Exxon posts third straight loss as pandemic hits demand, prices

(Reuters) – Exxon Mobil Corp XOM.N posted its third straight quarterly loss on Friday and detailed deeper spending cuts to come, as the oil major reels from the COVID-19 impact on energy demand and prices.

FILE PHOTO: Logos of ExxonMobil are seen in its booth at Gastech, the world’s biggest expo for the gas industry, in Chiba, Japan April 4, 2017. REUTERS/Toru Hanai

The largest U.S. oil producer by volume said it will cut its capital spending for 2021 to between $16 billion to $19 billion from a planned $23 billion this year. It has spent about $16.5 billion this year on new projects.

It also said it was reassessing its natural gas holdings in North America and could take impairments on assets with a book value of as much as $25 billion to $30 billion – but only if it changes its long-term development plans. It is evaluating those assets this quarter, which include properties it added with its 2010 purchase of XTO Energy.

Exxon beat expectations with an adjusted loss of 18 cents per share, Analysts had expected a loss of 25 cents per share, Refinitiv Eikon data showed.

Oil companies last quarter continued to suffer from weak prices for their products, but rivals Chevron, Royal Dutch Shell and BP Plc also posted higher-than-expected results after deep cost cuts this year.

“We remain confident in our long-term strategy and the fundamentals of our business,” said CEO Darren Woods, adding that Exxon would continue to protect its shareholder dividend, which is now yielding more than 10%.

Its third-quarter net loss was $680 million, or 15 cents per share, compared with a profit of $3.17 billion, or 75 cents per share, a year earlier.

Oil and gas output fell 5.8% to 3.67 million barrels per day in the quarter, due to government and economic curtailments in the quarter.

The company expects to exceed capital and cash expenses reduction targets for 2020 and forecast further cuts in 2021.

This week, the U.S. oil producer said it would cut its workforce by about 15% and kept its fourth-quarter dividend flat at 87 cents a share, signaling 2020 will be the first year since 1982 that it has not raised its shareholder payout.

Exxon was caught off guard by the sharp decline in energy prices and demand this year. U.S. prices are off 39% since the start of the year and globally demand has shrunk due to the COVID-19 pandemic.

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