Exxon, one of the largest U.S oil companies, has announced an estimated loss of $680 million in the third quarter of this year; capital and exploration expenditures also decreased by $6 billion compared to last year’s same period.
The company report also highlights a slight recovery, with financial results improved by $400 million compared to the second quarter of the year, attributable to a slight increase in demand or a more balanced oil market.
Oil-equivalent production also improved slightly, with 3.7 million barrels a day, a 1% upgrade compared to the second quarter of the year. Although it is a slight recovery, the company said production still reflects the impact Covid-19 had on the demand.
“We remain confident in our long-term strategy and the fundamentals of our business, and are taking the necessary actions to preserve value while protecting the balance sheet and dividend,” said Darren W. Woods, chairman, and chief executive officer.
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Exxon, no longer the biggest
Also added, they are committed to achieving 2020’s cost-reduction targets, and they have committed to gain additional savings next year. In fact, the company plans to reduce capital spending by $23 billion this year.
Nevertheless, the cuts would continue all the way through 2021, as the company announced plans to cut their personnel by almost 15%, more than 14,000 by the end of 2020 or early 2021.
About dividends, the company kept 87 cents a share, making 2020 the first year since 1982 that it has not raised shareholder payout.
As Reuters reports, the company is also evaluating on whether to hold on to other NorthAmerican assets; possibly, the company could write down natural gas assets valued between $25 and $30 million.
For experts, such as Anish Kapadia, director of energy at Palissy Advisors, “It is significant that Exxon is explicitly guiding to maintaining the dividend having reduced capex and potentially adding more divestments.”
With all this, Exxon is no longer the most prominent U.S. energy company by market capitalization. It has been surpassed by wind and solar provider NextEra.
