on Friday reported a record first-quarter profit that was more than double from a year ago and topped Wall Street estimates as rising oil and gas output overcame a pullback in energy prices from high levels.
Oil companies are riding that wave of relatively higher oil and gas prices with earnings benefiting from strong demand and cost-cutting tied to efforts to counter Covid-19 lockdowns three years ago.
“We delivered a first-quarter record despite the fact that energy prices and refining margins are softening a bit,” Chief Financial Officer Kathryn Mikells said in an interview.
The biggest contributor to the better-than-expected earnings came from strong production growth, she said. Exxon’s quarter was driven by new volumes of crude oil and fuels from the startup of new offshore developments and refining facilities.
Its income rose to $11.43 billion, or $2.79 per share, compared with $5.48 billion a year ago which included a writedown to exit Russia.
Its oil and gas production rose by nearly 300,000 barrels per day (bpd) compared to year-ago levels excluding asset sales and its exit from Russia. The year-ago results included a $3.4 billion after-tax writedown of Russia oil and gas holdings.
The increased output reflects a rise of 40% from a year earlier in production from the Permian Basin in Texas and Guyana, where it turned on a second production platform last year that added about 240,000 bpd to output. Higher volumes partially offset a 16% drop in oil prices from a year ago.
First quarter results also reflect the expansion of its fuels production. The company finished the startup of a new crude processing unit last quarter at its Beaumont, Texas, plant that added 250,000 bpd of oil refining capacity.
The producer ended the first quarter with $32.7 billion in cash, but it has no urge to tap it for mergers or acquisitions, Mikells said.
Exxon would be open for deals that could offer synergies and drive good returns for shareholders, she said. But it is focused on increasing production in the Permian, in Guyana and in the Beaumont refinery expansion, among others, Mikells said. “Our focus is really making sure that we are executing those organic opportunities.”
