• 3 days Nuclear Bomb = Nuclear War: Saudi Arabia Will Develop Nuclear Bomb If Iran Does
  • 2 days Statoil Changes Name
  • 3 days Tillerson just sacked ... how will market react?
  • 2 days Russian hackers targeted American energy grid
  • 1 day Is $71 As Good As It Gets For Oil Bulls This Year?
  • 3 days Petrobras Narrows 2017 Loss, Net Debt Falls Below $85bn
  • 3 days Proton battery-alternative for lithium?
  • 2 days Ford Recalls 1.38 Million Vehicles (North America) For Loose Steering Wheel Bolt
  • 1 day Oil Boom Will Help Ghana To Be One Of The Fastest Growing¨Economies By 2018!
  • 2 days Country With Biggest Oil Reserves Biggest Threat to World Economy
  • 2 days I vote for Exxon
  • 2 days HAPPY RIG COUNT DAY!!
  • 3 days UK vs. Russia - Britain Expels 23 Russian Diplomats Over Chemical Attack On Ex-Spy.
  • 3 days Why is gold soooo boring?
  • 3 days South Korea Would Suspend Five Coal - Fire Power Plants.
  • 1 day Spotify to file $1 billion IPO
Alt Text

Another Oil-Backed Cryptocurrency Launches

A New York-based investment company…

Alt Text

The Truth About U.S. Energy Dominance

Recent headlines suggest that the…

Alt Text

Shell Takes Major Steps Toward Energy Diversification

Supermajor Royal Dutch Shell has…

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