ExxonMobil Corp. reported fourth-quarter 2016 earnings of $1.7 billion, including an asset impairment charge of about $2 billion mainly related to dry gas operations with undeveloped acreage in the Rocky Mountains region of the US.
The results were down from the $2.8 billion posted in fourth-quarter 2015. Also impacting the results were higher liquids realizations partly offset by weaker refining margins.
Full-year 2016 earnings were $7.8 billion compared with $16.2 billion a year earlier, reflecting lower commodity prices and refining margins.
Fourth-quarter capital and exploration expenditures of $4.8 billion were down 35% from fourth-quarter 2015. Full-year capital and exploration expenditures of $19.3 billion were down 38% from 2015.
Impairment sinks upstream
Upstream earnings were a loss of $642 million in the quarter. Excluding the impairment charge, earnings were $1.4 billion, up $528 million from fourth-quarter 2015. Higher liquids realizations partially offset by lower gas realizations increased earnings by a net $510 million.
Production of 4.1 million boe/d was down 127,000 boe/d compared with fourth-quarter 2015. Liquids production totaled 2.4 million boe/d, down 97,000 boe/d for fourth-quarter 2015 as field decline and lower entitlements were partly offset by increased project volumes, notably in Nigeria and Indonesia. Natural gas production was 10.4 bcfd, down 179 MMcfd from fourth-quarter 2015 as higher project volumes were more than offset by field decline and lower entitlements.
US upstream earnings were a loss of $2.3 billion in the quarter, including the $2-billion impairment. Excluding the charge, earnings were a loss of $301 million, an improvement of $237 million from fourth-quarter 2015. Non-US upstream earnings were $1.7 billion, up $291 million from the prior year period.
Downstream drop
Downstream earnings were $1.2 billion, down $110 million from fourth-quarter 2015. Weaker refining and marketing margins decreased earnings by $570 million, while favorable volume and mix effects increased earnings by $200 million. All other items increased earnings by $260 million as gains from divestments in Canada were partly offset by higher maintenance expense and unfavorable foreign exchange impacts.
Earnings from the US downstream segment reached $270 million, down $165 million from fourth-quarter 2015. Non-US downstream earnings of $971 million were $55 million higher than the prior year.
Chemical earnings of $872 million were $91 million lower than fourth-quarter 2015. Margins decreased earnings by $10 million. Volume and mix effects decreased earnings by $30 million. All other items decreased earnings by a net $50 million due to unfavorable inventory effects.
US chemical earnings of $352 million were $168 million lower than fourth-quarter 2015. Non-US chemical earnings of $520 million were $77 million higher than the prior year.