Exxon Mobil hit as price of gas and oil tumble

 
City A.M. Reporter
EXXON Mobil, the world’s largest publicly traded oil company, posted lower-than-expected quarterly earnings yesterday as its oil and gas output sagged and weak margins hurt its chemicals business.

Weaker global oil prices have weighed on earnings across the sector and Exxon also felt the sting of decade-low US natural gas prices, especially in the United States where it is the largest producer of the fuel.

The company, which has pledged to spend a record $37bn this year as it brings new projects on line in countries including Canada, Papua New Guinea and the Gulf of Mexico said oil and gas output fell 5.6 per cent to 4.15m barrels oil equivalent per day during the quarter.

Exxon is hoping those new projects will boost its long-term oil and gas output.

The Texas-based company reported a second-quarter profit of $15.9bn, or $3.41 per share, up from $10.68bn, or $2.18 per share, a year earlier. Profit was boosted by a $7.5bn gain related to the sale of a stake in its Japanese refining and chemicals business, and tax items.

Excluding those one-time gains, Exxon earned $8.4bn, or $1.80 per share. Exxon’s earnings from US oil and gas production fell by more than half in the second quarter to $678m, largely due to the steep decline in prices of natural gas.