ExxonMobil total output down, Permian up 34pc: Update

Updates with details from conference call.

ExxonMobil's total second quarter production fell by 2pc to 3.6mn b/d of oil equivalent (boe/d) from the year-earlier quarter, mainly due to increased maintenance, but Permian basin output rose by 34pc to 400,000 b/d.

Excluding entitlement effects, divestments and government mandates, output rose by 3pc from a year earlier.

Volumes are expected to pick up in the current quarter because of lower maintenance, the company said in its earnings release today. ExxonMobil expects to boost spending on key projects including Guyana, Brazil, the Permian basin, as well as its chemical division, in the second half of 2021. Still, it anticipates full-year spending will be at the lower end of its guidance range of $16bn-$19bn.

"Positive momentum continued during the second quarter across all of our businesses as the global economic recovery increased demand for our products," chief executive Darren Woods said.

This is the company's first earnings report since it lost a proxy battle with a tiny hedge fund in May over its climate strategy that resulted in three board members being unseated. Woods was on the defensive again last month when he was forced to issue an apology after a company lobbyist was recorded saying ExxonMobil had campaigned against climate change legislation.

The new board met in person for the first time this week and Woods said ExxonMobil is "stepping up and accelerating efforts to ensure the company plays a meaningful role in the energy transition."

Although the company set up a low-carbon unit earlier this year — and Woods outlined a number of potential carbon capture projects — he emphasized that it would take time for these efforts to bear fruit.

He also downplayed the possibility of any sweeping changes in overall strategy, though there could be "accelerations, additional emphasis" in specific areas.

Unlike rival producer Chevron, which said earlier today it was resuming share buybacks that were suspended last year, the focus at ExxonMobil is squarely on using spare cash to pay down debt for the time being. The company reduced debt by $2.7bn in the quarter, bringing year-to-date reductions to more than $7bn. ExxonMobil also said it's on track to cut costs by $6bn through 2023.

The company reported a profit of $4.7bn compared with a loss of $1.1bn in the same period last year. Exxon Mobil's chemical business had its best quarter in the company's history with earnings of $2.3bn.

Earnings from chemicals were driven by higher polyethylene and polypropylene margins in North America and Europe, due to strong demand, tight supply and shipping constraints.

By Stephen Cunningham