ExxonMobil Posts Record Profit of $36.1 Billion

ExxonMobil Corp. (www.exxonmobil.com) reported net income for the fourth quarter 2005 of $10.71 billion, up 27 percent from the fourth quarter 2004, topping a record quarterly profit the company set in the third quarter of 2005 and establishing the high mark for largest annual reported net income in U.S. history at $36.1 billion, according to Howard Silverblatt, a stock market analyst for Standard & Poor’s. Silverblatt, speaking to the Associated Press (www.ap.org), said the previous annual high was ExxonMobil’s $25.3 billion profit in 2004.

Meanwhile, ConocoPhillips (www.conocophillips.com) reported last week an earnings increase of 51 percent to $3.68 billion, with annual income climbing 66 percent to $13.53 billion. Chevron Corp. (www.chevron.com) said its fourth-quarter earnings rose 20 percent to $4.14 billion in the fourth quarter, while annual income jumped 6 percent to $14.1 billion.

According to a report by TheStreet.com (www.thestreet.com), disruptions in world oil supplies, growing demand in Asia, and lower production levels in the Gulf of Mexico have roiled the energy markets, pushing up crude prices 60 percent in 2005 and 11 percent so far this year. Oil was trading at $68.10 a barrel, up 34 cents on Monday.

In a press release, ExxonMobil addressed concern over high oil and gas prices in the face of such high profit numbers. "There is a great deal of public interest in global energy prices," noted ExxonMobil Chairman, Rex W. Tillerson, in the prepared statement. "We recognize that consumers worldwide want and need reliable supplies of affordable energy — to fuel their vehicles, light and heat their homes, and run their businesses. Our strong financial results will continue to allow us to make significant, long-term investments required to do our part in meeting the world energy needs."

ExxonMobil reported fourth-quarter spending of $5.3 billion on capital and exploration projects, bringing its 2005 spending number in this category to $17.7 billion, an increase of 19 percent or $2.8 billion versus 2004. The company started production at its multi-phase Sakhalin 1 project in Russia during the fourth quarter. This project is expected to produce 250 thousand barrels per day (gross) of liquids and 130 million cubic feet per day (gross) of gas by the end of 2006.

Still, ExxonMobil reported that oil-equivalent production decreased by 1 percent in the fourth quarter from the same period in the previous year due to the residual impact of hurricanes Katrina and Rita. Excluding such impacts, as well as divestment and entitlement effects, production increased 2 percent, according to ExxonMobil. TheStreet.com said ExxonMobil’s exploration and production earnings rose 44 percent to $7.04 billion, despite the 1 percent drop in production.

According to ExxonMobil”s press release, its fourth-quarter profits are the product of "higher crude oil and natural gas realizations and improved refining and marketing margins."