Exxon posts first annual loss of US$22.4 billion

Exxon posts first annual loss of US$22.4 billionRivals BP, Chevron posted annual losses as well Exxon's oil and gas output were 3.7 million barrels of oil and gas per day in the quarter, down 8% compared with a year earlier. JENNIFER HILLER

Exxon Mobil Corp on Tuesday posted its first annual loss as the Covid-19 pandemic hammered energy prices and reduced the value of its shale gas properties by more than US$20 billion.

Exxon last year slashed spending on new projects by nearly a third, outlined plans to cut up to 15% of its workforce while adding US$21 billion to its debt to cover its spending and restructuring.

The changes come amid "the most challenging market conditions Exxon has ever experienced," said Chief Executive Darren Woods, and over time will cut costs by US$6 billion a year compared to 2019.

The company reported a net annual loss of US$22.4 billion for 2020, on the write down and losses in oil production and refining, compared with a full-year profit of US$14.34 billion in 2019.

Other oil majors posted losses for the year as pandemic-related travel restrictions cut fuel demand and triggered huge write downs. Rivals BP and Chevron posted annual losses.

Figures

Exxon posted a net loss of US$20.2 billion, in the fourth-quarter ended Dec. 31, compared with a profit of US$5.69 billion a year ago.

Excluding the impairment and other charges, the company earned 3 cents per share, beating analysts' average expectation of a one-cent gain, according to Refinitiv IBES data.

"The turnaround story will take some time," said Biraj Borkhataria, analyst with RBC Capital Markets, noting that the company is not yet covering its dividend and capital spending with cash from operations.

Exxon's oil and gas output were 3.7 million barrels of oil and gas per day in the quarter, down 8% compared with a year earlier.

Exploration and production, Exxon's largest business, lost US$18.5 billion in the fourth quarter on the natural gas asset impairments, compared with a profit of US$6.1 billion the year prior. -Nampa/Reuters