ExxonMobil Corp. turned in yet another glowing performance in the first quarter, with profit of $5.44 billion on revenue of $67.6 billion. Quarterly net income slipped 23%, which the company blamed on one-time gains, but across its oil and gas businesses, the major posted higher profits.

However, in the United States and Canada, natural gas production available for sale in the quarter dropped slightly from a year ago to stand at 3.06 Bcf/d, compared with 3.34 Bcf/d reported in 1Q2003. Exxon’s quarterly net production of crude oil and natural gas liquids in North America also was down, totaling 967 thousand bbl/d, down slightly from 980 thousand bbl/d in 1Q2003.

But with stellar profits and a solid business plan, Pat Mulva, Exxon’s vice president of investor relations, offered positives for analysts and investors during an hour-long analyst call Thursday. The Irving, TX-based major is “investing in an incredible amount of opportunities,” Mulva said, but along with looking for opportunities, it will “maintain a disciplined approach” toward any new acquisitions or projects in the short term.

Mulva dismissed talk that Exxon would not put more money into the mature basins of North America or the Gulf of Mexico (GOM) because of declining production. “Overall, our capex [capital expenditure] for the upstream and specifically for the United States is about what we said we would invest,” Mulva told analysts. But he added that Exxon would undertake new ventures such as deepwater GOM projects, liquefied natural gas (LNG) or the proposed Alaska natural gas pipeline only if they are estimated to prove worthwhile in the long term.

“Our view has really been unchanged,” he said in response to questions about North American investments. “We have continued to invest in the Gulf of Mexico over this time period. Most of what we do is predicated on the timing of projects. We are active and we will continue to be active,” he said in pursuing the Alaska pipe or LNG. “There may have been the appearance of change, but there is no change. We will pursue the best opportunities, and those that we are interested in pursuing.

Exxon holds considerable interests in Alaska’s North Slope, but Mulva did not acknowledge any movement forward on the pipeline to the Lower 48. However, he said that in the long term, Exxon believes that LNG and Alaska gas “will have the most long-term impact” in the United States. “Demand overall requires large LNG projects and Alaska,” he said.

In the numbers game, Exxon on Thursday reported quarterly profit of $5.44 billion (83 cents/share), down from $7.04 billion ($1.05) in the first quarter of 2003. Last year’s first quarter included a gain of $1.7 billion on the sale of Exxon’s stake in Ruhrgas AG, as well as a $550 million benefit from accounting changes. Excluding those items, earnings in 1Q2003 were $4.70 billion (71 cents/share). Revenue was $67.6 billion, up from $63.78 billion a year ago.

Worldwide, Exxon spent nearly $12 billion for exploration and production activities in 2003. Exxon also is confident of estimates of its oil and natural gas reserves, the company said.

Net income from upstream activities fell 30% in the quarter to $4.01 billion. Earnings from U.S. upstream operations dropped $105 million to stand at $1.15 billion, which the company said reflected lower production in its mature production areas. Excluding the Ruhrgas gain, non-U.S. upstream earned $2.86 billion in 1Q2004, $125 million higher than a year ago on growth in its liquids production from new projects.

Refining numbers were up worldwide, but natural gas production decreased to 11.5 Bcf/d, compared with 12.05 Bcf/d in 1Q2003, “reflecting lower weather-related demand in Europe and natural field decline in mature areas partly offset by the start-up of an additional liquid natural gas train in Qatar.

Worldwide, liquids production increased by 5% versus first quarter 2003 and was at its highest level since the fourth quarter of 1988. On an oil-equivalent basis, production was at its highest level since the first quarter of 2001 to stand at 2,635 thousand bbl/d, a 1% increase from the first quarter of last year’s 2,503 bbl/d. Mulva noted that long-term capacity increases remain on track, which are reflected by “continued high levels of capital spending.”

©Copyright 2004 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.