It’s no secret that times are tough for the oil industry, with prices declining significantly over the last year-and-a-half. Periods like these, however, do a better job of revealing how well a company runs its business than when prices are high.
So with that in mind I will note that yesterday ExxonMobil announced earnings for the 4th quarter, helping to close the books on what many in the industry would agree has been a year of difficult market conditions.
How did ExxonMobil do?
We posted earnings of $2.8 billion for the 4th quarter, and earnings of $16.2 billion for 2015 overall.
While these numbers are down compared to recent years, we are proud of our performance given the strong headwinds against which everyone in our industry is pushing.
$137 million per day contribution to the American economy
I’ll note that even in the low-price environment, we still make a substantial contribution to the American economy – about $137 million per day. This $50 billion direct annual contribution to the U.S. economy includes capital and operating expenditures, taxes, and returns to U.S. shareholders. Of course, this contribution doesn’t reflect our indirect contribution in terms of the value that we bring to consumers.
Commitment to fundamentals
Taken together, what these numbers show is that ExxonMobil’s focus on business fundamentals is helping ensure that our long-term investments are durable at low prices. We believe this business model helps differentiate us from our competitors.
What are the elements of this model? They include disciplined project execution, effective cost management and spending reductions, an integrated business model across the value chain, and a long-term approach to investing through the commodity price cycle.
A dedication to these ideas resulted in ExxonMobil completing six major Upstream projects during the course of 2015 in Canada, Indonesia, Norway, the United States, and West Africa. These added 300,000 oil-equivalent barrels per day of working interest production capacity. Overall our oil-equivalent production increased 3.2 percent in 2015. We’ve also made strategic investments in our refining and chemical businesses to better position them to capture future opportunities.
A focus on the future
In 2015 we spent $31 billion to explore for and develop new supplies of energy. Our capital expenditures for 2016 will decline, in part because we’ve completed a series of major projects over the past couple of years but also as a commitment to live within our means in a challenging business environment. We have the financial flexibility to continue to look for new opportunities to grow our business and to build shareholder value.
For anyone interested in a deeper dive into our earnings, I would advise you to check out a webcast featuring Jeff Woodbury, ExxonMobil’s vice president for investor relations.