Exxon’s Q1 profit declines less than expected

Exxon Mobil Corp. posted higher-than-expected profit as international sanctions against Russian interests clouded the US oil explorer’s efforts to tap some of the world’s biggest crude reserves.

First-quarter net income was $9.1 billion, or $2.10 a share, compared with $9.5 billion, or $2.12, a year earlier, the Irving, Texas-based company said in a statement.

Russia’s oil and gas riches are key to chairman/CEO Rex Tillerson’s plans for reviving output at the world’s biggest energy explorer by market value. Exxon’s global production has fallen in 10 of the past 11 quarters and net income is in the midst of the longest slide since the worldwide financial crisis of 2008-2009.

Tillerson slashed spending on drilling and acquisitions outside the US by 41 percent to $5.2 billion and almost tripled asset sales to amass cash.

The balance-sheet measures helped offset a larger-than-expected 5.6 percent drop in oil and natural gas production exacerbated by lower crude prices.

“Cash flow looks good and their projects are proceeding on schedule, so all in all it was a good quarter,” Brian Youngberg, an analyst at Edward Jones & Sons in St. Louis, said. Cost-containment and the absence of major deals akin to last year’s $3.1 billion Celtic Exploration Ltd. purchase in Canada were a boon, he said.

Revenue declined 1.5 percent to $106.8 billion. The company’s global production fell to the equivalent of 4.15 million barrels a day, the lowest first-quarter average since Exxon’s 1999 acquisition of Mobil.

Worldwide, Exxon found commercial quantities of oil or gas in 67 percent of the exploratory wells it drilled in 2013, unchanged from 2012, according to the filing. At the same time, Exxon’s costs to produce the equivalent of a barrel of crude jumped to $11.48 last year from $9.91 in 2012.

Brent crude futures, the benchmark for more than half the world’s oil, declined by 4.2 percent to an average of $107.92 a barrel during the quarter, according to data compiled by Bloomberg. US gas prices climbed 35 percent to average $4.712 per million British thermal units during that period.

Global demand growth for fuels to run trucks, trains, airplanes and cars slowed to 0.9 percent during the first three months of this year from 1.3 percent a year earlier, according to the International Energy Agency.