Tarred heels

2 February 2018 By Lauren Silva Laughlin Follow @TheRealLSL

The oil majors posted poor earnings despite the cartel’s production cuts boosting crude prices. They also plan to pump more black gold and increase investment, despite shareholder concerns about inadequate returns and climate risk. Last quarter’s flubs signal more mess to come.

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Exxon Mobil said on Feb. 2 that it earned $8.4 billion in the fourth quarter of 2017. Results included a $5.9 billion gain related to December’s U.S. tax changes and a $1.3 billion hit from asset impairments. Excluding those items, earnings at the world’s largest publicly traded independent oil company were $3.7 billion. At 88 cents per share, these missed the consensus estimate of sell-side analysts of $1.04 per share, according to Thomson Reuters I/B/E/S. Oil-equivalent production fell 3 percent from the prior year to 4 million barrels per day.

On the same day, Chevron said that it earned $3.1 billion, or $1.64 per share, in the final three months of the year. Excluding extraordinary items, including a benefit from tax reform, earnings were $1.4 billion, or 72 cents per share. Analysts’ consensus estimate was for $1.22 per share.

On Feb. 1 ConocoPhillips said that its fourth-quarter earnings excluding special items of $540 million, or 45 cents per share, matched analysts’ consensus estimate. Production excluding assets in Libya and planned dispositions rose 45,000 barrels of oil equivalent per day, or 4 percent.

On Jan. 29 Exxon Chief Executive Darren Woods said the company plans to invest $50 billion over the next five years to expand the company’s business in the United States. The investment included $35 billion of new cash that Exxon had not previously announced, according to Reuters. On Feb. 1 the U.S. Energy Information Administration said U.S. monthly crude-oil production in Nov. 2017 exceeded 10 million barrels a day, the highest level since 1970. In the lower 48 states, production reached a record.

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