Exxon Mobil says its profit is flat

US gas prices have risen for over 30 days consecutively to a four-month high. The national average is $3.74 per gallon.
Mandel Ngan/AFP/Getty Images
US gas prices have risen for over 30 days consecutively to a four-month high. The national average is $3.74 per gallon.

HOUSTON — Exxon Mobil Corp. reported a virtually flat profit for the first quarter Thursday, with strong earnings on its chemical business partly compensating for declines in exploration, production, refining, and marketing.

Exxon, the world’s largest publicly traded oil company, reported net income of $9.5 billion, a $50 million increase from the first quarter in 2012, which analysts attributed to a gradual shift from drilling for natural gas to drilling for more profitable oil. Overall gas and oil production volumes fell 3.5 percent, although that trend is expected to reverse by the end of the year because of the imminent startup of the Kearl oil sands project in western Canada.

The company’s total production has barely budged since 2002, despite some major acquisitions, as a result of declines in older fields and the difficulty of exploring for new fields in a world where most oil is now controlled by national oil companies. Exxon Mobil has tried to pivot from oil to natural gas in recent years, but a supply glut and lower prices in the United States have cut into profits.


Exxon Mobil has been struggling to keep its dominant position by investing heavily in large oil sands and liquefied natural gas projects, which are expensive but not prone to the declining production of more traditional oil fields. Large oil and gas projects are scheduled to come on line over the next five years in Kazakhstan, Angola, and Nigeria.

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With an eye to the future, the company put a positive light on the earnings.

“Exxon Mobil achieved strong results while investing significantly to develop new energy supplies,’’ Rex W. Tillerson, the chairman and chief executive, said in a statement.

Allen Good, a Morningstar oil company analyst, characterized the results as ‘‘rather uneventful.’’ Good said inadequate cash flow was forcing the company to borrow to maintain shareholder returns. ‘‘As result,’’ he said, ‘‘it is reducing share repurchases to $4 billion per quarter from $5 billion and could reduce further in coming quarters’’ while its dividend yield lags behind competitors such as Chevron.

Last year Exxon Mobil tried to increase its reserves and production by purchasing 196,000 acres in North Dakota and Montana from Denbury Resources for $1.6 billion to add to the Bakken shale oil field. ‘‘You’re starting to see the dividends,’’ said David Lawrence, vice president for investor relations.


Exxon Mobile shares closed down 1.5 at $88.07.