Exxon Mobil Corp joined its rivals in reporting a 56% slump in second-quarter profit from a year ago, hurt by a drop in energy prices, in line with the midpoint of the company's earnings preview released earlier this month.
Oil majors' profits fell sharply in the quarter from record levels a year earlier as oil and gas prices came off last year's highs that were driven by Russia's invasion of Ukraine.
Profits at Chevron, Shell, and TotalEnergies shrank by 48%, 56%, 49% in the quarter, respectively.
Excluding last year's record second quarter, it was Exxon's best result for the months of April to June in more than a decade, helped by cost cuts and the sale of less profitable assets.
Net income was $7.88 billion, or 1.94 cents per share, in the second quarter. That compares to a record of $17.85 billion a year earlier, and close to second quarter results from 2011, when oil prices averaged $111 per barrel.
"That is quite a good quarter for us," Chief Financial Officer Kathryn Mikells told Reuters. "You would have to go back to the second quarter of 2011 to find the last time we produced this level of earnings in the second quarter."
Benchmark Brent crude prices averaged $80 a barrel in the second quarter of 2023, compared with $110 a year earlier. Prices for liquefied natural gas (LNG) dropped to $11.75 per million British thermal units (mmBtu) from around $33.
Exxon's oil production is at 3.7 million barrels of oil equivalent per day (boed) year to date, in line with the company's annual target, Mikells said.
Results were helped by better output in the U.S. Permian basin, which delivered 622,000 boed in the quarter, and in Guyana, where Exxon plans to increase production by 5% to 400,000 boed by year end.
Capital and exploration spending was $6.2 billion in the second quarter and $12.5 billion for the first half of 2023, in line with the company's full-year guidance of $23 billion to $25 billion, the company said.
The company has achieved cumulative structural cost savings of $8.3 billion from 2019 levels, nearing its $9 billion target.
Exxon earlier this month said it would buy gas pipeline company Denbury Inc for $4.9 billion to accelerate its energy transition business with carbon capture and storage (CCS) operations.
The oil giant distributed about $8 billion in cash to shareholders in the second quarter, with about $3.7 billion of those in dividends.
"We are very comfortable overall with our capital allocation approach," Mikells said. "So we're committed to continuing that balanced approach."
(Reuters - Reporting by Sabrina Valle; Editing by Sonali Paul)