ExxonMobil Corp. reported its highest-ever quarter on Monday, with net income of $8.42 billion ($1.30/share), including a special item of $2.23 billion to settle a long-running U.S. tax dispute. However, oil and natural gas production barely managed to break even globally, and in North America, output was substantially lower.

Revenues and other income for 4Q2004 totaled $83.3 billion, compared with $65.95 billion in 2003. Capital and exploration expenditures of $4.2 billion in the final quarter were down $127 million compared with 4Q2003. Full-year net income was $25.3 billion, up $3.8 billion over 2003.

Reflecting higher crude and gas prices, upstream earnings were $4.887 billion in 4Q2004, an increase of $1.618 billion from the fourth quarter of 2003 reflecting higher crude oil and natural gas realizations.

Globally, liquids production of 2.5 bbl/d was down 1% versus 4Q2003. Higher production from new fields in West Africa and Norway was more than offset by natural field decline in mature areas, entitlement effects and divestment impacts. Excluding divestment and entitlement effects, production increased 3%.

Natural gas production worldwide decreased to 10.4 Bcf/d from 10.86 Bcf/d in 4Q2003. Worldwide, on an oil-equivalent basis, production decreased by 2% from 4Q2003. Excluding divestment and entitlement effects, production increased by 1%.

During a conference call to discuss the earnings, Henry Hubble, vice president, investor relations, said that even with the increase in gas from projects and work programs and an additional liquefied natural gas train in Qatar, gains were more than offset by natural field decline in mature areas, divestment impacts and entitlement effects.

In the United States, 4Q gas production for sale fell to 1.8 Bcf/d, down from 2.038 Bcf/d in 4Q2003. For the year, gas production fell to 1.947 Bcf/d from 2.246 Bcf/d in 2003. In Canada, gas production reached 951 MMcf/d in 4Q2004, down from 994 MMcf/d in 4Q2003. For the year, Canadian gas production was actually higher at 972 MMcf/d from 943 MMcf/d.

Earnings from U.S. Upstream operations were $1.38 billion, up $528 million. Non-U.S. Upstream earnings of $3.5 billion were $1.09 billion higher than in 4Q2003.

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