HOUSTON: ExxonMobil Corp on Thursday (Jan 4) signalled a big hit to fourth-quarter results from an about US$2.5 billion (RM11.59 billion) writedown of California assets and as lower energy prices reduced operating profits.
The largest US oil producer said it expects to take a US$2.4 billion to US$2.6 billion impairment to oil and gas properties off the coast of Southern California.
“Continuing challenges in the state regulatory environment have impeded progress in restoring operations” at the company’s Santa Ynez facilities near Santa Barbara, the company said. It had previously disclosed the properties would be sold for about $643 million in a highly-leveraged deal to a startup company.
The writedown marks a continuation of the exits by large oil companies from the state over the relatively mature oilfields and the state’s environmental and regulatory policies.
Chevron in December blasted the state’s energy policies as having “made it a difficult place to invest” and leading it “reduce spending by hundreds of millions of dollars since 2022”.
Lower oil and gas prices last quarter will slash Exxon’s operating profits, a preliminary release of operating results showed. Oil and gas earnings will fall by US$400 million to US$800 million for the last three months of 2023, compared with the third quarter.
The company posted US$6.1 billion in upstream earnings for the third quarter ended Sept 30.
Full results are expected on Feb 2.
Brent prices in the fourth quarter averaged US$82.85, a 7% decrease compared to the same period last year and a 4% decline from the preceding third quarter.
The company’s earnings per share are projected to be US$2.09, according to 16 analysts consulted by financial firm LSEG, reflecting a 32% decrease from the year ago, and a 7% decrease from the third quarter. – Reuters
