Exxon banks US$19.5B in six months citing “record performance” in Guyana 

Jul 29, 2023 ExxonMobil, News, Oil & Gas

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– reveals plans to up production at two Liza ships beyond 400,000 barrels a day

Kaieteur News – ExxonMobil Corporation, an American multinational, revealed that it achieved a profit of US$7.9 billion or US$1.94 per share in the second quarter of 2023. This figure marks a significant decline of US$3.7 billion compared to its earnings of US$11.6 billion in the first quarter.

Comparing the performance to the second quarter of 2022, the decline in profits is even more pronounced, as the company had earned an additional US$10 billion during that period, totaling US$17.9 billion.

The decrease in profits during the second quarter of 2023 was attributed to lower natural gas realizations and industry refining margins, as stated by Exxon during its earnings call.

Despite the dip in profits, the company still managed to accumulate a substantial US$19.5 billion in earnings for the first half of 2023.

Regarding cash flow from operations, Exxon reported a total of US$9.4 billion. The company’s capital and exploration expenditures were US$6.2 billion in the second quarter and US$12.5 billion for the first half of 2023, in line with its full-year guidance of US$23 billion to US$25 billion.

The second-quarter shareholder distributions amounted to US$8.0 billion, which included US$4.3 billion used for share repurchases and US$3.7 billion for dividends.

ExxonMobil Corporation also declared a third-quarter dividend of US$0.91 per share, payable on September 11, 2023, to shareholders of Common Stock on record as of August 16, 2023.

CEO Darren Woods expressed his satisfaction with the quarter’s performance, highlighting that it was twice as high as the earnings in the second quarter of 2018 under comparable industry commodity prices. He attributed this doubling of earnings to the company’s efforts in reshaping its business portfolio, investing in advantageous projects, and enhancing efficiency and effectiveness.

Furthermore, Woods emphasized that these achievements also demonstrate the company’s progress in addressing the dual challenge of meeting the world’s energy and essential product needs while reducing emissions.

During the earnings call, ExxonMobil’s Senior Vice President, Kathy Mikells, was keen to highlight the outstanding performance of the company’s advantageous projects in Guyana and the Permian, USA. She emphasized that these projects made significant contributions to the company’s strong volume performance during the second quarter of 2023.

Discussing Exxon’s Upstream businesses, the Chief Financial Officer (CFO) reported that the Permian production achieved a remarkable record, producing approximately 620,000 oil equivalent barrels a day (oebd). Meanwhile, Guyana achieved a record gross production of 380,000 barrels of oil per day. Mikells pointed out that, compared to the same quarter last year, Exxon’s global supply received a boost of around 90,000 oebd from the growth in Guyana and the Permian, effectively compensating for natural depletion. The CFO also mentioned that this net growth helped counterbalance the impact of divestments in Russia.

Furthermore, the CFO revealed Exxon’s strategic efforts to enhance competitiveness by expanding low-cost-of-supply assets and divesting non-strategic, mature assets. She highlighted that the volumes from the Permian and Guyana yielded double the unit earnings compared to the volumes from assets divested in the previous year. Liquid volumes saw a 2% increase in comparison to the second quarter of 2022, largely driven by growth in Guyana and the Permian. However, gas volumes decreased by 12%, primarily due to divestments.

Mikells underscored that the additional barrels produced in Guyana and the Permian not only have cost advantages but also exhibit some of the lowest-carbon intensity within Exxon’s portfolio. This she said reflects the company’s commitment to sustainability and responsible environmental practices.

Exxon’s CEO, Darren Woods, expressed high praise for the outstanding performance delivered by Guyana and the Permian. He stated that Exxon anticipates achieving an average Permian production of approximately 600,000 oil-equivalent barrels per day in 2023. Looking further ahead, the company expects Permian production to escalate to about 1 million oil-equivalent barrels per day by 2027.

Regarding Guyana, Woods highlighted the projected increase in production. He stated that Exxon envisions the potential to raise the combined gross capacity of the Liza Destiny and Liza Unity FPSOs to over 400,000 barrels of oil per day through further debottlenecking. This represents an almost 20% increase above the initial investment basis, which he considers a testament to the ingenuity of their workforce.

Notably, Guyana’s Stabroek Block has already yielded over 11 billion barrels, and Exxon’s Executives are confident that the company’s Upstream business is well-positioned to meet the surging demand for oil and natural gas.

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