U.S. oil major ExxonMobil saw a 40 percent decrease in profit during the last quarter of 2016, compared to the year-before period, due to impairment charges.
Fourth quarter earnings were $1.7 billion, including the impairment charge recorded during the period, a 40 percent decrease compared to earnings of $2.78 billion in the same period in 2015.
Excluding the impairment charge, earnings of $3.7 billion were up from the $2.8 billion reported in the fourth quarter of 2015, due to higher liquids realizations partly offset by weaker refining margins.
The company’s earnings for 2016 were $7.8 billion. An asset recoverability review was completed in the fourth quarter and resulted in a U.S. Upstream asset impairment charge of about $2 billion mainly related to dry gas operations with undeveloped acreage in the Rocky Mountains region of the U.S. Excluding the impairment charge, full year earnings were $9.9 billion compared with $16.2 billion a year earlier, reflecting lower commodity prices and refining margins.
Exxon’s revenues increased during the quarter totaling $61.02 billion, compared to $59.8 billion in the corresponding period of 2015.
Upstream earnings were a loss of $642 million in the fourth quarter of 2016.
“Financial results for the year were negatively impacted by the prolonged downturn in commodity prices and the impairment charge,” said Darren W. Woods, chairman and chief executive officer.
ExxonMobil completed five major Upstream projects during the year in Australia, Kazakhstan and the U.S., adding 250,000 oil-equivalent barrels per day of working interest production capacity.
The company’s capital and exploration expenditures during the quarter were $4.8 billion, down 35 percent from the fourth quarter of 2015.
Oil-equivalent production was 4.1 million oil-equivalent barrels per day, with liquids down 3.9 percent and natural gas down 1.7 percent from the prior year.