Fueled by its acquisition of XTO Energy Inc., as well as contributions from liquefied natural gas projects in Qatar, ExxonMobil Corp.'s global gas volumes jumped by 37% in the final period of 2010, the company reported Monday.
Total gas and oil volumes climbed 19% in the latest quarter from a year earlier. The XTO subsidiary contributed 12% of the new volumes, Investor Relations chief David Rosenthal told financial analysts during a conference call. The purchase was completed last June (see Daily GPI, June 28, 2010).
ExxonMobil produced 14.65 Bcf/d in the final three months of 2010, up 3.94 Bcf/d from the previous year. Going forward, the plan is to "selectively" explore and develop properties where ExxonMobil can produce the most for the lowest cost, said Rosenthal. In North America, most of the development will be in oily plays, while portfolio additions will be all over the map.
"We've got 70 rigs working across the United States on unconventional plays" that are spread across the "highest-priority locations of over 20,000 wells," said Rosenthal.
Gas-weighted properties that should take more of this year's resources are the Horn River Basin in British Columbia and the Fayetteville and Haynesville shales, as well as some development drilling in the Bossier Sands of East Texas.
The largest leaseholder in the Horn River play quietly added about 18,000 net acres to its portfolio in the final three months of the year. And in late December the producer agreed to pay $575 million to buy Petrohawk Energy Corp.'s Fayetteville Shale assets, which included 150,000 net acres that were producing 95 MMcf/d net (see Daily GPI, Dec. 27, 2010).
Before the Petrohawk addition in the Fayetteville play at year's end ExxonMobil already had turned a keen eye to Arkansas, where the company doubled production year/year (y/y), noted Rosenthal. In the Haynesville Shale leasehold, which is jointly operated with Encana Corp., output jumped "four-fold" y/y.
However, higher oil prices will mean more development money in those onshore plays.
"We are putting a particular focus for equipment in the highest-priority wells, particularly in the Bakken and Eagle Ford," said Rosenthal.
Last year ExxonMobil drilled 15 wells in the Eagle Ford play, five in the final quarter. In the Bakken Shale 19 wells were drilled in 4Q2010, which brought the year's total to 63.
Rosenthal was hesitant to offer too many details about what ExxonMobil has planned in North America this year; an analyst meeting is scheduled in March. However, management is "not at all surprised" by the contributions thus far by XTO. Attrition is low, he said, and "the integration...is coming together seamlessly. We have quickly utilized technical advantages ExxonMobil had to deliver the type of results expected in terms of improving production and lowering operating expenses."
ExxonMobil delivered higher-than-expected quarterly results of $9.4 billion ($1.85/share), a 53% increase of 4Q2009 profits of $6.05 billion ($1.27). Revenue climbed to $105.2 billion from $89.8 billion a year earlier. Capital and exploration spending in 4Q2010 was $10.1 billion, a 22% increase y/y. Operational cash flow totaled $14.7 billion.
U.S. upstream operations earnings totaled $1.32 billion, which was $306 million higher than in 4Q2009. The XTO subsidiary contributed about $120 million to earnings in the final period. XTO's full-year contributions, which included 3Q2010, were about $259 million.
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