ExxonMobil fell short of profit and production expectations, underscoring the need for the world’s largest oil major to ramp up projects that won’t deliver until the early 2020s.
Exxon produced the equivalent of 3.6 million barrels of oil in the second quarter, the lowest in almost a decade and well short of the 3.83 million expected by analysts, the Irving Texas-based company said in a statement Friday. Maintenance and repairs at undisclosed oil fields more than offset output gains from U.S. shale and offshore Canadian assets, the company said.
Investors punished Exxon, taking the shares down 3.3 percent at 8:12 a.m. in New York. Lagging production meant Exxon failed to fully capitalize on a Brent crude price that was almost 50 percent higher than a year earlier. Net income of $3.95 billion lagged the $5.35 billion average forecast from analysts.
Big Oil’s profits have rebounded to levels last seen before the 2014-2016 crash, leading them to consider share buybacks to reward long-suffering investors. Not so with Exxon, which is prioritizing big project investment to recover from missteps into Canadian oil sands, Russia and U.S. shale gas over the past decade.
Long an industry-leader in returns and stock-market valuation, Exxon has slipped in recent years as costly mistakes over the past decade came to the fore. Major investments in Canada, Russia, and U.S. shale gas while former CEO Rex Tillerson was in charge haven’t lived up to expectations.