Touting increased production in the Permian Basin and Guyana and the expansion of its refinery at Beaumont, ExxonMobil Chairman-CEO Darren Woods says his company delivered the highest first quarter earnings in its history even as energy prices and refining margins moderated from the fourth quarter last year.
“Compared to the first quarter of 2022, we added about 300,000 oil-equivalent barrels per day to global supply, primarily from a 40 percent increase in production from Guyana and the Permian Basin,” Woods said from Houston in ExxonMobil’s first quarter earnings call. “The increase more than offset our divestments in the expropriation of Sakhalin-1 (in Russia) which we no longer account for but which importantly remains part of global supply.
“In addition, our Beaumont refinery expansion reached nameplate capacity in the quarter. This 250,000 barrels-a-day expansion is the largest U.S. refinery addition in a decade, helping to meet society’s ongoing need for transportation fuels.”
Woods said his company addressed low carbon solutions by signing a long-term agreement with the Linde Co. to capture, transport and permanently store up to 2.2 million metric tons of CO2 annually.
“In hydrogen, we announced a front-end engineering and design contract for the world’s largest low carbon hydrogen facility in Baytown, a heads of agreement with the SK Group of Korea for the offtake of blue ammonia from that facility,” he said. “The ability of our low carbon projects to compete successfully for capital is important if the world is going to meet its emissions aspirations.
“Incentives included in the Inflation Reduction Act are a positive step forward, although permitting and other regulatory improvements are still needed. In Europe, by contrast, the policy approach remains far more prescriptive and punitive.”
Building on its record results last year, Woods said his company had record first quarter earnings of 11.4 billion.
“A significant contributing factor was structural cost savings that now total approximately $7.2 billion, which keeps us on track to meet our target of $9 billion by the end of this year,” he said. “Cash flow from operations totaled $16.3 billion and our net debt-to-capital ratio declined to four percent, further increasing the strength of our balance sheet while supporting shareholder distributions of $8.1 billion in the quarter, including $3.7 billion in dividends.”
ExxonMobil Senior Vice President-Chief Financial Officer Kathy Mikells said maintaining a strong balance sheet depends on investing in the company and having competitively advantaged high return projects.
“That balance sheet gives us all the firepower and confidence we need to succeed across a wide variety of market conditions, which is obviously what this industry faces,” Mikells said. “Then we’re looking to share our success with the shareholders and you see that through a more consistent share repurchase program and a growing dividend. ExxonMobil’s average debt rate is about three percent.”
