Exxon to narrow its focus on most promising oil plays, announces Q4 impairment
Exxon Mobil Corp. (XOM) said late Monday it will focus on a few of its near-term, oil-rich assets that show more promise, including developments in Texas's Permian Basin and in South America, as it looks to prioritize between $16 billion and $19 billion in capital and exploration investments next year and between $20 billion and $25 billion annually through 2025. The company will leave behind some natural-gas plays in the U.S., Canada and Argentina that it called "less strategic." That is going to lead to an after-tax fourth-quarter impairment between $17 billion and $20 billion, the energy giant said. "Continued emphasis on high-grading the asset base - through exploration, divestment and prioritization of advantaged development opportunities -- will improve earnings power and cash generation, and rebuild balance sheet capacity to manage future commodity price cycles while working to maintain a reliable dividend," Chief Executive Darren Woods said in a statement. Woods sounded optimistic about the fourth quarter, saying that "the business environment" was showing "signs of improvement" despite the resurgence in COVID-19 cases and economic restrictions. "Prices and margins for many of our businesses have improved from the third quarter and when coupled with continuing efforts to reduce spending and capture additional efficiencies, quarter-to-date cash flow has improved versus our plan assumptions," he said. Exxon is likely to report fourth-quarter earnings in late January, with analysts polled by FactSet expecting an adjusted profit of one penny a share on sales of $47 billion in the quarter.
-Claudia Assis; 415-439-6400; AskNewswires@dowjones.com
(END) Dow Jones Newswires
November 30, 2020 17:03 ET (22:03 GMT)
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