• 4 minutes Pompeo: Aramco Attacks Are An "Act Of War" By Iran
  • 7 minutes Who Really Benefits From The "Iran Attacked Saudi Arabia" Narrative?
  • 11 minutes Trump Will Win In 2020
  • 15 minutes Experts review Saudi damage photos. Say Said is need to do a lot of explaining.
  • 7 hours Ethanol is the SAVIOR of the Oil Industry, Convenience Store Industry, Automotive Supply Chain Industry and Much More!
  • 1 hour Ethanol, the Perfect Home Remedy for A Saudi Oil Fever
  • 6 hours Instagram Now Banning Photos Of People At Gun Ranges, Claiming They Promote "Violence"
  • 2 hours Let's shut down dissent like The Conversation in Australia
  • 2 hours Pepe Escobar: “How The Houthis Overturned The Chessboard”
  • 12 hours Famous Manufacturer of Anti-Ethanol Additives Proves Ethanol's Safety and Benefits
  • 18 hours Collateral Damage: Saudi Disruption Leaves Canada's Biggest Refinery Vulnerable
  • 1 day Hong Kong protesters appeal to Trump for support.
  • 1 day Saudi State-of-Art Defense System looking the wrong way. MBS must fire Defense Minister. Oh, MBS is Defense Minister. Forget about it.
  • 14 hours Trump Accidentally Discusses Technology Used In The Border Wall
  • 9 hours US and China are already in a full economic war and this battle for global hegemony is a little bit frightening
  • 15 hours One of the fire satellite pictures showed what look like the fire hit outside the main oil complex. Like it hit storage or pipeline facility. Not big deal.
Irina Slav

Irina Slav

Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.

More Info

Premium Content

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

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:




Download The Free Oilprice App Today

Back to homepage



Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play