"ExxonMobil's second quarter earnings excluding special items were a record $11,970 million, up 17% from the second quarter of 2007," said Chairman Rex W. Tillerson. "Earnings per share excluding special items were up 24% reflecting the impact of the continuing share purchase program. Net income for the second quarter was $11,680 million, up 14% from the second quarter of 2007.
"Net income included an after tax special charge of $290 million reflecting the $508 million maximum punitive damages set by the recent Supreme Court ruling in the Valdez litigation. Record crude oil and natural gas realizations were partly offset by lower refining and chemical margins, lower production volumes and higher operating costs. First half earnings excluding special items increased by 17% over the first half of 2007 reflecting higher crude oil and natural gas realizations. Net income for the first half of 2008 was up 16% versus 2007.
"ExxonMobil increased investments across all business lines to help meet global demand for crude oil, natural gas and finished products. Capital and exploration project spending increased to $7.0 billion in the second quarter, up 38% from last year. For the first half of 2008, spending on capital and exploration projects was $12.5 billion.
"The Corporation distributed a total of $10.1 billion to shareholders in the second quarter through dividends of $2.1 billion and share purchases to reduce shares outstanding of $8.0 billion, an increase of 12% or $1.1 billion versus the second quarter of 2007.”
SECOND QUARTER HIGHLIGHTS
Second Quarter 2008 vs. Second Quarter 2007
Upstream earnings were $10,012 million, up $4,059 million from the second quarter of 2007. Record crude oil and natural gas realizations increased earnings approximately $6.1 billion. Lower sales volumes decreased earnings about $1.7 billion. Higher operating costs and increased taxes also reduced earnings.
On an oil-equivalent basis, production decreased 8% from the second quarter of 2007. Excluding impacts related to the Venezuela expropriation, the Nigeria labor strike and lower entitlement volumes (which include price and spend impacts and PSC net interest reductions), production was down about 3%.
Liquids production totaled 2,393 kbd (thousands of barrels per day), down 275 kbd from the second quarter of 2007. Excluding the Venezuela expropriation, the Nigeria labor strike and lower entitlement volumes, liquids production was down just over 2%, as increased production from projects in west Africa and the North Sea was more than offset by mature field decline and higher maintenance activity.
Second quarter natural gas production was 8,448 mcfd (millions of cubic feet per day), down 285 mcfd from 2007. Higher European demand and new production volumes from project additions in the North Sea were more than offset by mature field decline and increased maintenance activity.
Earnings from U.S. Upstream operations were $2,034 million, $812 million higher than the second quarter of 2007. Non-U.S. Upstream earnings were $7,978 million, up $3,247 million from last year.
Corporate and financing expenses of $287 million, excluding the charge related to the Valdez litigation, increased by $188 million, mainly due to tax items and lower interest income.
During the second quarter of 2008, Exxon Mobil Corporation purchased 98 million shares of its common stock for the treasury at a gross cost of $8.8 billion. These purchases included $8.0 billion to reduce the number of shares outstanding, with the balance used to offset shares issued in conjunction with the company's benefit plans and programs. Shares outstanding were reduced from 5,284 million at the end of the first quarter to 5,194 million at the end of the second quarter. Purchases may be made in both the open market and through negotiated transactions, and may be increased, decreased or discontinued at any time without prior notice.
First Half 2008 vs. First Half 2007
Net income of $22,570 million ($4.25 per share) was a record and increased $3,030 million from 2007. Excluding special items, earnings for the first half of 2008 were $22,860 million, an increase of $3,320 million from 2007.
FIRST HALF HIGHLIGHTS
Upstream earnings were a record $18,797 million, up $6,803 million from 2007. Record high crude oil and natural gas realizations increased earnings approximately $10.5 billion. Lower sales volumes reduced earnings about $2.5 billion. Higher taxes, increased operating costs and lower gains on asset sales decreased earnings approximately $1.2 billion.
On an oil-equivalent basis, production decreased 7% from last year. Excluding impacts related to the Venezuela expropriation, the Nigeria labor strike and lower entitlement volumes, production was down 2%.
Liquids production of 2,431 kbd decreased 276 kbd from 2007. Excluding the Venezuela expropriation, the Nigeria labor strike and lower entitlement volumes, liquids production was down 3% as field decline in mature areas more than offset project volume increases.
Natural gas production of 9,333 mcfd decreased 86 mcfd from 2007. Higher volumes from North Sea and Qatar projects and higher European demand were more than offset by mature field decline.
Earnings from U.S. Upstream operations for 2008 were $3,665 million, an increase of $1,266 million. Earnings outside the U.S. were $15,132 million, $5,537 million higher than 2007.
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