XOM Exxon Mobil Corp

By Robb M. Stewart

Exxon Mobil Corp. said Tuesday oil-equivalent production in the fourth quarter was 3.7 million barrels a day, consistent with the third quarter of 2020, while natural gas volumes decreased 2%, driven by reduced entitlements.

On 4Q output:

Excluding entitlement effects, divestments and government mandates, Exxon said liquids production increased 5%, while natural gas volumes increased 2%.

During the quarter, production volumes in the Permian averaged 418,000 oil-equivalent barrels a day, an increase of 42% from the prior year. Full-year 2020 production averaged 367,000 oil-equivalent barrels a day.

"The past year presented the most challenging market conditions Exxon Mobil has ever experienced," said Darren Woods, chairman and chief executive. "While the effects of the pandemic significantly impacted our 2020 results, our previously executed strategic initiatives and reorganizations enabled us to respond decisively to permanently improve our cost structure, drive greater efficiencies across our businesses, and emerge a stronger company."

On upstream:

Average realizations for crude oil were in line with the third quarter. Natural gas realizations rose by 39% in the quarter, reflecting market supply disruptions and seasonal demand, it said.

"Upstream full-year 2020 reliability matched best-ever performance with focus on best-in-class operations."

On downstream:

Exxon said its downstream operations delivered full-year cost reductions in line with revised targets, and achieved best-ever personnel safety, process safety and reliability performance.

Industry fuels margins improved slightly from the third quarter, but remained near historic lows driven by market oversupply and high product inventory levels, it said.

"Lubricants delivered strong fourth quarter and full-year performance underpinned by improved margins and cost control, despite pandemic-related challenges."

On chemical:

"Fourth-quarter earnings of $691 million represent the best quarterly result since 2018, underpinned by strong safety and operational performance, and advantages from integration with refining. Chemical also achieved best-ever full-year 2020 personnel safety, process safety, and reliability performance."

Exxon said chemical sales volumes were even with the third quarter, while industry margins strengthened on continued strong packaging demand, automotive and durables market recovery and industry supply disruptions.

"Achieved record full-year polyethylene sales driven by strong performance from recent investments and growing demand for the company's high-value performance products."

On forward plans:

Exxon said it expects additional annual structural operating expense reductions of $3 billion by 2023, resulting in total annual structural reductions of $6 billion versus 2019.

Cash flow this year is expected to cover capex and maintain dividend and strong balance sheet. "Assumptions include Brent prices of $50 per barrel and lowest annual downstream and chemical margins during 2010-2019; portfolio flexibility enables further adjustments."

Write to Robb M. Stewart at robb.stewart@wsj.com

(END) Dow Jones Newswires

February 02, 2021 12:39 ET (17:39 GMT)

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