NEW YORK, March 5 Exxon Mobil Corp, the
world's largest publicly traded energy company, said on
Wednesday it expects oil and natural gas production to be flat
this year as overall spending falls 6 percent to about $39.8
Investors who had expected production growth sent shares
down 3 percent in earlier trading. The company's current outlook
for output, provided at an annual meeting with investors, was
adjusted from a year-earlier to exclude some volume from Iraq
and Abu Dhabi, the company said.
"We took a set of low margin barrels off the base," Exxon
Chief Executive Officer Rex Tillerson told investors.
Evan Calio, an analyst with Morgan Stanley, noted at the
meeting that oil and gas production growth has been "elusive"
In recent years, Exxon and other large oil companies have
invested record amounts on exploration and production projects
to boost oil and gas output. Last year, Exxon spent $42.5
billion, an amount the Irving, Texas company describes as a
Tensions between Russia and Ukraine have not yet disrupted
Exxon's activity in Russia, where it is prospecting for oil and
gas in Arctic waters, Tillerson told investors.
"We don't see any new challenges out of the current
situations," said Tillerson, noting this would change if there
was government action such as sanctions.
Still, the company has put on hold its pursuit of the
Ukraine Skifska block in the Black Sea, it said.
For 2014, oil and gas production is expected to be 4 million
barrels oil equivalent per day (boed), little changed from last
Growth is expected to pick up from 2015 to 2017, when
production is expected to grow 2 percent to 3 percent as major
projects add an additional 1 million boed.
"Production has been down for a few years. It explains why
this stock is a weak performer. They are spending a lot of
money, but they are spending to tread water," said Phil Weiss,
chief investment analyst at Baltimore-Washington Financial
This year, Exxon said it expects to bring 10 major projects
into production, most of them targeting more profitable crude
oil or other liquids.
"This is going to be a big year," Mark Albers, Exxon senior
vice president told investors.
Shares of Exxon were down 2.75 percent at $93.88 in
afternoon trading on the New York Stock Exchange.