% so far this year, but has fallen 33% over the past five years.
(Reporting by Sabrina Valle; Additional reporting by Ashwini Raj in Bengaluru; Editing by David Gregorio)