Exxon Mobil Corporation (ticker: XOM) reported 2017 earnings of $19.7 billion, compared to $7.8 billion in 2016 – this represents a 151% increase. Non-cash asset impairments of $1.5 billion were recorded during the year, mainly due to upstream assets.
Q4 2017 earnings were $8.4 billion. Earnings excluding U.S. tax reform and impairments were $3.7 billion, which is down 2% compared with the prior-year quarter. U.S. tax reform in Q4 led to a non-cash earnings gain of $5.9 billion.
“The impact of tax reform on our earnings reflects the magnitude of our historic investment in the U.S. and strengthens our commitment to further grow our business here,” said Darren W. Woods, chairman and CEO. “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.”
ExxonMobil is investing billions of dollars to increase oil production in the Permian Basin in West Texas and New Mexico. The company will expand existing operations, enhance infrastructure and build new manufacturing sites.
According to the February 2018 investor presentation, Exxon plans to ramp up drilling in the Permian and Bakken. The company is looking to increase its rig count by 10, reaching 36 by the year’s end. As seen with other major companies, Exxon plans to optimize lateral length and improve completion designs.
Q4 2017 rundown – 4 MMBOPD produced
- Cash flow from operations and asset sales was $8.8 billion, including proceeds associated with asset sales of $1.4 billion
- Capital and exploration expenditures were $9 billion, including acquisitions in Mozambique and Brazil
- Oil-equivalent production was 4 MMBOPD in Q4 2017
- The company distributed $3.3 billion in dividends to shareholders
FY 2017 summary
- Hurricane Harvey reduced earnings by $250 million
- Cash flow from operations and asset sales was $33.2 billion, including proceeds associated with asset sales of $3.1 billion
- Capital and exploration expenditures were $23.1 billion, up 20% from 2016
- Oil-equivalent production was 4 MMBOPD for 2017
More projects, more production
The company started the Odoptu Stage 2 project on schedule. The project has increased the Odoptu field production capacity to nearly 65,000 BPD and will help maintain Sakhalin-1 production levels, Exxon said.
ExxonMobil, together with its partners Abu Dhabi National Oil Company and INPEX Corporation, announced an agreement to increase production capacity from the Upper Zakum oil field to 1 MMBOPD by 2024. Under the agreement, ExxonMobil and INPEX Corporation have also been granted a 10-year extension for the Upper Zakum concession.
The company recently discovered its sixth oil reservoir in offshore Guyana since 2015. ExxonMobil affiliate Esso Exploration and Production Guyana Ltd. began drilling the Ranger-1 well on November 5, 2017 and encountered approximately 230 feet (70 meters) of oil-bearing carbonate reservoir. The well was safely drilled to 21,161 feet (6,450 meters) depth in 8,973 feet (2,735 meters) of water.
ExxonMobil also started production at the Hebron project. The project was revealed in back in 2013 and the capital cost for the project is estimated to be around $14 billion. Discovered in 1980, the Hebron field is estimated to contain more than 700 million barrels of recoverable resources.
Upstream
Q4 upstream earnings were $8.4 billion, including $7.1 billion from U.S. tax reform and asset impairments of $1.3 billion. Fourth quarter earnings excluding U.S. tax reform and impairments increased $1 billion, to $2.5 billion.
