May 05, 2021 News
…as company’s portfolio is best in 20 years—Chairman Darren Woods
Kaieteur News – Guyana’s prolific Stabroek Block with a return of a break-even production price at US$35, and production up 70 percent over the previous year, has contributed significantly to ExxonMobil’s return to a profitable status for the first quarter of 2021.
The revelations were had this past week, when company officials, including ExxonMobil’s Chairman of the Board of Directors, Darren Woods, provided an update on the company’s financial returns for the year’s first quarter.
Qualifying the position, that “today’s portfolio of opportunities is the best we have seen in 20 years,” Woods in his report to investors noted that 90 percent of “our upstream investments and resource additions over the next five years including Guyana, Brazil and the Permian generate 10 percent returns at $35 a barrel or less.” With the low break-even margin and Guyana accounting for a significant chunk of the company’s total upstream returns, the company noted that earnings on this front, is up by over US$1.8B for the financial quarter.
Steven Littleton, the company’s Vice President for upstream operations noted that Guyana’s production increased by approximately 70 percent or 19,000 barrels per day over the same period. Collectively, ExxonMobil realised in its first quarter for the year, profits of $2.7 billion, or $0.64 per share, compared with a loss of $610 million in the first quarter of 2020. The company saw its total cash flow being realised at US$9.3B. It was noted that the company’s overall oil-equivalent production was 3.8 million barrels per day, up three percent from the fourth quarter of 2020.
Spending on the other hand saw first quarter capital and exploration expenditures at $3.1 billion, $4 billion lower than the first quarter of 2020. “Excluding entitlement effects, government mandates and divestments, oil-equivalent production was up 2 percent,” ExxonMobil said.
According to Woods in his report, “the strong first quarter results reflect the benefits of higher commodity prices and our focus on structural cost reductions, while prioritising investments in assets with a low cost of supply” such as Guyana. He noted too that, “Cash flow from operating activities during the quarter fully covered the dividend and capital investments, and we strengthened the balance sheet by reducing debt.”
Woods, in expanding on the Guyana operations, reported too that with the recent discovery in the Urau-2 well, the resource base is expected to grow. According to Woods, “I would think with Guyana, with respect to the potential of that resource base…We’ve talked about nine billion oil equivalent barrels. I would tell you that’s the current estimate and I would expect it to grow.”
He explained that the recent announcement made regarding Uaru-2 confirmed a deeper play which is suggestive of an additional opportunity and resources that haven’t been fully quantified as yet.
“So I think it’s a very rich set of opportunities that we’re going to continue to progress,” Woods told investors. According to the ExxonMobil Chairman, “I think we have laid out a plan that is pretty consistent with that…working very closely with the government and the people of Guyana to continue to progress that resource and really bring a lot of economic opportunity to the country and the people of Guyana. And I think we’re beginning to see the benefit of that manifest itself and we’ll continue to contribute on a ratable basis there.”
Speaking to the company’s long term plans for the Guyana operations, he posited, “we’re talking a potential for seven to ten (Floating Production Storage and Offloading) FPSOs.”
He said six are projected to come online by 2027, “so we feel really good about what we’re finding in Guyana and a very constructive engagement with the Government in terms of those developments.”
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