Exxon Mobil Corp. (NYSE:XOM) posted its steepest annual profit decline in more than a decade after deeper-than-planned spending cuts failed to offset the impact of crumbling crude and natural gas prices. The stock dropped almost 2 percent.
Exxon is the only super-major oil company so far to report better-than-expected fourth-quarter results amid the worst energy market downturn in a generation. BP Plc posted a $6.5 billion annual loss earlier Tuesday, the biggest in at least 30 years. Chevron Corp. posted its first quarterly loss since 2002 on Jan. 29. The losses come as oil fell 39 percent in the past 12 months.
Exxon shrank spending on drilling, floating platforms and gas-export terminals by 20 percent last year to $31 billion, a bigger cut than the 12 percent reduction forecast by management during the company’s annual strategy presentation in March. Capital spending will be slashed another 25 percent this year to $23.3 billion, Exxon said.
A $538 million loss in the company’s U.S. oil and gas business was cushioned by a near doubling in profit from Exxon’s refineries, according to the statement. Output from wells jumped 4.8 percent worldwide even as the company cut gas production throughout the Americas and Europe.
Exxon said it’s halting share buybacks during the current quarter after spending half a billion dollars on them in the final three months of 2015.
The benchmarks for international crude and U.S. gas both dropped 42 percent during the final three months of 2015 as global production continued to overwhelm demand. Oil is trading below $35 a barrel.
Brent crude futures averaged $44.69 a barrel during the fourth quarter, compared with $77.07 a year earlier, according to data compiled by Bloomberg. U.S. gas averaged $2.235 per million British thermal units during the period, down from $3.829 a year earlier. Oil and liquid byproducts comprise about 60 percent of output from Exxon’s wells; the rest is gas.