ExxonMobil to spud Liza as earnings fall 50%

Febuary 2, 2016

ExxonMobil is moving quickly to spud a well at its Liza discovery, offshore Guyana, in addition to several major projects that are set for start-up in the next two years.

Image from Exxon.

Exxon is working on contracting a drillship to get it onsite to appraise the Liza discovery, and expects the well to spud very shortly, the company said on a financial conference call today (2 February).

In addition, Exxon said that Liza’s seismic acquisition is nearing completion. The results from both the well and seismic are being actively assessed to test the full block potential, as well as the commercial viability of the discovery. There are also early studies underway for potential development options for the Liza field.

Liza, located about 120mi offshore Guyana, sits in the 6.6 million acre Stabroek Block. Exxon encountered more than 295ft of high quality oil-bearing sandstone reservoirs at theLiza-1 well last year

According to vice president of investor relations Jeff Woodbury, ExxonMobil will have 10 major projects that will start-up in 2016 and 2017.

In 2016, the company anticipates the start-up of the Gorgon Jansz project off Australia; Kazakhstan’s Kashagan in late 2016; Julia and Heidelberg in the Gulf of Mexico; Point Thomson off Alaska; and the Barzan gas project, off Qatar.

Exxon also revealed that its upstream sector took an axe to the company’s earnings for both Q4 2015 and full year, due to low commodity prices.

ExxonMobil posted a 58% decline in Q4 of US$2.8 billion, compared to $6.6 billion in Q4 2014, which the company said that lower commodity prices in upstream were offset by higher downstream earnings.

For full year earnings, Exxon saw 50% drop to $16.2 billion, compared to 2014’s $32.5 billion. Higher downstream and chemical earnings were offset by sharply lower commodity prices in the upstream, the company said.

“While our financial results reflect the challenging environment, we remain focused on the business fundamentals, including project execution and effective cost management,” Rex W. Tillerson, chairman and CEO said.

The company also posted a 29% decrease in its capital and exploration expenditures to $7.4 billion, compared to Q4 2014.

Upstream earnings were down $4.6 billion for the quarter, to $857 million for the period. For full year 2015, upstream earnings were $7.1 billion, down $20.4 billion from 2014.

ExxonMobil completed six major upstream projects during the year and achieved its full-year plan to produce 4.1 MMboe/d. These new developments in Canada, Indonesia, Norway, the United States and West Africa added 300,000 boe/d of working interest production capacity, the company said.

Source: http://www.oedigital.com/component/k2/item/11519-exxonmobil-to-spud-liza-as-earnings-fall-50