Exxon tries to put the worst behind it with US$20b impairment charge

[BENGALURU] Top US oil producer Exxon Mobil Corp on Monday said it would write down the value of US$17 billion to US$20 billion in natural gas properties, its biggest ever impairment, and slash spending next year to its lowest level in 15 years.

The oil major is reeling from the Covid-19 pandemic's impact on energy demand and prices, and is trying to protect a rich shareholder payout that is yielding 8.6 per cent and costs nearly US$15 billion a year.

Coming impairments include much of the value of Exxon's 2010 purchase of shale producer XTO Energy, a stock deal worth roughly US$30 billion at the time.

The XTO purchase thrust Exxon into the forefront of the US shale boom, but was largely a bet on natural gas just before prices went on a decade-long slide.

Exxon will focus instead on Guyana, where it discovered up to 8 billion barrels of oil, offshore Brazil, and the Permian Basin oil field, the company said.

REUTERS

GET BT IN YOUR INBOX DAILY

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign UpVIEW ALL