Houston — Exxon Mobil Corp warned it would write down about $2.5 billion of California assets in the fourth quarter, and said lower energy prices reduced operating profits.
The snapshot by the largest U.S. oil producer showed operating results could drop to about $8.9 billion, down 30% from the $12.7 billion net profit a year earlier, and 3% weaker than in the third quarter.
Exxon estimated taking a $2.4 billion to $2.6 billion impairment to oil and gas properties along the Southern California coast. Sable Offshore, a company created in 2020, agreed more than a year ago to pay $643 million for the assets.
The writedown marks another exit by large oil companies from California over the relatively mature oilfields and the state’s environmental and regulatory policies.
Exxon also indicated it will take an impairment of about $250 million in its chemicals business.
Lower oil prices and a contraction in fuel margins will slash Exxon’s operating profits by about $2.2 billion compared to the third quarter, the filing showed. Higher natural gas prices should add about $600 million to operating profits.
Brent prices in the fourth quarter averaged $82.85, down 7% from the year-ago period and a 4% decline from the third quarter.
Reporting by Sabrina Valle in Houston, additional reporting by Tanay Dhumal in Bengaluru; Editing by Sriraj Kalluvila and Richard Chang – Reuters
