Exxon Faces Up to $800MM Hit from Texas Freeze
(Bloomberg) -- Exxon Mobil Corp. expects first-quarter earnings to be reduced by as much as $800 million due to the deep freeze that plunged Texas into darkness last month.
Even so, the oil giant probably returned to profit after four straight losses. Rebounding oil and natural gas prices increased earnings by as much as $2.7 billion while improved refining and chemical margins added up to $1.1 billion, the Irving, Texas-based company said Wednesday in a filing.
The Arctic blast in Texas wreaked havoc on gas and power markets, minting winners and losers among energy suppliers. Electricity retailers including Just Energy Group Inc. and Griddy Energy LLC declared bankruptcy, while oil producer California Resources Corp. said its gas trading business generated a profit as a result of the storm.
Exxon was forced to shut or reduce runs at its large refining and petrochemical plants along the Gulf Coast but the filing on Wednesday showed that its oil and gas production facilities also suffered substantial reductions in earnings.
The company suffered its first annual loss in four decades last year and Chief Executive Officer Darren Woods is aiming to repair relations with investors by holding capital spending and production near 20-year lows to maximize cash flow and protect its $15 billion-a-year dividend.
Exxon is due to report first-quarter earnings in four to five weeks and will face a shareholder vote on an activist investor’s proposal to reconstitute its board and change strategy toward the end of May. The company this year appointed three new directors to better equip the board through the energy transition.
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