ExxonMobil’s second-quarter earnings fall 59%

ExxonMobil Corp. reported second-quarter earnings of $1.7 billion, down from $4.2 billion in second-quarter 2015 due to lower commodity prices and weaker refining margins. First-half earnings totaled $3.5 billion, a decline from $9.13 billion in first-half 2015.

Upstream earnings during the quarter were $294 million, down $1.7 billion from second-quarter 2015. Lower liquids and gas realizations decreased earnings by $2.2 billion.

Production volumes were virtually unchanged at 4 million boe/d. Liquids production growth from recent start-ups more than offset the impact of field decline and downtime events, notably in Canada and Nigeria.

Liquids production during the quarter totaled 2.3 million b/d, up 39,000 b/d from a year earlier. Project ramp-up was partly offset by field decline and downtime mainly resulting from the Canadian wildfires. Natural gas production was 9.8 bcfd, down 366 MMcfd from second-quarter 2015 including field decline and divestment impacts.

US upstream earnings in the quarter declined $467 million year-over-year to a loss of $514 million. Non-US upstream earnings were $808 million, down $1.3 billion from the prior year.

Downstream earnings in the quarter were $825 million, down $681 million from second-quarter 2015. Weaker refining margins decreased earnings by $850 million while favorable volume and mix effects increased earnings by $130 million.

Chemical earnings in the quarter were $1.2 billion, reflecting continued benefits from gas and liquids cracking as well as growing product demand. The firm’s downstream segment earned $825 million in the quarter despite significantly lower global refining margins versus the prior year quarter.

Second-quarter capital and exploration expenses were reduced by 38% to $5.2 billion. First-half capital and exploration expenditures were $10.3 billion, down 36% from the 2015 total.

ExxonMobil last week agreed to acquire all outstanding shares of Papua New Guinea gas producer InterOil Corp. for more than $2.5 billion (OGJ Online, July 21, 2016).

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