ExxonMobil completed a review of its forward business plans and said it will prioritize near-term capital spending on assets with the highest potential future value and work toward additional expense management.
Near-term capital spending will be allocated to developments in Guyana and the US Permian basin, targeted exploration in Brazil, and chemicals performance products. The company expects $16-19 billion in capital and exploration expenditures in 2021. Thereafter, annually through 2025, spending plans were reduced to $20-25 billion from $30-35 billion.
Certain dry gas assets have been removed from the development plan and an after-tax impairment of $17-20 billion is expected in this year’s fourth quarter, the company said in a news release according to Oil and Gas Journal.
The company said it expects to exceed planned 2020 cost savings of $10 billion and work toward additional expense management, including business line reorganizations and a global workforce reduction of 15percent by yearend 2021.
The reduction reiterates plans already noted by the company, including a cut to US jobs primarily impacting management offices in Houston.
Assets removed from the company’s development plan include certain dry gas resources in the Appalachian and Rocky Mountains, Oklahoma, Texas, Louisiana, and Arkansas in the US, and in western Canada and Argentina. The decision will result in a non-cash, after-tax fourth quarter impairment charge of $17-20 billion, less than the $25-30 billion the company noted around its third quarter earnings.
The company announced an estimated third-quarter 2020 loss of $680 million, compared to net earnings of $3.17 billion for the prior year’s third quarter.