Houston: ExxonMobil Corp boosted its 2017 capital budget yesterday by about 14 percent on a bet that crude prices have stabilized, but posted its lowest quarterly profit since 1999 as it took a $2 bn charge from the purchase of natural gas producer XTO Energy.
The world's largest publicly traded oil producer wrote down
more than $2bn from its 2009 buyout of natural gas producer XTO Energy, a deal worth roughly $30bn at the time. The writedown is a tacit acknowledgement from Exxon that natural gas prices are not likely to rise substantially in the near future.
The boost in capital expenditures and the writedown reflect a delicate balancing act by oil and natural gas companies in an era of extreme volatility after a two-year price rout.
Wall Street traders expect oil prices to stay near their current range, between $54 and $55 per barrel, for several years and for natural gas prices to remain near their current level, about $3.13 per million cubic feet.
Exxon said it will increase spending to about $22bn this year from $19.3bn in 2016. The move came after peers Chevron Corp, Hess Corp and other oil producers boosted their capital budgets for the year.
The higher spending is not due to rising prices for oilfield contract work or other services, Jeff Woodbury, Exxon's vice
