US supermajor ExxonMobil has reported a 54% drop in annual net profit of $36 billion in 2023 as upstream oil and gas price realisations sank even though oil and gas production was the same as in 2022.
In reporting its fourth quarter 2023 and full-year 2023 results, the company said it generated $55.4 billion of annual cash flow and distributed $32.4 billion to shareholders.
The annual profit of $36 billion was its second-largest on record, and exceeded analyst expectations.
Other highlights were increased production in Guyana and the Permian basin by 18% versus 2022 and record annual refinery throughput.
The company sold $4.1 billion of non-core assets, and made two significant acquisitions including the $4.8 billion purchase of Denbury plus the merger agreement with Pioneer Natural Resources to help “transform its Upstream business”.
“Our consistent strategy and execution excellence across the business delivered industry-leading earnings and enabled us to return more cash to shareholders than our peers in 2023 1,” said Darren Woods, chief executive.
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“These results demonstrate the fundamental improvements we’ve made to our business, reflecting our progress in high-grading our portfolio through investments in advantaged projects and select divestments, while, at the same time, driving a higher level of efficiency and effectiveness throughout the business.”
In terms of segment performance, ExxonMobil’s cash machine — its upstream oil and gas division — made full-year earnings of $21.3 billion, which was $15.2 billion less than in 2022.
Identified items for the year reduced earnings by $2.3 billion.
Excluding identified items, upstream earnings decreased $15.8 billion on lower liquids and natural gas realisations, and unsettled derivatives mark-to-market effects of $2.4 billion.
Net oil and gas production in 2023 was 3.7 million barrels of oil equivalent per day, in line with the previous year.
The $59.5 billion all-stock merger with Pioneer Natural Resources, which ExxonMobil said is expected to generate double-digit returns, is expected to close in the second quarter of 2024.