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ExxonMobil (NYSE: XOM) reported a surprise first-quarter loss on Friday as a result of strong writedowns amid falling oil prices, recording its first quarterly loss since the Exxon and Mobil merger in 1999.
Exxon posted a loss of $ 610 million for the first quarter of 2020, compared to earnings of $ 2.4 billion for the first quarter of 2019, falling into a quarterly loss for the first time in more than two decades, as lows Oil prices weighed on asset valuations.
Exxon’s loss was the result of a $ 2.9 billion charge for identified items, reflecting the non-cash inventory valuation impacts of lower commodity prices and asset impairments.
In early April, the American supermajor said it was making a “significant reduction” in its capital spending (capital spending), cutting investments by 2020 by 30 percent, to around $ 23 billion, below the previously announced capital expenditure of about $ 33 billion. Exxon will also cut its cash operating expenses by 15 percent, fueled by deliberate actions to increase efficiency and reduce costs.
Exxon’s oil equivalent production increased 2 percent year-over-year to 4 million barrels per day for the first quarter of 2020. Permian production grew 20 percent from the fourth quarter of 2019 and increased 56 percent from First quarter of 2019, Exxon said today.
Exxon, like the other super major Chevron of EE. USA And, unlike some European rivals like Shell and Equinor, it will keep cash for the dividend.
Yesterday, Shell cut its dividend for the first time since World War II to preserve cash and value in a highly uncertain macroeconomic environment.
Commenting on Exxon’s first quarter results, its president and CEO Darren Woods said:
“COVID-19 has significantly impacted demand in the short term, resulting in markets with oversupply and unprecedented pressure on raw material prices and margins.”
“While we manage in these difficult times, we do not lose sight of the long-term fundamentals that drive our business,” added Woods.
“Our company remains strong and we will manage to overcome the current market slowdown as we have for decades,” said the head of Exxon.
By Tsvetana Paraskova for Oilichelin
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