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.
"Continuing challenges in the state regulatory
environment have impeded progress in restoring operations" at the
company's Santa Ynez facilities near Santa Barbara, it said. It had previously
disclosed the properties would be sold for about $643 million in a highly
leveraged deal to a startup company.
The writedown marks another exit by large oil companies from
California over the relatively mature oilfields and the state's environmental
and regulatory policies.
Chevron in December blasted the state's energy policies as
having "made it a difficult place to invest" and leading it
"reduce spending by hundreds of millions of dollars since 2022."
Earlier this month, the second largest U.S. oil producer also said it would
write down up to $4 billion in assets, primarily in California.
Exxon also indicated it will take an impairment of about
$250 million in its chemicals business.
Despite the charges, RBC analyst Biraj Borkhataria expects
investors will view the update as neutral. The snapshot puts the quarter's net
profit at about $9 billion, or $2.20 per share, he said.
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.
Full results are expected on Feb. 2.
Brent prices in the fourth quarter averaged $82.85, down 7%
from the year-ago period and a 4% decline from the third quarter. -Reuters