ExxonMobil has reported a decline in its fourth-quarter (Q4) earnings of 2023, with figures showing a 40.1% drop to $7.63bn from the $12.75bn reported in the same period of 2022.  

The US oil and gas company’s results were impacted by unfavourable identified items, including a substantial $2bn impairment due to regulatory challenges in California. 

The oil and gas industry has seen a downturn in profits by roughly a third from the record highs of 2022, as prices fell following the initial surge caused by the conflict in Ukraine, reported Reuters.  

Exxon noted that the impairments were partly balanced by positive tax and divestment-related items. 

The company’s full-year earnings were $36bn, down from $55.74bn in 2022. 

Net production in 2023 was reported at 3.7 million oil-equivalent barrels per day (bpd).  

Excluding the effects of divestments and other factors, production saw an increase of 111,000bpd. 

Exxon said the combined production from the Permian and Guyana assets grew by 18% compared to 2022.  

The company’s capital and exploration expenditures for the last quarter stood at $7.75bn, culminating in a total of $26.3bn for the year, which was slightly above the anticipated range in the guidance. 

Exxon announced in October 2023 a merger agreement with Pioneer Natural Resources, valued at $59.5bn in an all-stock deal.  

This merger is anticipated to yield double-digit returns through more efficient resource recovery and expedited emissions reductions.  

Subject to regulatory and Pioneer shareholder approvals, the completion of this transaction is expected in Q2 2024. 

ExxonMobil chairman and CEO Darren Woods said: “Our consistent strategy and execution excellence across the business delivered industry-leading earnings and enabled us to return more cash to shareholders than our peers in 2023. 

“These results demonstrate the fundamental improvements we’ve made to our business, reflecting our progress in high-grading our portfolio through investments in advantaged projects and select divestments, while, at the same time, driving a higher level of efficiency and effectiveness throughout the business. The foundation of our success comes from the resiliency, hard work and commitment of our people.” 

This article was first published by MEED's sister publication Offshore Technology