• 4 minutes Tariffs to derail $83.7 Billion Chinese Investment in West Virginia
  • 9 minutes Battle for Oil Port: East Libya Forces In Full Control At Ras Lanuf
  • 17 minutes Kaplan Says Rising Oil Prices Won't Hurt US Economy
  • 24 mins Battle for Oil Port: East Libya Forces In Full Control At Ras Lanuf
  • 33 mins Saudi Arabia plans to physically cut off Qatar by moat, nuclear waste and military base
  • 16 hours Corruption On The Top: Netanyahu's Wife Charged With Misuse of Public Funds for Meals
  • 2 hours Why is permian oil "locked in" when refineries abound?
  • 5 hours Saudi Arabia turns to solar
  • 9 hours Russia's Energy Minister says Oil Prices Balanced at $75, so Wants to Increase OPEC + Russia Oil by 1.5 mbpd
  • 4 hours Teapots Cut U.S. Oil Shipments
  • 21 hours Gazprom Exports to EU Hit Record
  • 4 hours Oil prices going down
  • 5 hours Hot line, Macron: Phone Calls With Trump Are Like Sausages Best Not To Know What Is Inside
  • 18 hours U.S. Withdraws From U.N. Human Rights Council
  • 5 hours Putin Says 'Fierce' U.S. Politics Hindering Summit With Trump
  • 22 hours OPEC Meeting Could End Without Decision - Irony Note Added from OPEC Children's Book
  • 21 hours Could oil demand collapse rapidly? Yup, sure could.
  • 21 hours Sell out now or hold on?
  • 20 hours What If Canada Had Wind and Not Oilsands?
Irina Slav

Irina Slav

Irina is a writer for the U.S.-based Divergente LLC consulting firm with over a decade of experience writing on the oil and gas industry.

More Info

Trending Discussions

Exxon Books 38% Lower Earnings In Q3, Blames Refining Margins

Rig Bakken

ExxonMobil reported earnings of US$2.65 billion for the third quarter of the year, or US$0.63 per share, largely in line with analyst expectations. The positive result reaffirmed the company’s reputation as one of the most stable Big Oil players.

In its financial report, the company noted that the annual drop in earnings from US$4.2 billion for the third quarter of 2015 was caused by lower refining margins and chronically depressed oil and gas prices, despite the pickup in crude over the last few months.

Even so, Exxon’s downstream business fared much better than its upstream operations. While earnings from exploration and production stood at US$620 million, chemicals and downstream operations contributed US$2.4 billion combined.

A recent report from the Institute for Energy Economics and Financial Analysis, however, warned that Exxon is suffering from fundamental weaknesses in its financials, which could spell an “irreversible decline” for the world’s top public E&P.

The report’s author, IEEFA’s director of finance, Tom Sanzillo, notes that Exxon has seen a 45-percent drop in its revenues over the past five years, accompanied by cuts on capex, declines in cash balances at the end of each year, and shrinking cash flows.

What’s more, Exxon has become increasingly dependent on long-term debt to maintain its dividend policy, the sacred cow of energy companies. Related: The Beginning Of The End For Europe’s Natural Gas War

One analyst, Bob Litterman, who used to be the chief of risk management at Goldman Sachs, commented that Exxon is taking unjustified risks by focusing on large-scale projects in expensive areas, such as oil sands, the Arctic, and deepwater deposits, while there is cheap oil supply coming to the market from elsewhere.

Truth be told, Exxon has put its Arctic ambitions on hold, exiting Canada’s Arctic projects last year and now being forced to stay out of the Russian Arctic, where it partnered with Rosneft, because of the U.S. and EU sanctions against the energy business of the country.

The company is even considering action with regard to climate change as it becomes increasingly aware that some of its large shareholders are expecting this, in addition to the regular flow of dividends.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:




Back to homepage

Trending Discussions


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News