ExxonMobil's U.S. production company lost $477 million within the third quarter, the seventh straight quarter in the red, the business stated on Friday. Exxon, which has been below stress from authorities over its accounting techniques, also warned it may will need to write down the value of a few of its significantly less profitable oil and gas assets.
The American oil behemoth generated an all round third-quarter profit, but earnings were down 38% in the year ahead of. Income also shrank more than Wall Street had feared.
Associated: ExxonMobil may be in irreversible decline
Exxon (XOM) blamed a "challenging" environment, especially oil prices which are nonetheless also low for a lot of pricey projects to produce any economic sense. The final time Exxon's U.S. output arm created any funds was the fourth quarter of 2014, a period that began with crude sitting above $90 a barrel.
Oil prices ultimately crashed to $26 a barrel in mid-February, however they have since rebounded to about $50.
Shares of Exxon slid 2% following the results.
Wall Street could be concerned about Exxon's writedown warning. The business stated it may possibly lower the worth of about four.6 billion barrels of oil and gas, largely assets in the Kearl oil sand operation in Canada that need to have larger prices to be lucrative.
The timing on the warning will raise eyebrows. Just last month, the New York Attorney Basic plus the SEC launched separate investigations into no matter if Exxon violated accounting rules by failing to reduce the value of its oil and gas supplies amid declining costs. Many other energy businesses have taken such writedowns.
Exxon has said it's "confident our financial reporting meets all legal and accounting needs."
The low cost oil environment has left Exxon beneath financial stress. The oil giant has been forced to borrow funds to cover massive drilling charges and its generous dividend payouts. Exxon's long-term debt has greater than quadrupled to $46 billion as well as the corporation not too long ago scrapped shareholder-friendly stock buybacks.
Chevron, America's second-largest oil business, returned to making dollars following three-straight quarters in the red. Chevron (CVX) posted a profit of $1.three billion on Friday, exceeding forecasts from analysts.