Company - - Feb 01,2017
Exxon Mobil, the world’s largest openly listed oil & gas company, annual profits dropped by 51% last year.
On Tuesday, Exxon Mobil (XOM) revealed that there has been a tremendous decline of 51% in its fourth-quarter profits.
Exxon Mobil crossed out $2bn from the value of undeveloped gas fields located in the Rocky Mountains in the US. Moreover, the firm also blamed the profit slump on depressed oil and natural gas prices for the past two years.
Darren Woods, who became CEO after Tillerson bowed out to become secretary of state, accused the “prolonged downturn in commodity prices."
Woods added, financial results for the year were adversely impacted by the prolonged drop in commodity prices as well as an impairment charge.
Despite the unsatisfactory results from the last three months, there are indications that Exxon may have initiated to turn the corner. It was noted that for the first time since mid-2014, the company’s revenue didn't decline last quarter. But the 2% knock in revenue to $61 billion was less than what was anticipated by the Wall Street.
It was also revealed, the firm’s shareholders received $12.5bn in dividends for 2016.
The gas field cancellation is partly an answer to pressure from the US authorities based on the Securities and Exchange Commission (SEC).
Under Rex Tillerson, Exxon was gentle to take advantage of the surge of fresh U.S. oil resources as it concentrated more on mega deals overseas. However, earlier in January Exxon bought $5.6 billion of assets in a New Mexico sector of the Permian Basin, known as the hotbed of shale oil development.
Oil prices have approximately doubled since bottoming last February at $26 a barrel. But they still remain about half of their 2014 highest due to a constant supply glut caused mainly by the U.S. shale oil boom.