The ExxonMobil Corp. earned $9.1 billion in the third quarter for a $1.2-billion improvement over the second quarter and the Houston-based company’s $60-billion acquisition of Pioneer Natural Resources further brightened Chairman-CEO Darren Woods’ outlook.
“During the quarter we closed on the sale of our Thailand refinery, bringing our year-to-date cash proceeds from asset sales to more than $3 billion,” Woods said during ExxonMobil’s third quarter report, adding that that was followed by the close of a refinery sale in Italy.
“Recently announced acquisitions are great examples of the ‘and’ equation, meeting the world’s needs for energy and essential products and reducing emissions,” he said. “Acquiring Denbury strengthens our position to economically reduce emissions in hard-to-decarbonize industries, which today have limited practical options.
“We see the potential to drive strong returns with the capacity to reduce the nation’s carbon emissions by 100 million tons per year. That’s 20 times our current CO2 offtake agreements with CF Industries, Linde and Nucor, which by themselves could lower CO2 emissions by an amount equivalent to replacing two million cars with EVs, roughly the same number of electric vehicles currently on U.S. roads.”
Woods said ExxonMobil plans to accelerate Pioneer’s Permian net-zero ambition by 15 years and fully leverage its advances in water recycling.
“This deal is a win any way you look at it, good for our shareholders, good for the environment, good for the economy and good for U.S. energy security,” he said. “We’re also continuing to drive profitable growth organically.
“In energy products we achieved the highest third quarter refinery throughput on record, driven by our Beaumont refinery expansion.”
Woods said the expanded Beaumont refinery is providing 250,000 barrels per day of much-needed new capacity to the market.
“In addition we recently started up our Baytown Chemical expansion, which grows volume and improves mix,” he said. “We provide 750,000 tons per year of new performance chemical capacity, including 350,000 tons of linear alpha olefins and marking our entry into this growing market.
“We delivered another quarter of strong operational and financial performance with earnings of $9.1 billion and cash flow from operations of $16 billion.”
Senior Vice President Neil Chapman said Pioneer Natural Resources “is arguably the best Permian pure-play company with the largest undeveloped Tier 1 inventory in the Midland Basin.
“Pioneer’s employees are innovative and hardworking and they possess a deep knowledge of unconventional operations in the Permian,” Chapman said. “We expect synergies of approximately $1 billion before tax annually beginning in the second-year post-closing and an average of about $2 billion per year over the next decade, driving double-digit returns.
“This transaction not only strengthens our current position, it transforms our portfolio and increases our exposure to the short-cycle low cost of supply liquids in the United States.”
Chapman said the deal should boost the two companies’ combined Permian production to two million oil equivalent barrels per day by the end of 2027.
“Downstream this merger also increases the integration between high-value light Permian crude and our premier refinery and chemical footprint on the Gulf Coast,” he said. “We will increase our Permian production with plans to accelerate Pioneer’s net-zero plan to 2035 from 2050 and decrease our combined Permian emissions.”
