U.S. oil giant ExxonMobil has posted an estimated first quarter 2020 loss of $610 million, compared with earnings of $2.4 billion a year earlier. It will also cut US$10 billion from its planned full-year capital expenditure.
ExxonMobil said that in response to market conditions it will be reducing 2020 capital spending by 30 per cent and cash operating expenses by 15 per cent. Capex is now expected to be approximately $23 billion for the year, down from the previously announced guidance of $33 billion.
“COVID-19 has significantly impacted near-term demand, resulting in oversupplied markets and unprecedented pressure on commodity prices and margins,” said Darren W. Woods, chairman and chief executive officer. “While we manage through these challenging times, we are not losing sight of the long-term fundamentals that drive our business. Economic activity will return, and populations and standards of living will increase, which will in turn drive demand for our products and a recovery of the industry.”
ExxonMobil stated that its capital allocation priorities remain unchanged. The company’s objective is to continue investing in industry-advantaged projects to create value, preserve cash for the dividend, and make appropriate use of its balance sheet.
“Our company remains strong and we will manage through the current market downturn as we have for decades,” said Woods. “Today’s circumstances are certainly unique, but our people have the experience, our business has the scale, and we have the financial strength to see us through and emerge stronger than ever.”
Exxon did report that oil-equivalent production was 4 million barrels per day, up 2 per cent from the first quarter of 2019, with a 7 per cent increase in liquids partly offset by a 5 percent decrease in gas. Excluding entitlement effects and divestments, oil-equivalent production was up 5 per cent from the prior year, with Upstream liquids production up 9 per cent on growth in the Permian and Guyana.