IEEFA: ExxonMobil reserve portfolio posts small quarterly return despite price increases

April 30, 2021

Tom Sanzillo and Clark Williams-Derry

April 30, 2021 (IEEFA) — Despite an extraordinary rise in the price of oil for ExxonMobil’s U.S. operations, the company’s U.S. reserve portfolio managed a meagre $363 million in earnings, according to an IEEFA analysis of its first-quarter earnings report.

Oil prices rose to an average of $56.20 during the first quarter of 2021, a 44 percent increase from the $39.06 posted during the last quarter of 2020.

“ExxonMobil has been pouring billions into the Permian Basin since 2013,” said Tom Sanzillo, IEEFA director of financial analysis. “The earnings report of $363 million this quarter—when oil prices took off—represents more an accounting gimmick than an actual return for investors.”

The Irving, Texas-based supermajor reported spending $3.1 billion on capital expenditures during the first quarter, including $800 million on its U.S. upstream operations. Weak earnings in ExxonMobil’s upstream portfolio have become common. Since 2013, it has invested more than $60 billion in U.S. upstream operations while posting $6 billion in cumulative losses.

“Do the math,” said Clark Williams-Derry, an IEEFA energy finance analyst. “ExxonMobil’s U.S. upstream segment bled cash for the quarter, after factoring in capital expenditures. The company’s U.S. oil and gas portfolio continues to underperform.”

Tom Sanzillo ([email protected]) is IEEFA’s director of financial analysis.

Clark Williams-Derry ([email protected]) is an IEEFA energy finance analyst.

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Tom Sanzillo

Tom Sanzillo is the former Director of Financial Analysis for IEEFA. He has produced influential studies on the oil, gas, petrochemical and coal sectors in the U.S. and internationally, including company and credit analyses, facility development, oil and gas reserves, stock and commodity market analysis, and public and private financial structures.

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Clark Williams-Derry

Clark Williams-Derry focuses on the finances of North America’s oil and gas industry. His areas of expertise include: North American liquefied natural gas (LNG) export projects; global LNG market trends; the long-term financial performance of North American oil & gas companies, particularly fracking-focused enterprises; and financial issues related to the cleanup of oil and gas infrastructure.

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