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Energy
- Oil & Gas
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Of Note:

The world's largest publicly traded oil company, reported income yesterday that shattered its own record for the biggest
profit from operations by a U.S. corporation, earning $14.83-billion (U.S.) in the third quarter.

Exxon Mobil reaped massive earnings from its exploration and production arm, where profit rose 48 per cent to $9.35-billion.

Some companies, especially smaller producers, are scaling back spending on new exploration and production projects because of the uncertainty,though analysts say that its less likely to happen at the well-heeled giants like Exxon.

"Despite recent volatility in the financial, commodity and credit markets, the fundamentals of Exxon Mobil's business remain strong."

Exxon Mobil owns the record for the top 10 most-profitable quarters for a U.S. company, as well as the largest annual profit.


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Exxon profit hits record

Associated Press

October 31, 2008

Exxon Mobil Corp., the world's largest publicly traded oil company, reported income yesterday that shattered its own record for the biggest profit from operations by a U.S. corporation, earning $14.83-billion (U.S.) in the third quarter. Yet numbers contained within the company's most recent financial report revealed production numbers that continue to sag.

The Irving, Tex.-based company has reported unprecedented back-to-back quarters, the end of the most recent coinciding with a rapid plunge in crude prices. Benchmark oil prices fell $1.54 to close at $65.96 yesterday on the New York Mercantile Exchange, down more than 50 per cent from record highs in July.

Exxon said profit jumped nearly 58 per cent to $2.86 a share in the July-September period. That compares with $9.41-billion, or $1.70 a share, a year ago.

The previous record for U.S. corporate profit was set last quarter, when Exxon Mobil earned $11.68-billion. Revenue rose 35 per cent to $137.7-billion.
On average, analysts expected Exxon to earn $2.39 a share on revenue of $131.4-billion.

Exxon Mobil's results got a boost of $1.62-billion in the most-recent quarter from the sale of a natural gas transportation business in Germany. It also took a special, after-tax charge of $170-million for a punitive damages award related to the 1989 Exxon Valdez oil spill.

Excluding those items, third-quarter earnings amounted to $13.38-billion - nearly 15 per cent above its profit record from the second quarter.

As expected, Exxon Mobil reaped massive earnings from its exploration and production arm, where profit rose 48 per cent to $9.35-billion. Higher oil and natural gas prices propelled results, even though production was down from the third quarter a year ago.

Oil producers are coming off a quarter during which crude prices reached an all-time high of $147.27 - and their profits have reflected it.

Royal Dutch Shell PLC, Europe's largest oil company, said yesterday its third-quarter net profit jumped 22 per cent from a year ago, also despite falling production.

Crude prices have tumbled from summer highs, and the global economic malaise has raised questions about energy demand at least into 2009.

Some companies, especially smaller producers, are scaling back spending on new exploration and production projects because of the uncertainty, though analysts say that its less likely to happen at the well-heeled giants like Exxon.

"Our integrated business portfolio, strong operational performance and financial discipline continued to allow us to capture the benefits of the commodity price environment," Exxon Mobil investor relations chief David Rosenthal said on a conference call.

"Despite recent volatility in the financial, commodity and credit markets, the fundamentals of Exxon Mobil's business remain strong."

A not-so-bright note was Exxon's output, which once again was below year-ago levels. The company, which produces 3 per cent of the world's oil, said production on an oil-equivalent basis was down 8 per cent from a year ago - a concern given it generates more than two-thirds of its earnings from oil and gas production.

Exxon cited disruptions caused by hurricanes Gustav and Ike, production-sharing contracts and increased maintenance activity. It said damage repairs and lower volumes from the storms is expected to reduce fourth-quarter earnings by about $500-million.

Setting U.S. profit records has become commonplace for the oil giant. In fact, if one-time gains and spinoffs are stripped away from other companies, Exxon Mobil owns the record for the top 10 most-profitable quarters for a U.S. company, as well as the largest annual profit.

EXXON MOBIL (XOM)

Close:$75.05 (U.S.), up 40¢

http://www.theglobeandmail.com/servlet/story/LAC.20081031.RTICKERMAINEXXON31/TPStory/Business


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