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Exxon Mobil 3Q income jumps 55 percent

Exxon Mobil 3Q income jumps 55 percent
Associated Press
Thursday, October 28, 2010 - 9:48am

NEW YORK – Exxon Mobil Corp. said Thursday that income jumped 55 percent in the third quarter on higher oil prices and increased production.

The world's largest publicly traded oil company reported earnings of $7.35 billion, or $1.44 per share, for the third quarter. That compares with $4.73 billion, or 98 cents per share, in the year-ago period. Revenue increased 15.8 percent to $95.3 billion.

Petroleum companies have seen profits jump as oil prices rebounded from 2009. Average oil prices increased 12 percent year-over-year, and prices are expected to continue to rise. The International Energy Agency forecasts that world oil consumption will grow next year to 88.2 million barrels a day.

Earlier Thursday. Royal Dutch Shell PLC said quarterly profits climbed by 6.5 percent to $3.46 billion with higher oil prices offsetting charges in its refining business. ConocoPhillips reported Wednesday that its income more than doubled for the third straight quarter, earning $3.06 billion for the July-September period. Its results were propped up by asset sales as well as higher prices for crude.

The ability to sell crude barrels for more money has helped offset unexpected drilling expenses and a drop in Gulf of Mexico production that some companies are starting to see following BP's giant oil spill earlier this year.

The U.S. shut down deepwater exploration for several months after the April explosion on the Deepwater Horizon rig, and regulators set tough new rules that nearly halted drilling activity in the Gulf. In July, Exxon took the lead in organizing a $1 billion containment network that will eventually be used to respond to future spills in the Gulf.

Exxon, based in Irving, Texas, posted higher profits for most of its businesses; including oil production and exploration, refining and U.S. chemicals. It also cranked up oil production year-over-year, and its refineries made more fuel. The company continued to plow billions of dollars into expanding its production and exploration business, increasing spending 55 percent to $7.6 billion in the third quarter.

The acquisition of XTO Energy helped Exxon increase natural-gas production by 50 percent year-over-year.

Higher natural gas prices helped profits in the third quarter, but they've been sliding recently, and oil executives have expressed concern about continued declines. U.S. supplies already have a hefty surplus, and consumption isn't expected to increase much next year, according to the Energy Information Administration.

The EIA said Thursday that natural gas reserves continued to grow and are 9.1 percent above the five-year average.

Exxon's profit was less than the $7.56 billion it earned in the second quarter as it paid higher corporate and financing costs and its chemicals business posted lower profits. Two years ago, Exxon set the all-time record for profits by a U.S. corporation with $14.8 billion in the third quarter of 2008.

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