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Irina Slav

Irina Slav

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

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Exxon Shocks As Oil Reserves Drop By A Third

ExxonMobil

Exxon slashed its oil reserves by almost a third in what is the most radical reserve revision in the company’s modern history.

The supermajor reported reserves totaling 15.3 billion barrels as of the end of 2020 in a regulatory filing, cited by Bloomberg. This compared with 22.44 billion barrels a year earlier.

The biggest chunk of “deleted” assets came from Canadian oil sands: Exxon removed almost all of its oil sands holdings from its books as of the end of last year. This, however, does not mean they are gone forever.

“Among the factors that could result in portions of these amounts being recognized again as proved reserves at some point in the future are a recovery in the SEC price basis, cost reductions, operating efficiencies, and increases in planned capital spending,” Exxon said in its filing.

Exxon, which earlier this year reported its first annual loss in four decades because of the pandemic, has, like its peers, re-prioritized its operations, focusing on high-return assets such as the Permian and Guyana, where Exxon has been making discovery after discovery. Meanwhile, it has been shedding what it considers non-essential assets.

The latest update in this respect was this week’s announcement Exxon would sell its production assets in the UK’s central and northern North Sea for a total of over $1 billion. The buyer was a private equity firm, Hitec Vision.

“We continue to high-grade our portfolio by divesting assets that are less strategic and focusing our investments on our advantaged projects that are among the best in the industry,” Neil Chapman, senior vice president of ExxonMobil, said.

“Our development plans that prioritize Guyana, the U.S. Permian Basin, Brazil and LNG are focused on increasing earnings potential and generating strong cash flow to fund future capital investments, reduce debt and maintain a reliable dividend.”

By Irina Slav for Oilprice.com

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  • Henry Hewitt on February 26 2021 said:
    Putting a price on Carbon would allow you to leave the Canadian 'reserves' on the book but at a more realistic price. The whole point of the SEC full disclosure doctrine, since 1933, has been to disclose fully, not just what you think your investors want to hear, or the Commission will let you get away with.

    We already know what we want to hear; you need to tell us what we need to hear.

    This increasing 'scarcity' in supply is probably what prompted Mr. Buffett to take the plunge. Supply & Demand is still law. But for how long will the demand be what he needs? Not as long as you think.

    EVs aren't going to eat your lunch as quickly as drones are, another name for 'autonomous vehicles'. Together they are beating out a death march. The beauty, or horror, depending on your perspective, is that these are 100x more efficient at bringing you what you want -- and right now.

    Unless you love to drive, why go?
    "Hal, bring me that Dr. Pepper at once."
    "Right away, Excellency."
    "Thank you Hal"

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