Oil & gas giant ExxonMobil’s first quarter 2013 earnings announced today were up $50 million from first quarter 2012, but oil-equivalent production volumes decreased 3.5%. While upstream and downstream earnings were lower, the chemical division reported strong results, which helped balance the company’s overall financial and operational position.
“Upstream earnings were $7,037 million in the first quarter of 2013, down $765 million from the first quarter of 2012. Lower liquids realizations, partially offset by improved natural gas realizations, decreased earnings by $230 million,” the company said in a statement.
Liquids production totaled 2.2 million barrels per day, down 21,000 b/d from the first quarter of 2012, while first quarter natural gas production was 13,213 mmcf/d (millions of cubic feet per day), down 823 mmcf/d from 2012.
Regarding Exxon’s major projects, the Kearl oil sands development is progressing, though mitigating the effects of cold weather on personnel and equipment was mentioned as a challenge. Output of 110,000 barrels per day of bitumen is expected onstream later this year and the Kearl expansion is reportedly on schedule for 2015 startup.
The Telok gas field offshore Malaysia started production and the project is on schedule and within budget. Erha North Phase 2 offshore Nigeria was sanctioned, from which Exxon expects to recover 175 million barrels of oil.
Active exploration drilling is progressing in Tanzania and the US Gulf of Mexico – the company plans to drill “several” wildcat wells in the GOM this year, David Rosenthal, Vice President Investor Relations said on the earnings call.
In Russia, “Rosneft and ExxonMobil have agreed to expand their 2011 Strategic Cooperation Agreement to include approximately 600,000 square kilometers (150 million acres) of additional exploration acreage in the Russian Arctic and potential participation by Rosneft in the Point Thomson project in Alaska. They have also agreed to conduct a joint study on a potential LNG project in the Russian Far East,” according to a statement.
Exxon also acquired an additional 150,000 gross acres Liberia, giving the company a 500,000 total net acreage position in the African nation, which is a new entrant in Exxon’s global operational portfolio. The oil giant also grabbed exploration acreage in the US GOM during the most recent lease sale.
North American unconventional activity includes a liquids rich Canadian acreage position as a result of Exxon’s $3 billion Celtic acquisition. The company also reported having 10 rigs running in the Bakken and full integration of the Denbury assets acquired late last year.
Looking ahead, Rosenthal said the gas from Exxon’s major LNG projects coming onstream in the next few years is all sold out with contracts linked to crude oil prices, which should represent a steady source of cash flow over the medium to longer term.
