Exxon Mobil Stock (NYSE:XOM)
Lower crude oil and natural gas realizations hurt Exxon Mobil's (NYSE:XOM) performance in the first quarter. However, the company posted record-high and above Wall Street projections adjusted profits. Revenues were down 4% year over year. As a result, Exxon Mobil stock surged.
First quarter net income increased by more than 100% to $11.43 billion, or $2.79 per share, from $5.48 billion, or $1.28 per share, in the first quarter of 2022. However, first-quarter net income decreased by more than 10% from $12.75 billion, or $3.09 per share, in the fourth quarter of 2022 due to lower liquids and natural gas realizations, the absence of favorable mark-to-market impacts on unsettled derivatives, and higher scheduled maintenance.
With a 40% increase from the Permian Basin and Exxon (XOM) starting up a second production platform in Guyana last year, oil and gas net output was 3.83M boe/day, up 4.2% Y/Y and approximately flat compared to Q4 2022. This was due to an increase of 240K bbl/day.
The higher production levels largely mitigated the oil price decline of 16% from a year earlier.
Earnings from the Upstream business dropped 21% Q/Q to $6.45B due to weaker prices, which impacted realizations of crude oil (-10%) and natural gas (23%), as well as derivatives (-$2B).
Increases in volume and mix, the commencement of the Beaumont refinery expansion, and the lack of adverse prior-quarter unsettled derivatives all contributed to a 2.7% increase in Energy Products sector profits Q/Q, to $4.18B.
The corporation has already saved $7.2 billion in structural costs and expects to reach its $9 billion goal by the end of 2023.
According to CFO Kathryn Mikells, Exxon Mobil stock is in no hurry to leverage its $32.7B cash hoard for mergers or acquisitions.
The Wall Street Journal reported earlier this month that preliminary conversations occurred regarding a prospective transaction between Exxon and Pioneer Natural Resources.
The Uaru development is Exxon's sixth offshore Guyana project. The company stated Thursday that a final investment decision has been made. The development is estimated to add 250K boe/day of gross capacity, and its start-up is scheduled for 2026.
Featured Image: Unsplash @ Raymond Kotewicz