Rapidly declining gas and oil prices, a weakening economy and higher operating costs pressured ExxonMobil Corp. earnings down 23% or $970 million, excluding merger effects, to $3.3 billion ($0.48 per share). Earnings per share declined by 20%. Domestic natural gas sales were off more than 16% from the same period last year.

“The reduction in earnings reflected lower crude oil and natural gas realizations, both of which declined significantly and tracked widely quoted price markers. The drop in crude oil prices was especially steep in the latter half of September,” Chairman Lee R. Raymond. He said ExxonMobil’s upstream volumes, on an oil-equivalent basis, were up 1%.

Including $140 million in merger expenses, third quarter net income was $3.2 billion ($0.46 per share), and revenue totaled $53 billion compared with $58.6 billion in 2000. Capital and exploration expenditures of $3.1 billion were up $452 million, or 17%, and were 9% higher than in the second quarter.

“Upstream earnings were $2.1 billion, a decrease of $969 million from last year’s record third quarter, reflecting lower average crude oil and natural gas realizations, in line with declines in industry markers,” said Raymond. “In the final weeks of the quarter, crude prices fell to their lowest levels in 20 months. Liquids production decreased 1% as growth from new capacity additions in Canada, Equatorial Guinea, Venezuela and Kazakhstan was offset by natural field decline in mature areas and the impacts of civil unrest on our operations. Natural gas volumes increased by about 3%, absent the impact of reduced operations in the Aceh province of Indonesia due to security concerns.”

Domestic natural gas production was down a whopping 408 MMcf/d to 2,469 MMcf/d compared to the third quarter of 2000. For the first nine months of the year, domestic gas production was down 279 MMcf/d to 2,616 MMcf/d compared to the same period last year.

Earnings for the first nine months of 2001, excluding merger effects and special items, were a record $12.8 billion ($1.84 per share), an increase of $960 million (8%) over the first nine months of last year. Per share earnings increased 10% reflecting higher earnings and the results of the company’s share buy back activity.

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