Exxon Slashes Spending, Writes Down Assets
November 30 2020 - 5:38PM
Dow Jones News
By Christopher M. Matthews
Exxon Mobil Corp. is retreating from a plan to increase spending
to boost its oil and gas production by 2025 and preparing to slash
the book value of its assets by up to $20 billion, as the
struggling company reassesses its next decade.
The Texas oil giant, which has lost more than $2.3 billion over
the first three quarters of this year after the coronavirus wreaked
havoc on fossil fuel demand, released a reduced spending outlook
Monday for the next five years. It now plans to spend $19 billion
or less next year and $20 billion to $25 billion a year between
2022 and 2025. It had previously planned to spend more than $30
billion a year in capital expenditures through 2025.
Exxon also said it would stop investing in certain natural-gas
assets and telegraphed a massive write-down.
The cuts are a course correction for Chief Executive Darren
Woods, who laid out a plan in 2018 to spend $230 billion to double
profits and pump an additional one million barrels of oil and gas a
day by the middle of the next decade. That plan proved ill-timed,
especially after the pandemic caused oil prices to plummet this
spring.
Exxon cut its expectations for future oil prices for each of the
next seven years by 11% to 17% as part of a financial-planning
process conducted this fall, The Wall Street Journal reported last
week, citing internal documents. The sizable reduction suggests
Exxon expects the economic fallout from the pandemic to linger for
much of the next decade.
Write to Christopher M. Matthews at
christopher.matthews@wsj.com
(END) Dow Jones Newswires
November 30, 2020 17:23 ET (22:23 GMT)
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