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Exxon profits down in first quarter on continued production drop

Alaska Dispatch

According to The Associated Press (via Bloomberg's Businessweek), Texas-based oil giant Exxon Mobil Corp. reports its overall net income fell 11 percent in the first quarter of this year. The drop was the first decline in the company's quarterly earnings since 2009.

The reasons for the decline are relatively simple. Exxon produced 7.7 percent less oil and 3.4 percent less natural gas over the quarter, and profits dropped at its chemical plants and U.S. refineries.

Other energy companies are facing similar production woes. Royal Dutch Shell's output was nearly unchanged, and production declined from ConocoPhillips. All three companies had a hard time generating revenue from natural gas as U.S. prices have settled at historic lows in a saturated market.

The Houston Chronicle's Fuel Fix blog reports that Exxon's production decline in the last three months of 2011 was the steepest since 1999, when Exxon acquired Mobil Corp., and that CEO Rex Tillerson is actively seeking projects to reverse the trend.

On Thursday, Exxon announced some good news for investors, though. It increased its annual stock dividend by 21 percent, to $2.28 per share, making it the top corporate dividend payer.

Read more about the revenue decline from The AP, here, and Fuel Fix, here.