World's Energy

April 30, 2009 - Wall Street Journal by Isabel Ordonez, Angel Gonzalez - Exxon Mobil Corp. on Thursday said its first-quarter profit fell 58% as the global economic slowdown depressed oil prices and demand. The world's largest oil company by market value posted net income of $4.55 billion, or 92 cents a share, down from $10.89 billion, or $2.02, a share, a year earlier. Revenue dropped 45% to $64.03 billion. The earnings decline at ExxonMobil, which repeatedly broke profit records during the run-up in energy prices, underscores the reversal of fortunes for the oil-and-gas sector. Crude-oil prices have fallen to about $50 since reaching highs above $145 a barrel last summer, and oil companies are struggling to maintain the capital spending needed to shore up declining production while maintaining dividends to attract investors. ExxonMobil, of Irving, Texas, increased its quarterly capital spending by 5% to $5.8 billion compared with last year and on Wednesday said it would increase its second-quarter dividend 5% to 42 cents a share. ExxonMobil also said it would spend about $5 billion on share buybacks in the second quarter, a decrease from the $7 billion it spent in the first quarter. "Exxon is showing it's an extremely disciplined company that will continue its journey no matter what," said Fadel Gheit, an analyst at Oppenheimer & Co. ExxonMobil's first-quarter production averaged 4.2 million barrels of oil equivalent a day, the same as a year earlier. Production would have grown 2% were it not for the impact of production-sharing contracts, the effect of quotas imposed by the Organization of Petroleum Exporting Countries and divestments, the company said. Oil and gas output from new projects in Qatar, Nigeria and the Gulf of Mexico were offset by depletion in other fields, according to a research note by investment bank UBS.