Exxon Mobil has posted an annual loss of $22.4 billion for 2020 after the COVID-19 pandemic hammered energy prices and reduced the value of the company’s shale gas properties by more than $20 billion.
Exxon last year slashed spending on new projects by nearly a third, outlined plans to cut up to 15 percent of its workforce while adding $21 billion to its debt to cover the losses and restructuring, Reuters reported.
The company reported a full-year profit of $14.34 billion in 2019.
Other oil majors posted losses for the year as pandemic-related travel restrictions cut fuel demand and triggered huge writedowns. Rivals BP and Chevron Corp posted annual losses.
Royal Dutch Shell reports financial results Thursday.
Exxon posted a net loss of $20.2 billion, or $4.70 per share, in the fourth-quarter ended Dec. 31, compared with a profit of $5.69 billion, or $1.33 per share, a year ago.
But with oil prices recovering, Exxon can start to cover dividend and begin paying down the $68 billion in debt on its balance sheet, Woods said. Oil is up 11 percent so far this year, and trading at pre-pandemic levels.
Project spending fell nearly a third last year and this year will near the bottom of the company’s $16 billion to $19 billion forecast, Woods said. Spending will rise to as much as $25 billion from 2022 through 2025, he said.
Exxon’s oil and gas output was 3.7 million barrels of oil and gas per day in the fourth quarter, down 8 percent compared with a year earlier.
It projects a doubling of Permian Basin output to 700,000 barrels per day by 2025, down from the million-barrel target it previously had expected to hit by 2024 in the top U.S. shale field, Woods said.
Exploration and production, Exxon’s largest business, lost $18.5 billion in the fourth quarter on the natural gas asset impairments, compared with a profit of $6.1 billion the year prior.
Its chemicals business earned $691 million on better margins in part from lower oil prices, up from a loss of $355 million a year ago. Refining lost $1.2 billion, compared with a profit of $898 million last year, on weak margins and lower output as the pandemic limited global travel.
The writedown lays bare the size of the miscalculation that the company made in 2010 when it paid $30 billion for U.S. shale oil and gas producer XTO Energy.
The move to shake up its board comes as Exxon faces a proxy fight with hedge fund Engine No. 1, which has proposed four candidates and wants the board to include clean-energy experience.
Exxon said it would invest $3 billion on lower emission solutions through 2025 and that it has created a business that will focus on commercializing its carbon capture technology.