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Exxon Mobil on Friday posted its biggest quarterly profit in more than a year that also sailed past analysts’ estimates, boosted by higher oil prices and record earnings at its chemicals business.
The upbeat results following a contested board fight over the company’s direction quelled some investor concerns and highlighted how oil producers are taking advantage of a recovery in oil prices to cut debt and boost shareholder payouts rather than spend more to raise production.
“Positive momentum continued during the second quarter across all of our businesses as the global economic recovery increased demand for our products,” Chief Executive Officer Darren Woods said in a statement.
Exxon said its 2021 capital spending is expected to be at the lower end of the previously forecast range of $16 billion to $19 billion.
Earlier in the day, rival Chevron cut its 2021 budget, although both the top U.S. producers expect higher spending in the second half of the year as they resume investments on key projects, including the prolific Permian basin.
“ExxonMobil continued the parade of major oils companies with rapidly improving results, recovering from the depths of the COVID crisis during the second quarter last year,” Third Bridge Group’s Peter McNally said.
Exxon again used higher cash flow to pare a massive debt built up to preserve its shareholder dividend amid historic losses. The company cut debt by $2.7 billion, bringing total reductions to about $7 billion since the end of 2020.
The company also reiterated its pledge to cut costs further, saying it was on pace to achieve total cost savings of $6 billion through 2023 relative to 2019. In the first half of 2021 Exxon cut over $1 billion in costs, it said, on top of reductions of $3 billion in 2020.
Exxon earned $1.10 per share in the second quarter, beating analysts’ average estimate of 99 cents per share, according to Refinitiv IBES data. The company foreshadowed the results in late June, prompting several analysts to reduce their earning projections.
The company’s shares, which have risen 43% this year after plunging during the height of the pandemic, were little changed in premarket trading.
Shareholders had cast out three Exxon directors in May for a hedge fund’s nominees promising to boost returns and better prepare the company for a low-carbon world.
Earnings from its chemicals and plastics business rose nearly five-fold from a year ago to a record $2.32 billion as margins expanded on strong demand for plastic packaging, tight industry supply and shipping constraints.
Higher oil prices pushed earnings in the company’s exploration and production business to a more than one-year high of $3.19 billion. Output fell 2% to 3.6 million oil-equivalent barrels per day during the quarter.
The company said it expects higher oil and gas volumes in the current quarter due to reduced planned maintenance.
However, refining and marketing business has still not recovered from the pandemic, posting a loss of $227 million, hurt by maintenance costs, weak international air travel and product oversupply.
Exxon’s U.S. refining business has lost money for six quarters in a row. Outside the United States, refining operations have run in the red in five of the last six quarter.
Net income for the second quarter came in at $4.69 billion, compared with a loss of $1.08 billion a year ago, which included a gain related to reversing an inventory writedown. Absent the inventory change, the loss would have been $3 billion.
Source: Reuters
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Valaris Limited announced new contracts awarded subsequent to issuing the Company’s most recent fleet status report on February 21, 2023. Three-year contract with Petrobras for drillship VALARIS DS-8. The rig will be reactivated for this contract. The total contract value is approximately $500 million, including a $30 million mobilization fee. 100-day contract with a TotalEnergies affiliate for drillship VALARIS DS-12. The contract is expected to commence in second quarter 2023. 70-day contract with Beach Energy offshore New Zealand for heavy duty modern jackup VALARIS 107. The contract is expected to commence in third quarter 2023. The total contract value is approximately $26 million. President and Chief Executive Officer Anton Dibowitz said, “We are particularly pleased to have secured the award for preservation stacked drillship VALARIS DS-8, for a contract that is expected to generate a meaningful return over the firm contract term, and we remain focused on exercising our operational leverage in a disciplined manner. This most recent award represents the sixth contract awarded to one of our high-quality stacked floaters since mid-2021, and speaks volumes about our demonstrated track record of project execution when reactivating rigs.” Dibowitz added, “Following the reactivation of VALARIS DS-17 and DS-8, we will have ten floaters working across the golden triangle, including four drillships in Brazil, a market where we expect to see continued growth over the next several years.” Updated Guidance As a result of the contract awarded to VALARIS DS-8, which will require the rig to be reactivated from preservation stack, we are updating our first quarter 2023 and full-year 2023 guidance provided on our fourth quarter 2022 conference call on February 21, 2023. First Quarter 2023 Contract drilling expense is expected to increase by approximately $5 million to $385 million to $395 million. Adjusted EBITDA is expected to decrease by approximately $5 million to negative $5 million to breakeven. Adjusted EBITDAR, which adds back one-time reactivation expense, is expected to be $25 million to $30 million, unchanged from the guidance provided on our fourth quarter 2022 conference call. Full-Year 2023 Revenues are anticipated to be $1.8 billion to $1.9 billion, unchanged from the guidance provided on our fourth quarter 2022 conference call. Contract drilling expense is expected to increase by approximately $60 million to $1.49 billion to $1.59 billion. Adjusted EBITDA is expected to decrease by approximately $60 million to $180 million to $220 million. Adjusted EBITDAR, which adds back one-time reactivation expense, is expected to be $280 million to $320 million, unchanged from the guidance provided on our fourth quarter 2022 conference call. Capital expenditures are expected to increase by $60 million to $320 million to $360 million. Source: Valaris Join our mailing list here We are #1 on Google and Bing for the "Largest Mobile Energy Network" Come join our community! Download the Rig Lynx app here
Seadrill Limited announced that the West Neptune has executed approximately six months of term extensions with LLOG Exploration Offshore, L.L.C in the US Gulf of Mexico. The extensions will commence in direct continuation of the existing term, and will keep the rig busy until Q3 2024, furthering Seadrill and LLOG’s long-term association. Total contract value for the extension is approximately $79 million. Source: Seadrill Join our mailing list here We are #1 on Google and Bing for the "Largest Mobile Energy Network" Come join our community! Download the Rig Lynx app here
Semisub rig owner Dolphin Drilling has inked a new contract with Peak Petroleum in Nigeria for its 1974-built Blackford Dolphin. The firm contract, which follows the letter of award in January, gives the Euronext Growth-listed owner of three rigs the potential to extend the unit’s backlog by a minimum of 120 days and up to 485 days. The deal adds to and will be a direct continuation of the previously announced 12-month contract with General Hydrocarbon Limited (GHL). Øystein Stray Spetalen-backed company said the effective dayrate associated with the minimum firm period of the contract is $325,000, including the mobilisation fee. “The final award of the contract for Blackford Dolphin shows the opportunities in Nigeria at a strong dayrate, in addition to building on the backlog for the rig. It also underlines the attractiveness of our assets, and we look forward to returning to revenue-generating operations in 2023,” noted Bjørnar Iversen, CEO of Dolphin Drilling. Source: Dolphin Join our mailing list here We are #1 on Google and Bing for the "Largest Mobile Energy Network" Come join our community! Download the Rig Lynx app here
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