By Sabrina Valle
HOUSTON (Reuters) -Exxon Mobil Corp on Thursday signaled a return to annual profit for 2021 as stronger oil and gas prices drove as much as $1.9 billion in operating gains in the fourth quarter.
The largest U.S. oil producer issued a snapshot of final quarter results that showed it expects sequentially higher operating profit in its upstream businesses, but potentially flat to lower operating profits in downstream and chemicals . Official results are due out Feb. 1.
In 2020, Exxon notched a historical $22.4 billion loss on writedowns from falling oil prices and lower refining margins. Cost cuts coupled with energy price gains have allowed it to pay down debt and plot a share buyback program next year.
Analysts forecast an adjusted profit of $1.76 per share for the quarter, according to Refinitiv IBES data, compared to 3 cents a share excluding writedowns a year-ago.
Thursday’s regulatory filing signaled lower chemical margins could drag results by $600 million to $800 million, compared to the $2.14 billion profit from the third quarter. And refining margins could stay flat or drop by $200 million compared to the $1.23 billion profit the previous quarter.
Results will include more than $1 billion in proceeds from the previously announced sale of its U.K. North Sea assets and potentially smaller amounts from U.S. shale gas asset sales.
Exxon’s rosier outlook have allowed it to extend planned a $20-25 billion per year outlay on new projects through 2027, including $2.5 billion per year on carbon reductions, and double its pre-pandemic annual profit by 2025, the company has said.
About 60% of its spending will be in key growth areas of U.S. shale, Guyana, Brazil, LNG, and chemical products.
Exxon shares fell 36 cents or about 0.59% on Thursday to close at $60.79. The stock is up 47% so far this year but down 33% over the last five years.
(Reporting by Sabrina Valle; Additional reporting by Ashwini Raj in Bengaluru; Editing by David Gregorio)
