ExxonMobil Corp., which soon may become one of the leading natural gas producers in North America, said Thursday global gas and oil output rose almost 5% and earnings jumped 38% in the first three months of 2010 compared with a year ago.
The launch of several start-ups, including some related to liquefied natural gas (LNG), others related to unconventional shale projects and deepwater drilling, lifted the oil major’s natural gas quarterly production.
“Oil-equivalent production increased by 4.5% over the first quarter of 2009 driven by contributions from recent start-ups of our world-class assets in Qatar,” said CEO Rex Tillerson. “In the first quarter capital and exploration spending was $6.9 billion, up 19% from last year.”
ExxonMobil also is “continuing to progress the XTO merger,” the CEO noted. The merger was announced in December (see Daily GPI, Dec. 15, 2009a; Dec. 15, 2009b). The agreement has been cleared by the Federal Trade Commission and Dutch authorities. “We continue to target for completion by the end of the second quarter.”
The Irving, TX-based major reported profits of $6.3 billion ($1.33/share) in 1Q2010, up from $4.55 billion (92 cents) a year earlier. However, Wall Street had projected earnings of $1.41/share. Revenue also jumped in the first three months of this year, climbing 41% to $90.25 billion, but it was less than the $96.41 million estimate by financial analysts.
“Lower economic activity is impacting near-term supply and demand balances resulting in weak natural gas prices and downstream margins,” said David Rosenthal, who leads ExxonMobil’s investor relations department. He spoke with financial analysts during a conference call. “Crude oil prices, however, are well above levels of a year ago.”
ExxonMobil’s gas-related accomplishments in 1Q2010, said Rosenthal, included the start-up of Ras Gas Train 7, an LNG project in Qatar (see Daily GPI, Feb. 25). The LNG train is a joint venture with Qatar Petroleum, Rosenthal noted.
“ExxonMobil has a stake in 12 LNG trains in Qatar with combined capacity of 62 million tons/year,” Rosenthal noted. Three more ExxonMobil-related LNG start-ups are scheduled this year, he said, including a Ras Gas Sakhalin project in Russia and the Golden Pass LNG facility near Sabine Pass, TX (see Daily GPI, July 31, 2009).
British Columbia’s Horn River gas shale play, where ExxonMobil is the largest leaseholder, also is showing promise (see Daily GPI, July 13, 2009; May 2, 2008). “We continue to evaluate our acreage position and have drilled 10 wells over the winter,” Rosenthal said. “We are currently preparing to complete and test two horizontal wells.”
In the Haynesville Shale ExxonMobil is now drilling its second well. Drilling “preparations” are under way in the Eagle Ford Shale in South Texas. Marcellus Shale exploration also has begun with a joint partner, he said (see Daily GPI, Feb. 2).
Colorado’s Piceance Basin gas drilling also continues, and “we are continuing Phase 1 development drilling” plan there, said the investor relations chief (see Daily GPI, June 23, 2009).
Meanwhile, ConocoPhillips’ earnings more than doubled in 1Q2010 on higher commodity prices and cost cutting, CEO Jim Mulva said during a separate conference call Thursday with financial analysts.
The Houston-based major, the third-largest U.S. oil company in market value behind ExxonMobil and Chevron Corp., reported profits of $2.1 billion ($1.40/share) from $840 million (54 cents) in the year-ago period. Wall Street had pegged estimated earnings at $1.38/share.
Gas and oil production in the period fell 5.2% worldwide from a year ago, which was attributed to normal field decline, production-sharing agreements and unplanned downtime because of bad weather. Production totaled 1.83 million boe/d, down from 1.93 boe/d in 1Q2009.
ConocoPhillips remains on track to sell $10 billion worth of its worldwide assets by the end of 2011, Mulva told analysts.
Within the next two months the producer plans to open a data room for some of its assets for sale, Mulva said. The company also expects to announce a transaction by the end of the year to deal its 25% interest in the Rockies Express Pipeline (see Daily GPI, Nov. 18, 2009).
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