ExxonMobil Takes Big Hit in 2016 from Weak Prices, Heavy Impairment Charges

---

Researched by Industrial Info Resources (Sugar Land, Texas)--Lower prices for oil and other commodities, weaker refining margins and a single impairment charge caused Exxon Mobil Corporation's (NYSE:XOM) (Irving, Texas) full-year 2016 revenues and net income to come in significantly below 2015 levels. Industrial Info is tracking $104.6 billion in active projects related to ExxonMobil.

Net income for 2016 was reported to be $7.84 billion, a 51.45% decrease from 2015, while revenues stood at $226.09 billion, a 15.91% decrease. Executives said the company's core earnings actually grew, despite a 3% drop in production from 2015 to 4.1 million barrels per day (BBL/d). But ExxonMobil also recorded a $2 billion impairment charge related to dry gas operations in the Rocky Mountains region that have proved disappointing. Executives were quick to point out that net income would have increased about 33% without the one-time charge.

In an earnings conference call, investor relations chief Jeff Woodbury said that the company will announce a write down sometime in the next few weeks for most of the 4.6 billion barrels of reserves that it identified in the fourth quarter as being at risk of devaluation. Authorities, including the Securities and Exchange Commission, have been pressuring Exxon Mobil to acknowledge that the reserves demand a write-down, given their unprofitability amid weak commodity prices.

Capital and exploration expenditures were reported to be $19.3 billion, 38% lower than full-year 2015. Weak prices haven't caused ExxonMobil to shy away from big purchases, however. Recently, the company bolstered its position in the Permian Basin and announced new discoveries offshore Guyana. For more information, see January 13, 2017, article - ExxonMobil, Hess See Plenty of Promise in Offshore Projects in Guyana, Gulf of Mexico.

Executives said in a press release that when excluding the impairment charges, the company's Upstream segment demonstrated strong operational performance for the fourth quarter and the full year. Still, they acknowledged that the Downstream segment proved disappointing, citing weaker marketing and refining margins.

ExxonMobil is involved in two major downstream project proposals for Port Arthur, Texas, by gasoline refiner ZeoGas LLC (Houston, Texas): the $1.2 billion construction of a gas-to-liquids production plant and the $1.5 billion addition of a methanol unit, which will feature ExxonMobil's methanol-to-gasoline technology, as well as Air Liquide's (Paris, France) MegaMethanol process technology. As designed, the facility will have a natural gas-processing capacity of 21 million standard cubic feet per day, sourced from the Haynesville Shale, and a production capacity of 16,500 BBL/d of sulfur-free, ultra-low benzene gasoline. For more information, see Industrial Info's project reports on the gas-to-liquids facility and its methanol unit.

Not too far away, a $150 million gasoline hydrotreater addition at ExxonMobil's refinery in Beaumont, Texas, is under construction. The 40,000-BBL/d hydrotreater will use Scanfiner Design to reduce sulfur content in gasoline about 66%. For more information, see Industrial Info's project report.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.